LONDON | By Barclays analysts | The Japan macro trade has been off the radar in 2014, but that should change (for better or worse) in the coming few months. US yields have likely bottomed, while the effect of Japan’s VAT increase appearsmanageable. More important, PM Abe has unveiled more details of his 3rd Arrow (the structuralreform program), including a long-anticipated cut in the corporate tax rate.
MADRID | By Bankinter analysts | According to Rightmove, housing prices in the UK rose by +0.1% m/m in June versus previous +3.6%. Thus, the year-on-year rate slows down to 7.7% from 8.9%. In such context, Bank of England’s minutes will be particularly relevant this week, especially after Mr Carney said that the rise in interest rates will come sooner than markets expect.
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 | By The Corner | Spain’s public debt grew 7.12 percent in 1Q14 to 989.9 billion euros, which is 96.8 percent of its GDP. The government’s debt went up 8.4 percent from the first three months of 2013 to 864 billion euros, accounting for by far the largest share of the total, according to Bank of Spain figures published Friday. Morgan Stanley analysts emphasize the changes of macroeconomic prospects and the increase of forecasts in peripheral countries. From its analytics department, growth levels for Spain, Portugal and Ireland were raised on Monday.
SAO PAULO | By Mark Sadowski via Marcus Nunes’ Historinhas | Simon Wren-Lewis has written a response to a post by Giles Wilkes in which he addresses the nature of the disagreement between monetarists such as Scott Sumner, David Beckworth and Marcus Nunes, and fiscalists such as Paul Krugman, Simon Wren-Lewis and Jonathan Portes. I want to start in the middle because this is the part I have the biggest disagreement with the following statement.
BEIJING | By Yang Kaisheng via Caixin | A monopoly on either the buyer’s or seller’s side often means one or several enterprises relying on their strengths keep squeezing out or forcing the merger of small and medium-sized enterprises to gain unfair pricing power. It is often caused by a monopoly over resources or entry barriers that result from government intervention. In light of this, is it reasonable to say that China’s banking industry is monopolized?
LONDON | By Barclays analysts | Q1 data suggest that the refocusing of the FLS scheme toward SMEs’ funding has yet to deliver. Credit remains subdued for SMEs, despite an improvement in overall availability of and demand for credit for private non-financial corporations. Higher consumer confidence, coupled with improvements in the economic outlook, bodes well for household consumption in Q2.
LONDON | By Barclays analysts | The latest disappointing inflation and growth data have reinforced market expectations of ECB action(s) in June. The significant rally of short rates seems consistent with expectations of a policy rates cut, as well as a chance of additional liquidity injections. At this stage, we see limited room for a further rally and suggest paying tactically 1y Eonia.
LONDON | By Barclays analysts | 2014 was supposed to be different. After three years of disappointment, this was meant to be the year when the global economy had a broader, higher and more persistently solid level of growth – at least, this was the consensus narrative. In the end, the seasonally adjusted quarterly rate of global growth in Q1 was among the weakest of the recovery. US growth was near zero (probably negative after revisions) and China’s GDP growth was below already low forecasts.
SAO PAULO | By Marcus Nunes | (Note to generation y: The Rat Pack was the name given to a group of actors led by Frank Sinatra Dean Martin and Sammy Davis Jr) In 2005 Edward Nelson, at the Research Department of the St Louis Fed, wrote a very interesting paper entitled “Monetary Policy Neglect and the Great Inflation in Canada, Australia and new Zealand”.