Government & Agencies

UK is now risky lab rat for rich tax-perk reform

4 Dec 2024

Thousands of Britain-based families look to have moved to the UAE. One key driver is the abolition of ‘non-dom’ rules that in 2022 shielded 37,800 residents’ offshore cash from tax. The UK may be right that the reform will raise revenue – but it’s on the hook if it doesn’t.

China can let new bond binge play out – for now

4 Dec 2024

Last time treasury yields dived, the central bank jumped in. Now they’re even lower, but there is less official fuss. Concern over speculation has eased and the government is about to borrow billions. That resets the bar for intervention.

South Korea curveball adds new 2025 risks

4 Dec 2024

Fallout from Great Power tensions tends to dominate the minds of political and financial leaders. So the abortive coup in the $2 trln economy may seem just a domestic issue. But ructions within the major US ally and chipmaking hub may yet reverberate in Asia and beyond.

Macron’s options all spell trouble for French debt

3 Dec 2024

The country’s government may collapse, putting the ball in President Emmanuel Macron’s court. He can appoint another centrist prime minister, pick a leader sympathetic to the far right, or call a presidential vote. None of those moves shrink a budget deficit hitting 6% of GDP.

New Stellantis CEO’s first job is a US reset

2 Dec 2024

Carlos Tavares’ abrupt exit comes after the $34 bln carmaker hiked prices and lost market share. The ideal new CEO – able to steer a course around Trump, EU emissions rules and new tech – may not exist. Stellantis could settle for a US expert who can get car dealers back on side.

Why Mexico’s global trade sweet spot may turn sour

2 Dec 2024

The country has hugely benefitted from the 'nearshoring' trend, and last year surpassed China with $475 bln of US goods exports. President-elect Donald Trump’s 25% tariff plan would undermine that progress. And the new Mexican government has little room to soften the blow.

India’s slowdown flashes an early-warning signal

2 Dec 2024

GDP growth slipped to 5.4% last quarter, the slowest pace in nearly two years, on weak manufacturing and spending. Perhaps it’s a blip. But the Adani fallout, Trump tariff threats and China stimulus could all deal blows to rosy assumptions about the world’s fifth-largest economy.

Currency drop worsens Moscow’s stagflation fears

29 Nov 2024

The Russian central bank may have to hike interest rates from an already high 21% after this week’s rouble meltdown, caused by US sanctions on a key bank. But its real problem is that inflation keeps rising as the economy is slowing, deepening fears of a crash-landing.

France faces long-term pain more than debt crisis

28 Nov 2024

Fears that PM Michel Barnier will be ousted by parliament after failing to pass his budget sent French spreads to a 12-year high. The country’s size and resources shield it from a sharp fiscal crunch, but six months without a proper government would weigh heavily on its finances.

European pharma’s growth prescription: pivot to US

28 Nov 2024

Novartis, Novo Nordisk and regional rivals lost $86 bln in value over concerns about tariffs and other possible measures by President-elect Donald Trump. Stateside M&A and manufacturing moves could ease the pain and boost revenue. But hopping across the pond will mean paying up.

Oil’s geopolitical risk premium is still there

27 Nov 2024

Israel and Iran-backed Hezbollah have struck a peace deal brokered by the US and France. In theory, a calmer Middle East plus weaker demand forecasts should prompt a tangible slide in the price of crude. But a tougher US policy on Iran merits an ongoing risk premium.

Big Tech’s Irish grip is immune to election shocks

27 Nov 2024

Sinn Féin wants Ireland to ditch its centre-right coalition. If their hard-left policies win, it would give the likes of Google a fright. But with a cadre of multinationals providing 60% of corporate tax receipts, policy will continue to be weighted towards them regardless.

Indian business may learn wrong lesson from Adani

27 Nov 2024

US corruption charges against tycoon Gautam Adani have cast a shadow over Narendra Modi’s war on graft. The prime minister has made progress. But rather than spurring a cleanup in the $4 trln economy, the saga might just make its capitalists warier of tapping global markets.

Italian bank M&A circus risks sidelining investors

26 Nov 2024

Andrea Orcel’s UniCredit offered 10 bln euros for Banco BPM, irking Rome and potentially eliciting a rival swoop from the target’s 9.2% owner Crédit Agricole. Meanwhile BPM may launch its own bid for Monte dei Paschi. The risk is that shareholder interests get lost in the noise.

Mapping the way for Elon Musk’s efficiency drive

26 Nov 2024

Tesla’s CEO has touted the idea of slashing $2 trln from the bureaucracy, a fanciful figure that exceeds optional budget items and threatens to ape the worst of UK and Argentine austerity. There may be a tortuous path to cut $500 bln, but improving services is a far better route.

Trump’s tariff gambit doesn’t have to make sense

26 Nov 2024

Economists pencilled in maximum levies of 20% but the president-elect is now promising 25% for Mexico and Canada and a fresh 10% for China. His linking of those to fentanyl flows to the US shows taxes are a cudgel to use at will, not just a tool for rebalancing global trade.

Russian assets could be Trump card in Kyiv endgame

25 Nov 2024

The incoming US president wants to end the Ukraine war quickly, in part because he does not want to pay to defend the country. If Europe promised to find the cash – perhaps from Moscow’s $300 bln frozen reserves – Donald Trump might hold out for a better deal with Vladimir Putin.

COP29 steals defeat from jaws of abject failure

25 Nov 2024

The $300 bln-a-year financing target for poorer states adopted at the UN climate shindig is woefully inadequate. It also assumes the West will provide part of the cash from sources it's leery of, like carbon taxes. The saving grace is that diplomacy lives to fight another day.

Trump Treasury pick is a Rorschach test, for now

22 Nov 2024

Hedge funder Scott Bessent is a Wall Street veteran, yet a fierce loyalist to a tariffs-and-tax-cuts agenda. The idea of a safe pair of hands may soothe market fears over less conventional potential picks. But that image can only last if he blunts Trump’s most out-there impulses.

There are few good ways out of China’s stock slump

21 Nov 2024

Despite a recent bounce driven by stimulus hopes, the country’s benchmark equity index is down by nearly a third in the past three-and-a-half years. Though valuations look cheap, Donald Trump’s return to the White House could lead to even worse outcomes for investors.