World economy

inflation board

Inflation, Recession… And What Can Actually Be Done

Miguel Navascués | Although there seems to be no awareness of it, the current problem in the world economy is of cosmic proportions, a problem for which we have no close antecedents. We have huge pockets of liquidity, originated to alleviate the contraction of the pandemic, now that inflation is rebounding with great vigour, and a recession that is already being announced in some indicators; what some translate as an…

Solar power in Spain to get investments of €70 bn

Elon Musk Advises Spain And Portugal To Make A Massive Deployment In Solar Energy

Bankinter | Elon Musk, the founder of Tesla, Twitter’s largest shareholder and the world’s richest man posted a tweet yesterday in which he encouraged Spain and Portugal to carry out a “massive deployment” in solar energy. According to Musk, Spain and Portugal could supply energy to all of Europe.Opinion: Elon Musk’s comments had a positive impact on the stock market, leading to strong rises in the main shares of renewable…

Fiat Money

From Egypt To Mexico, From The Czech Republic To Ghana… The Burden Of Tightening Monetary Policy Around The World

Francisco Vidal (Intermoney) | In China, the authorities insist that they will support a scenario of solid economic growth with their actions. However, the week began in the Asian giant with the 1 and 5-year LPR rates remaining at 3.7% and 4.6%, respectively. And while in China we are witnessing new promises of support for activity which do not materialise in immediate action, in many other countries we are witnessing…

Japanese general

BoJ: Sharp Yen Depreciation Adding Pressure To Revise Self-Defeating Policy

Alicia García Herrero (Natixis) | As the Yen rapidly depreciates above USDJPY=120, the unintended consequences of the Bank of Japan (BoJ)’s Yield Curve Control (YCC) has become increasingly apparent. Last month, the BoJ announced it would intervene in the JGB market to protect the 0.25% ceiling on the 10-year JGB yields as they were being pushed up by higher US Treasury yields. Furthermore, after the Fed began to tighten last…

car makers europe

The Playbook For Chinese Carmakers To Mitigate Waning Domestic Demand And Higher Costs

Alicia García Herrero (Natixis) | After three years of sluggish performance, China’s car sales finally reverted to positive growth in 2021. The auto industry is essential for the Chinese economy as it forms 28% of retail sales and 7% of industrial revenue. Without a recovery in car sales, it is hard to imagine a solid rebound in consumption. In this note, we analyze the demand for passenger cars in China…

Jerome Powell

Monetary Tightening Is A Double-Edged Sword

J.P. Marín-Arrese|Skyrocketing prices confront central bankers with a challenging dilemma. Their sacred duty to preserve stability forces them to take vigorous action to curb inflation. Yet, they are conscious that tightening the monetary stance will fail to put on hold the current supply shock. Worse still, only by pulling hard on the hand brake coulld they stop short prices from escalating. A move that would come at a heavy cost…

rusia energia

Is Russia The New Iran As A Result Of Sanctions?

George Brown (Schroders) | Russia is now the most sanctioned country in the world following its illegal invasion of Ukraine, which has brought misery to millions. More than 2,000 additional Western sanctions have been brought in against a broad range of individuals, corporations and institutions. Measures have also been put in place to exclude it from international payments systems, using major reserve currencies or accessing key technologies such as semiconductors….

China Services PMI

What Does China’s 2021 Energy Crunch Mean For Its 2022 Macroeconomic Outlook?

Alicia García Herrero (Natixis) | Even with more than two years after the first outbreak of COVID-19, China, as well as the rest of the world, still faces the impact of the pandemic. While the economy has surged from the bottom since the middle of 2021 after China’s successful containment of the domestic spread of the virus, the recovery’s momentum has slowed down quite rapidly, especially since the second quarter…

china blues 1

Can China Bail Out Putin?

Alicia García Herrero (Natixis) | The unprecedented sanctions imposed on Russia in the wake of its invasion of Ukraine are likely to have devastating consequences. But this will depend on whether Russia manages to bypass the sanctions or, at the very least, mitigate them. One important consideration to answer this question is China’s potential role in offering a helping hand to the Russian economy. China’s economic size and financial clout,…


Acerinox: the lion’s share of profits come from its US business

Morgan Stanley | According to Bloomberg, Acerinox stopped foundry operations at its Cadiz stainless steel plant last night and has launched a licensing plan due to high energy prices. The article flags that the company could consider leaving other parts of the plants idling, such as the hot and cold rolled mills. We believe this move highlights the increasing energy challenges in Europe. That said, we think that Acerinox may…