Christmas came early this year in France as President Emmanuel Macron handed out gifts to his constituents like an end of the year bonus and a €100 increase of the minimum wage, explicitly not paid by employers. However, the European Union may not join in the celebrative Christmas conga as this spending spree will send the French budget deficit far north of what European budget rules allow.
The first figures on the purchase by consumers on Black Friday and the last weekend show significant strength in private consumption. The data published by the firm Customer Growth Customers should be highlighted, which shows that between Thursday and Sunday some 60 billion dollars of products were sold in the US through different sales channels, which represents a 6% increase over the same period last year.
Santander | In terms of stock market behavior, the Spanish market has lost the last decade. The Ibex35 today trades 2% below its level of 2008 and the PSI20 does it 25% below (a behavior even more negative than that of the Italian market, which has fallen by 11% in this period), in a clear contrast with the revaluation of 50% of the EuroStoxx in this period and 237% of the S&P500.
Saudi Energy minister Khalid Al-Falih confirmed over the last weekend that Saudi Arabia will take the lead in OPEC to counter the oil price rout. As signs of a glut are emerging in the US, Al-Falih set the tone for a need by OPEC to cut oil production by 1mn (bpd) from October levels. US President Donald Trump reacted immediately by commenting that OPEC should not make any cut. This made Brent fall back near 1% below the psychological barrier of $70/b and the WTI to below $ 60/b.
Ioannis Glinavos via Macropolis | Italy’s political crisis and incoming government brings the European Central Bank back to making unpleasant choices as it tries to balance market risks with charting a path out of never-ending stimulus and crisis response measures.
In response to the US tariffs on Chinese exports worth USD 50 billion, it threatened to impose levies of 25% on a range of US goods worth about the same amount, including soybeans. The US is one of two world’s largest sellers of soybeans, together with Brazil. China is the world’s dominant buyer, accounting for more than 60% of all imports
After five years out of the stock market, Metrovacesa returned on February 6 via a public share offering earmarked just for qualified investors. The property company’s shares are currently trading at 14.11 euros each, with a big discount to NAV.
Vladimir Putin secured an easy victory, and a second consecutive six-year term, in yesterday’s first round of presidential elections. With 99% of the votes counted, he has received 77% of votes, which will extend his 18-year in power until 2024. Putin’s re-election means stability in the corporate sector, a favourable outcome for bond investors.
“Even though Xi was already due to remain until 2023, the western media became very excited about China’s ‘imperial ambitions’ and may well have been the trigger for the increased talk on tariffs. The reality is however that the US policy of containing China has shifted gear,” says Mark Tinker, Head of AXA IM Framlington Equities Asia. The point of his following comments is to highlight the different attitudes to China currently pertaining in each continent.
Benjamin Cole | The last filmy slips of fabric have been stripped away, and macroeconomists must now view the once-romanced US Congress in flagrante delicto with a real paramour: Mr. Big Bucks Deficits. From here, a premise of Federal Reserve monetary policy must be that it takes place alongside $1 trillion annual deficits.