The recent G 20 Summit saw widespread concern over the backlash against free trade. The crude populism gaining momentum in many developed countries has raised the banner against globalisation, depicted as the main culprit for all woes. Those losing their jobs or facing tougher labour conditions openly blame imports and open market access for their misfortune.
James Alexander via Historinhas | It’s taken a while but the evidence is now in. Euro Area NGDP growth has overtaken US NGDP growth. Congratulations to the ECB, commiserations to the Fed. Go Europe!
BoAML | As the impeachment is no longer an obstacle for President Michel Temer’s government to go ahead with its economic agenda, we believe focus will likely shift back to the timing of the presentation of reforms and the start of the monetary policy easing cycle.
No-one really knows why Mario Draghi said last week that for the time being there are no reasons to increase the ECB’s anti-deflation weaponry beyond March 2017. He said the matter had not even been discussed during the central bank’s Council Meeting on Thursday. The euro has risen and the yield on the German bund as well.
Caixin | Late summer and early autumn is traditionally a hot season for property sales in China. In 30 major cities, August property sales by floor space increased 27 %year-on-year to 22.9 million square meters, according to E-House China R&D Institute.
The imminent agreement between the EU and the US, called the TTIP, is dying on the side of both the US and Europe. The two candidates for the White House have expressed their scepticism, one with more than the other. And in Europe, only Merkel has stood firm, but this is weakening her politically and taking away her social democrat allies.
BoAML| The emerging market rally of the past six months appears to have paused and needs another theme to resume: we think the exchange rates will be the key issue. Since end-January, emerging market assets have rallied on a compression of excessive cred it risk premiums that were created by the oil and China induced panic.
The stagnation in European productivity is serious, a tragedy. Labour productivity is the result of dividing the product obtained (some of components of GDP) by the number of hours worked. It can also be calculated dividing by the number of employees, although the different kinds of contracts (part-time, construction contracts etc.) create distortions. The more GDP expands, the more productivity increases. And the more employment rises, the less productivity increases.
Julius Baer Research | Alongside the G20 summit, China and the United States informed that they both ratified the Paris agreement on climate change. The treaty was negotiated and signed under the lead of the United Nations in Paris last December and will go into effect once countries in sum representing at least 55% of global greenhouse gas emissions ratified the agreement.
J.L. M. Campuzano (Spanish Banking Association) | Low growth, huge inequality and the slow progress with structural reforms: these are the three problems which cause the most concern for IMF Managing Director Christine Lagarde. And the issues which she would like tackled at a global level in a forum like last week’s G20 meeting.
*Foto: Steven Cutts