MADRID | By Luis Arroyo | Experts at Afi made an analysis of the US’ labour market to forecast a possible turn in the economic policy. The answer is that such market is yet far from standardization. We can see three different moments according to the standard deviation in the chart above.
By Ray Kwong | After Virgin Galactic hurt the feelings of the Chinese people earlier this year by banning Chinese nationals from its space flights, prospects looked dismal for mainland space freaks. Perhaps that’s why 305 buyers signed up within minutes last Thursday when Taobao (yes, the online bazaar where you can truly buy anything) opened up registration for trips to outer space with the Dutch firm Space Expedition Corp. (SXC).
MADRID | By Luis Martí | You’ll probably know by now that the Court has turned down the Argentinian request to hear an appeal of a lower court decision. The decision established that the unwillingness of Argentina to pay defaulted holdouts, while duly servicing restructured debt, violated the spirit of the pari passu clause. Well, there’s a lot to be said for this interpretation, and a lot against.
WASHINGTON | By Pablo Pardo | Maybe central banks and market participants are giving too much weight to the unemployment rate when trying to gauge future inflation. Instead, they should look at the short-term unemployment rate, because the long-term unemployed risk becoming economic pariahs.
MADRID | By The Corner | The International Monetary Fund (IMF) revised downwards its growth forecasts for the US from 2.8% in April 2014 to 2%, and maintained 2015 outlook in 3%. Furthermore, the institution believes that the country will not achieve full employment before 2017.
LONDON | By Kieran Davies at Barclays | Australia’s largest mining boom on record is in its final stage, with mining investment starting to fall at a faster rate and mining exports start to lift rapidly as supply comes on stream. These trends have seen the current account deficit narrow to 1.4% of GDP, the smallest shortfall since 1980, although we expect the current account to remain in deficit as a massive increase in the supply of commodities over the next few years pushes export prices lower.
MADRID | By Donato Ndongo-Bidyogo | Its oil reserves – 15.6 billion barrels, 2.5 million exported daily – and gas (three million cubic meters) make Nigeria the leading African economy, outperforming South Africa. A notable industrial potential, petrochemicals and cinema industries stand out: Nollywood released more than 7,000 movies in the last decade, just surpassed by India (Bollywood) and ahead of the USA (Hollywood).
MADRID | The Corner | It’s not only about China or the US. Housing prices are well above their historical averages in many countries such as Poland, Turkey or Brazil. And that could mean big trouble for those economies, some of which need to assess their lack of capacity, like the UK. This time the EU’s peripherals are following the opposite trend, with home prices falling 7% in Greece, 6.6% in Italy and 5% in Spain in 2013. The graph shows home prices’ y-o-y evolution in 4Q13.
LONDON | By Kyohei Morita and Yuichiro Nagai at Barclays | The Abe administration is currently aiming to reach a Cabinet decision on its new growth strategy and “big bone” economic and fiscal reform plans around end-June. The discussions are far-reaching, but from the perspective of market participants, we believe there are four near-term focal points: 1) corporate taxes; 2) labor market reforms; 3) reforms to the pension system, including the Government Pension Investment Fund (GPIF); and 4) special national strategy zones. Here we focus on corporate taxes, likely the only subject of concrete discussion for the markets in June.
MADRID | The Corner | Head of Economics at the International Energy Agency remarked that “the investment in renewables in Europe has tripled the US’ investment in the entire shale gas production.” Prices are 20% below the right level to recover the cost of new investments due to the existence of overcapacity and subsidised prices in renewables.