Week 50

12 December – 16 December

 

12 December

 

China and Europe have lashed out at Donald Trump after he spent the weekend upping the ante over his country’s foreign policy. Beijing warned that there would be “nothing to discuss” with the US if Mr Trump’s administration discards the “One China” policy. The comment came after the president-elect hinted that the four-decade old policy could become a bargaining chip in Sino-US relations. The FT’s Ed Luce reckons there is every indication that relations with China will continue to be rocky.

 

Italy’s beleaguered economy will struggle to achieve growth above 1 per cent over the next two years in the aftermath of renewed political and financial instability, according to a major rating agency.

 

The price of Brent Crude, the international oil benchmark, has risen above $57 for the first time since July 2015 after Opec won the support of countries outside its cartel for its planned supply cuts.

 

Oi, the Brazilian telecom operator at the centre of a R$65bn debt default, the largest in the country’s history, is likely to consider more favourable debt-for-equity swap conditions for creditors in talks this week.

 

13 December

 

Spain has won praise from the International Monetary Fund for its “impressive” economic recovery, in a report that offered strong backing for the political measures taken by prime minister Mariano Rajoy at the height of the recent crisis.

 

Inflation in India dropped to its lowest level in two years in November as the government’s surprise move to withdraw high-value bank notes prompted households to hold back on spending.

 

Philips will sell a controlling stake in its LED business to a consortium led by US private equity group Apollo Global Management in a deal that values the division at $2bn — a 40 per cent discount to a previous sale that was blocked by US regulators.

 

Unicredit shares are up 7.7 per cent at publication time, making it the second-biggest climber in the Europe-wide Stoxx 600 index, behind fellow Italian company Mediaset.

 

14 December

 

The Federal Reserve on Wednesday will hold its final rate-setting meeting before Donald Trump is due to enter the Oval Office. A quarter-point increase in the federal funds rate target range to 0.5-0.75 per cent has already been priced in by the markets, so the focus will be firmly on what happens to policy in 2017 and beyond.

 

Fifteen years ago on Sunday, China became a full-fledged participant in the global economy by acceding to the World Trade Organisation. As if to underline the often fractious experience since, an agreement made by the WTO’s other members when China joined is coming back to bite them.

 

Low interest rates pose one of the biggest threats to the US economy and expose investors to the potential for heavy loses from a price shock across a range of markets, according to an independent arm of the US Treasury.

 

Unilever was a gainer on Tuesday after Jefferies turned positive. Investors “greeted with indifference” Unilever’s strategy update last month, where management set out aggressive margin and cash targets at the expense of slower organic sales growth.

 

15 December

 

The Federal Reserve has raised short-term interest rates for the second time in a decade and forecast a faster pace of tightening in the coming year, as it responds to a US economy that has been gathering momentum and may receive further stimulus from Republican tax cuts.

 

India is a land of extremes. Its fast-growing economy will rank beside those of China and the US as the world’s third largest by 2030. Its global diaspora is famed for its people’s prowess in business, technology and entrepreneurism.

 

Punch Taverns is at the centre of a bid brawl over its assets after receiving two competing takeover approaches — one from brewer Heineken and a rival offer from the pub group’s co-founder — that sent its shares soaring 38 per cent.

The heavily indebted UK pub operator is in advanced talks over a 174p-a-share offer from Heineken, the Dutch brewer, which is working with real estate fund

 

Big bets on the convergence of two leading crude benchmarks this week have left oil traders scrambling to decipher the meaning, breathing life into an otherwise tiny corner of energy derivatives markets.

 

16 December