Week 4 2017

Week 4 2017

23 January – 27 January

 

23 January

 

For two decades, successive US administrations have professed their commitment to a strong dollar. Treasury secretaries tend to say that it reflects a healthy economy and supports investment. What they are generally assumed to mean is that the US will not seek to devalue its currency to help exporters or ease its debt burden.

 

Business from the US has driven a long boom in the Philippines’ flagship outsourcing industry, but potential political threats to ambitious growth plans now loom in both countries.

 

The sharp drop in sterling that has followed the Brexit referendum has imparted a major shock to anyone doing business, or owning assets, across the UK border [1].

 

McDonald’s US sales dropped 1.3 per cent in the fourth quarter, raising concerns about the sustainability of chief executive Steve Easterbrook’s turnround strategy in the home market of the world’s largest fast-food chain.

 

24 January

 

China’s battle against capital flight is threatening the country’s trade flows, with recent restrictions on the use of basic tools for cross-border finance beginning to hamper the businesses driving the country’s $1.7tn in annual imports.

 

News on Friday that the tech juggernaut has filed a $1bn lawsuit against Qualcomm has sent shares in the chipmaker diving by the most in over a year on Monday.

 

AMC Entertainment, the cinema chain owned by China’s richest man, has agreed to buy the largest cinema group in northern Europe in the latest in a spree of overseas investments that have made AMC one of the world’s biggest cinema chains.

 

The London Metal Exchange is searching for a new chief executive after Monday’s abrupt resignation of Garry Jones, who clashed with brokers and battled to stem a decline in activity on the 140-year-old bourse.

 

25 January

 

“Yes, it looks like a mess,” said Turkey’s deputy prime minister Mehmet Simsek last week of his country’s image in the eyes of investors and foreign politicians in an early contender for Understatement Of The Year. The latest interest rate decision from the country’s central bank will do little to turn that around.

 

Xi Jinping, president of China, made a speech last week on globalisation at the World Economic Forum that one would have expected to come from a US president. At his inauguration, Donald Trump made remarks on trade that one would never have expected to come from a US president. The contrast is astounding.

 

SAP has raised its targets for 2020, predicting that “strong momentum” in cloud services would pave the way for more predictable and higher revenue streams.

 

Asian equities are gearing up for a positive pop at the open on Wednesday morning after stock indices in America reached record intraday highs and the dollar enjoyed a mild recovery during US market hours.

 

26 January

 

To say that the Mexican peso has been the punching bag of choice for investors would be an understatement.The currency has shed nearly a fifth of its value since the start of 2016 as disappointing growth, followed by jitters over the direction of US interest rates, gave way to panic over the rise of Donald Trump and the knock-on effect his protectionist “America First” plans would have on Mexico’s export-driven economy.

 

When it comes to the dollar, Donald Trump is his own worst enemy. President Trump sees the strong dollar as a burden for exporters and an obstacle to boosting manufacturing employment. But he fails to appreciate that his own policy proposals, and those of his Congressional allies, are responsible for driving the exchange rate up.

 

Market spirits are buoyant in Asia after the Dow Jones Industrial Average rose above 20,000 points for the first time.

 

The world is facing a long-term oil glut as producers scramble to exploit reserves before fossil fuel demand goes into decline, according to a BP assessment that suggests that oil companies should brace themselves for prolonged pressure from low prices.

 

27 January

 

Mexico’s currency fell sharply after the country’s president cancelled a trip to the US capital after Donald Trump reiterated his view that country should pay for a wall along America’s southern border.

 

A sell-off in eurozone government bonds has left German yields at their highest level in a year, challenging investors who have long become accustomed to low inflation and weak economies keeping market interest rates at record low levels.

 

France’s finance minister Michel Sapin warned that the “window of opportunity” for a deal on the next stages of Greece’s bailout programme was closing, as a ministerial meeting in Brussels failed to make major headway in resolving a split between Athens and the International Monetary Fund.

 

Ant Financial, the digital payments arm of Chinese ecommerce group Alibaba, has underlined its global ambitions with the purchase of the US-listed money transfer service MoneyGram International.