UK gilts are ready to regain their long-lost shine 12 Jul 2024 British government bond prices are off 24% in three years due to a budget crisis, tight monetary policy and political turmoil. Yet the UK now has a fiscally austere new administration with a big majority and a central bank ready to cut borrowing costs. That could stop the rot.
Markets will keep shaky French regime on a leash 11 Jul 2024 A left-wing coalition and Emmanuel Macron’s centrists are vying for control of France’s government. Fiscal discipline may fall by the wayside. Paris is already being disciplined by Brussels for its high deficit and debt. A reliance on foreign investors leaves little wiggle room.
UK’s Labour takes dicey punt on a laxer City 11 Jul 2024 Chancellor Rachel Reeves’ endorsement of pre-existing regulatory proposals to boost London’s stock market will endear her to bankers working on deals and IPOs. But asset managers dislike plans that involve diluting shareholder rights. And Labour needs their help to boost growth.
UK green fund has risky but valid investor carrots 10 Jul 2024 The new government’s ‘National Wealth Fund’ is really $9 bln of public cash with capped returns. The risk is private investors slated to provide treble that figure get too good a deal. But with the UK’s energy transition requiring $64 bln a year, a degree of largesse makes sense.
India’s Russia bonhomie shows limits of bipolarity 10 Jul 2024 Narendra Modi met Vladimir Putin in Moscow on the first state visit of his third term. The $65 bln bilateral trade between the pair is booming at a time when India's business relationship with the US is shrinking. It upends popular neat visions of a bifurcating world order.
EU’s China trade weak spots hide in plain sight 9 Jul 2024 Beijing may retaliate after Brussels imposed tariffs on Chinese-made electric vehicles. Of the 5,000 product groups the People’s Republic imports from the EU, many are too crucial or too small to bother with. But luxury goods, petrol cars and some foods are plausible targets.
Economic cycle’s age is as problematic as Biden’s 9 Jul 2024 The US president’s record is pristine when it comes to an indicator that stymied former incumbents who lost re-election: unemployment. But that’s changing, and the cumulative effect of inflation makes for a mishmash of mediocrity. For Joe Biden, the election may come too late.
Global economy finds new ways to keep growing 8 Jul 2024 Despite fears of a slowdown, world GDP is expanding at 3.5% a year, faster than in 2023. As the US engine loses thrust, Europe and emerging markets are picking up. A sluggish China and geopolitical confrontations are risks. But for now, investors can enjoy a Goldilocks moment.
French election shock puts Macron in new quandary 7 Jul 2024 The left will dominate France’s parliament after Sunday’s runoff, while Marine Le Pen’s far right suffered a surprise setback. President Emmanuel Macron will struggle to build a centrist coalition. But appointing a left-leaning prime minister would leave investors on edge.
Labour ‘open for business’ stance faces early test 5 Jul 2024 New UK PM Keir Starmer wants to boost growth and attract capital. He must balance those priorities with political anxiety about inbound investment. Companies like Royal Mail and Thames Water will show where he draws the line, and how he wields extensive powers to block M&A.
Shein maps out how to charm the world in India 5 Jul 2024 The $63 bln fast fashion giant is relaunching four years after it was banned, this time in an alliance with Mukesh Ambani's Reliance. If Shein can claw its way back into a country that aggressively curtailed Chinese interests, partnerships may be the way forward elsewhere too.
Labour’s election win brings power and pitfalls 5 Jul 2024 Keir Starmer is Britain’s new prime minister after his Labour Party won over 410 seats in Thursday’s vote. The electoral landslide gives clarity, a mandate to boost growth and potentially a path to tax wealth. But self-imposed constraints mean change may be too gradual.
UK elections herald return to tarnished stability 4 Jul 2024 Polls suggest voters will hand Rishi Sunak’s Conservative Party a historic defeat. In this Viewsroom podcast, Breakingviews columnists discuss how a new government might pick up the pieces amid the legacy of a now-immutable Brexit and political turmoil engulfing global peers.
Le Pen will fail as star of Meloni in Paris 3 Jul 2024 Markets are relatively calm about the prospect of a far-right government after Sunday’s second electoral round. They may believe that Marine Le Pen’s party would mimic the apparent moderation of Italy’s Giorgia Meloni. Her fiscal plans, inexperience and beliefs suggest otherwise.
New UK government can claim competence dividend 2 Jul 2024 Eight years of political upheaval and economic uncertainty raised the risk premium for investors. Now the centrist Keir Starmer is set to take over, while France and the US face electoral turmoil. For the first time since the Brexit vote, the country looks a relative safe haven.
US deregulatory triage ranges from cars to drugs 1 Jul 2024 The Supreme Court has curtailed agencies’ power to act beyond the bounds of explicit legislation. With no legal doctrine to guide what happens next, everything from Biden administration efforts to support electric vehicles to the basics of approving medicines is under the gun.
The risk of a euro crisis is rising 1 Jul 2024 While political instability in France adds to the single currency’s fragility, it probably won’t trigger another meltdown. But euro zone members’ high debts, pressing spending needs and low growth at a time of rising nationalism and geopolitical conflict are storing up trouble.
Would-be Biden donors may start to think twice 28 Jun 2024 Billionaire backers like to spread money to both candidates in the US presidential election as an insurance policy. But the incumbent’s shaky debate performance might give some pause. It comes at a bad time. With $117 mln on hand, Trump has a 40% bigger war chest than Biden.
China’s Third Plenum will jolt the economy, again 28 Jun 2024 Xi Jinping has a chance to lay out his answer to major issues including weak consumption at July’s five-yearly huddle of top officials. Previous meetings set the tone for the country. This one is much delayed and will determine China’s interest in making itself “investible”.
White-collar crime gets crack at messy due process 27 Jun 2024 The US Supreme Court dealt a blow to securities regulators Thursday by requiring jury trials in cases of fraud. Neither courts nor regulators have resources for that. Plus the ruling opens the door for internal courts at other agencies – from the FTC to FERC – to be weakened.