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World economy 16th April 2022

What Elon Musk’s US$3 Billion Twitter Deal Means For Him – And For Social Media

Hamza Mudassir (The Conversation) | The world’s richest man, Elon Musk, is now Twitter’s largest shareholder after acquiring a 9.2% stake in the social media platform for just under US$3 billion (£2.3 billion). The announcement drove Twitter’s share price up 27%, and it continued to grow in after-hours trading. This investor enthusiasm is not surprising. Social media platforms have been suffering lately thanks to newly developed pressures in their ecosystems….

World economy 15th April 2022

The Inverted Yield Curve, A Warning, Not An Alarm Bell

A&G | Last week we saw the US 2 year rate move above the 10 year rate. We refer to this phenomenon as a yield curve inversion and it has historically been a leading indicator of recessions, but a very leading indicator. We should bear in mind that the sample is very small, as we only have data for 10 recessions and all 10 have been preceded by an inverted…

World economy 14th April 2022

Lockdowns Around Shanghai Are Especially Painful For Cars, Electronics And Chip-makers

Alicia García Herrero (Natixis) | When the Chinese economy sneezes, the global supply chain catches a cold. After the successful containment at the initial stage, China has decided to maintain its dynamic zero-covid strategy against a more contagious albeit milder variant of the virus, namely Omicron. The approach has initiated the lockdown in Shanghai. Given its economic size, trading role, and the contagion risk of lockdowns in the surrounding provinces,…

World economy 13th April 2022

What The US Inflation Data Says

Simon Harvey, Head of FX Market Analysis at Monex Europe | On the one hand, core inflation moderated in March with a sequential slowdown from 0.5% m-o-m to 0.3% m-o-m, while on the other hand, headline inflation beat expectations. Headline inflation rose by 1.2% month-on-month, in line with expectations, while the annualised rate exceeded expectations by 0.1 percentage point to 8.5%. The slowdown in the month-on-month core CPI to the…

World economy 7th April 2022

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

World economy 7th April 2022

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…

World economy 26th March 2022

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…

World economy 25th March 2022

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…

World economy 23rd March 2022

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…

World economy 19th March 2022

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…

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