Money‚ Markets & Macroeconomics

UK ratesetters can stop worrying and start cutting

31 Jul 2024

Markets are split on whether the Bank of England will lower borrowing costs from a 16-year high of 5.25% on Thursday. Governor Andrew Bailey worries about services prices, wages and growth. But a glimpse into the future shows that those bugbears are less scary than they look.

China looks to the little guy for spending boost

31 Jul 2024

Beijing wants to raise wages for low- and middle-income groups to lift consumption. Combined with higher taxes on the wealthy, that's wise. Yet those policies are unlikely to deliver immediate growth. Officials will have to lean on fiscal expansion to hit their GDP target.

UK’s half-empty fiscal glass is slowly filling up

30 Jul 2024

Finance minister Rachel Reeves announced public spending cuts to fill a 22 bln pound hole left by the old government and raise pay for teachers and doctors. She will also need to hike taxes. But a better financial picture in future years tempers her gloomy narrative.

Ola down round will worry India’s IPO hopefuls

30 Jul 2024

The SoftBank-backed e-scooter maker wants to go public at a valuation up to $4 bln, a quarter lower than when it last raised money. It's a sign that investor patience towards unprofitable tech stars is running thin. Upstarts eyeing a debut, like Swiggy, will be paying attention.

Halting China stock flows data cuts both ways

30 Jul 2024

Mainland China bourses will cease daily readouts of net foreign purchases after cutting live feeds in May. It'll mask rising outflows, but also leave fund managers unable to gauge demand for the country’s $10 trln market and undermine willingness to jump back in if shares rise.

Japan’s auto rally betrays global EV anxiety

29 Jul 2024

Shares of Mitsubishi, Nissan and Honda rose on a mooted three-way alliance despite a dearth of details. The trio’s success will depend on how well they can use that scale to cut costs as the race to develop smarter, cleaner cars jeopardises the industry's profitability.

Fed’s next challenge: the unemployment boogeyman

26 Jul 2024

The central bank’s steady hand on rates has solidly given the economy a soft landing. Strong 2.8% second-quarter growth provides a cushion as inflation, at 2.5%, melts away. But joblessness can become a tipping point for wages, consumption, and GDP. Risks are creeping in.

Paris Olympics warrant medal for budget restraint

26 Jul 2024

The French capital has forked out $9 bln on the Games, but compared to some previous hosts the cost overruns have not been excessive. Pre-existing infrastructure helped. Given France’s political ructions and high deficits and debt, such relative sangfroid is well timed.

Hyundai’s extra gear is short on staying power

26 Jul 2024

Earnings at Korea’s largest carmaker jumped 23% last quarter, bucking a trend that had rivals from Tesla to GM to Nissan stalling. Yet investors have wiped almost 6% off the share price. Robust hybrid and SUV sales may not offer lasting protection as consumer confidence falters.

Donald Trump may dent but not dethrone King Dollar

26 Jul 2024

The US currency’s long-predicted demise has so far failed to materialise. The former president’s possible return to the White House is a reason to reconsider. While the greenback remains unassailable as the de facto global standard, its days of cyclical strength may be numbered.

Chinese EV IPO drives a precarious line in Asia

26 Jul 2024

Hozon may raise $1 bln in Hong Kong to finance a regional expansion. Countries like Thailand and Indonesia hold even more appeal for the Neta maker and rivals like BYD as the EU and US erect roadblocks. But pushing hard into small markets risks rapid saturation and a backlash.

India wants to be China’s gateway to the West

26 Jul 2024

Rather than integrate into its neighbour’s supply chain, the South Asian country wants to court Chinese investment. Its annual economic survey lays out a way for firms from Shein to BYD to keep selling in Western markets. A lot rides on how the Sino-American trade war plays out.

China’s leaders pitch their tent in a rainstorm

25 Jul 2024

The five-yearly Communist Party meeting known as the Third Plenum is historically tied with economic policy shifts. Slowing growth and rising trade tensions make the timing apt. In this Viewsroom podcast, Breakingviews columnists discuss what the event means for China’s future.

China’s slump hints at a unique liquidity trap

25 Jul 2024

Record money supply has failed to revive growth. As the impact of monetary loosening fades, Beijing is ready to spend on welfare to encourage savers to consume. Inspiring the private sector to invest in a ‘socialist market economy’ is a trickier part of the problem to solve.

Euro-banks offer glimpse of possible bad-debt wave

24 Jul 2024

Deutsche upped its forecast loan-loss charge, contributing to a 7% share-price fall. BNP’s default provision spiked, and UniCredit’s has too in Germany. Most of the bad news relates to just a few specific corporate clients. But there will be more if rates stay higher for longer.

China stocks’ ‘policy put’ is breaking down

24 Jul 2024

Chinese markets' bull run has come undone as hopes for significant stimulus crumble. Without follow-through on vows to shore up the economy, trading cycles could grow shorter and more volatile as speculators race to profit off fleeting rallies spurred by signals from Beijing.

Two old loves come back to haunt Singapore’s GIC

24 Jul 2024

Taking a long view is a hallmark of the $770 bln sovereign fund. Still, a big exposure to emerging-market equities, including China, and to bonds and cash, is spoiling returns. The city-state has a lot riding on whether that improves in the short term.

Tech poster child poses a problem for Korea Inc

23 Jul 2024

Billionaire Brian Kim’s arrest for his role in a K-Pop deal adds to his Kakao empire's mounting legal woes. Its dominance in messaging also is a regulatory headache. Yet a tough crackdown on the company could jeopardise the country’s new breed of promising global businesses.

China rate cuts usher in next stimulus stage

22 Jul 2024

Days after Party leaders unveiled sweeping pledges to revive the $17 trln economy, the central bank unexpectedly cut key lending rates. It's a modest move but helps the PBOC establish a new benchmark and signals Beijing's urgency to speed up reforms. More policies will follow.

UK growth fix can start with pampered rich savers

19 Jul 2024

New Prime Minister Keir Starmer wants to unblock Britain’s dismal economy. One aid would be to raise revenue by cutting superfluous tax perks for wealthy savers. Another is to find a way to deploy UK savings in more growth-enhancing assets than is currently the case.