Global growth is speeding with a forecast of 3.6% by 2018, basically due to 4.8% expansion of emerging markets, since developed countries continue languishing with a rise of 1.9% inadequate to solve their social and economic problems.
The Fed signed five major swap arrangements with allied central banks that totaled more than $580 billion in 2008, whereas the People’s Bank of China signed more than 30 bilateral currency swap agreements valued at $490 billion in year 2017.
While stability of global liquidity is key to growth for both emerging and developed markets, the Global Financial Crisis (GFC) changed the role and influence of its key drivers. A paper by Bank of International Settlements’ Stefan Avdjiev, Leonardo Gambacorta, Linda S. Goldberg and Stefano Schiaffi, defines the main components of global liquidity as cross-border bank loans and international bond issuance, distinguishing also between local (pull) and global (push) factors. AXA IM experts have summarised this work.
Pablo Béjar | Having transitioned into a more complex global economy, today emerging and developing countries are less economically vulnerable than in the 1980s and 1990s. But how secure are these economies? How much less vulnerable quantitatively and more resilient are countries to macroeconomic crises that battered them over the last 35 years? More specifically, how has the probability of a currency and GDP crisis evolved during these last years?
Richard N. Cooper via Caixin | In 2013 President Xi Jinping announced the Belt an Road initiative to create a new Silk Road, by land and by sea. The sea route has been well-established since the Suez Canal opened in 1869, but modernizing land routes will be much more difficult, both in engineering terms and especially in economic terms.
The reflation trade that boosted a rally in global stockmarkets after Donald Trump’s victory has been put to the test in recent weeks with the inflation data failing to deliver the sought-after hard facts. However, commodities as an asset class have for some time been somewhat isolated from the reflation debate
Investments in the global energy sector during 2016 totalled 1.7 billion dollars (1.5 billion euros), equivalent to 2.2% of global GDP, but also representing a 12% decline compared with a year earlier. This is the second consecutive annual drop
Nick Ottens via Atlantic Sentinel | Donald Trump isn’t big on technology. “On another occasion, the president said, “I’m just not a believer in email.” By contrast, Trump has spoken at length about American coal and steel and his desire to revive the two industries.
“A long period of deficient demand can discourage workers. It can also hold back investment: a new project may be profitable but if there is no demand it will not get financed,” says Simon Wren-Lewis. The point is that deficient demand was not due to “fiscal austerity”, but to “monetary austerity”.
The positive trend, which started in the last reporting quarter, should also be confirmed in the upcoming reporting season. However, it should be highlighted that the expected figures are below those from the previous quarter although Julius Baer’s analysts expect positive sales and earnings growth.