Week 7 2017

Week 7 2017

13 February – 17 February

 

13 February

 

When Donald Trump attacked China and Japan for currency manipulation, just ten days before this weekend’s summit with prime minister Shinzo Abe, it prompted immediate, vehement and largely accurate denials by East Asia’s economic giants.

 

The head of steel group ArcelorMittal has urged Brussels to look at increasing the cost of goods imported to Europe from countries without a carbon price to help protect EU companies from the bloc’s latest efforts to curb global warming.

 

US stock-index futures ticked higher on Monday, leaving Wall Street’s four main equities gauges set to build on the record closing peaks that were notched up at the end of last week.

 

Kirin has ended its ill-fated venture in Brazil with the ¥77bn ($700m) sale of its struggling business to Heineken, as the Japanese brewer shifts its overseas spending to Southeast Asia.

 

14 February

 

Italian luxury goods group Prada on Monday said sales growth in January showed “positive results”, marking a turn in fortunes after falling revenues for more than a year.

 

A striking feature of global financial markets since the crises of 2007 and 2008 has been the high propensity of many wealthy private investors to sit out all the turmoil, holding cash in bank accounts rather than in riskier assets. Might that be about to change?

 

1.9 per cent is the magic number. Germany’s growth and inflation rate held up at a bumper pace according to confirmed figures which point to growing economic momentum in Europe’s largest economy.

 

Switzerland saw its first year on year increase in consumer prices in more than two years in January, as rising energy prices drove inflation to a whopping 0.3 per cent.

 

15 February

 

The US economy and fiscal policy face an uncertain path under the Donald Trump administration, Janet Yellen warned on Tuesday as she declared “monetary policy is not on a preset course” but that it would be “unwise” to raise rates too slowly.

 

Donald Trump’s recent conciliatory call with Xi Jinping on the “One China” issue came as tensions between the two were escalating. Contrasting political systems and cultural norms have always made it difficult for the two nations to work together. Ironically, with President Trump’s election and President Xi’s consolidation of authority, the potential for conflict is now greater not because of these differences but because of commonalities in their aspirations.

 

The UK financial watchdog is exploring ideas for an “international segment” to accommodate overseas companies in British capital markets, in which large groups could obtain a London listing without obligation to comply with stringent requirements for a premium listed company.

 

A key part of the UK’s energy strategy has been thrown into doubt after Toshiba said its financial troubles were likely to force it to abandon its leading role in a Cumbria nuclear power station intended to meet 8 per cent of Britain’s electricity needs.

 

16 February

 

On Wednesday, all-world stock indices traded at all-time highs for the first time since spring 2015. US 10-year bond yields rose back to 2.5 per cent. Bank stocks rallied, with Goldman Sachs at an all-time high for the first time in a decade. So did tech stocks — Apple is back at a record. All of this after a hawkish appearance before Congress by Janet Yellen which might until recently have been expected to scare the markets. And all of this as political uncertainty rises, with President Donald Trump already in the midst of a serious scandal while populists attempt to take power in elections due across Europe.

 

The European Central Bank notched up a €111m rise in profits last year on the back of rising interest income earned from its swelling balance sheet. In its latest set of annual financial results, the central bank said its total profits hit €1.19bn last year, as it earned a bumper €1.04bn in interest on the assets it has bought up as part of its stimulus measures since March 2015.

 

China has called an end to a six-month streak of dumping US Treasuries and returned in December to being a net buyer of US government debt again for the first time since last May. The move is part of a series of measures the country has introduced to manage capital flight. China’s foreign exchange reserves slipped below $3tn in January, its lowest for nearly six years. 

 

Heineken’s shares hit a three-month high on Wednesday after it posted improved operating profit margins for 2016 and forecast a better performance this year, but warned of volatile economic conditions and unfavourable currency movements.

 

17 February

 

Norway’s government has proposed making the biggest changes to the world’s largest sovereign wealth fund in decades, increasing its risk by investing about $90bn more in stock markets and cutting the amount of oil money it can use in the budget.

 

Singapore’s gross domestic product grew faster than initially thought in the final quarter of 2016, with greater growth in manufacturing bolstered by the electronics and biomedical sectors.

 

US and European stock markets paused for breath following recent strong gains while the dollar sank and Treasury bonds rallied as the post-US election “reflation trade” struggled to maintain its momentum.

 

Stock in Samsung Electronics fell as much as 1.6 per cent at the open on Friday after the early-morning arrest of Lee Jae-yong, heir apparent of Samsung Group.