Inflation Helped Most Indebted Eurozone Budgetary Positions Improve

With all the doom and gloom headlines you maybe somewhat surprised to find out there have been huge improvements in budgetary positions in many European nations. More significantly the biggest debtor nations have seen the biggest improvements. Why? Inflation is adding more to revenues than it is to spending, this is reducing debt-to-national-income ratios by both lowering debt and by boosting (nominal) income. Europe was affected by the Russian gas supply cut; however, it could have been much worse. The … Continue reading “Inflation Helped Most Indebted Eurozone Budgetary Positions Improve”

Germany’s Economy Unexpectantly Contracts in Q4

Germany’s gross domestic product (GDP) contracted 0.2 percent for the quarter in the final three months of 2022, following an upwardly revised 0.5 percent expansion in the previous period. The market expectations of 0.0% q/q. The contraction in Europe’s largest economy was mainly led by a decline in household consumption, amid rising interest rates and stubbornly high inflation. By comparison the US economy increased at an annual rate of 2.9% in the fourth quarter, ahead of consensus 2.6%. On a … Continue reading “Germany’s Economy Unexpectantly Contracts in Q4”

Standard & Poor’s Affirm Australia’s AAA Rating with a Stable Outlook.

The ratings agency S&P Global Ratings reaffirmed its AAA long-term sovereign credit rating and A-1+ short-term rating for Australia. S&P issued a note saying Australia should avoid a recession amid record low unemployment and elevated commodity prices, even as the economy slows this year amid higher interest rates. The RBA is expected to announce another 25 basis point increase in the official cash rate after its board meeting next Tuesday. S&P said Australia’s ratings were supported by “strong institutions, which … Continue reading “Standard & Poor’s Affirm Australia’s AAA Rating with a Stable Outlook.”

What’s Next for Adani Group After Short Seller Hindenburg Report Wipes Out Over $50 Billion in Market Value

Indian stock markets were rattled last week by the attack on the Adani Group from US activist investor and short-seller Hindenburg Research’s report into the Indian conglomerate caused Adani’s shares to fall spectacularly. Five of the seven listed Adani Group companies ended the day after 16% to 20% lower, and the other two were halted at the maximum 5% permitted by India’s exchanges for their stocks. Indian stocks had been at all-time highs just over a month ago, the market’s … Continue reading “What’s Next for Adani Group After Short Seller Hindenburg Report Wipes Out Over $50 Billion in Market Value”

Brazil and Argentina Plan for a Latin American Common Currency

Two of Latin America’s largest economies Brazil and Argentina with eyes to strength in numbers along the lines of the Euro, plan a common currency to reduce the risk that comes with relying on the US dollar. Both countries have been in a cycle of a financial roller coaster since the Latam financial crisis of the 1970’s. Market crashed continue to pop up in recent years. The hope is it would strengthen trade amongst the group. It would at first … Continue reading “Brazil and Argentina Plan for a Latin American Common Currency”

2023 Year of the Rabbit, What Does it Mean for You and Financial Markets

The lunar new year typically falls on the second new moon after the winter solstice and is celebrated in countries across East and Southeast Asia, including China, Korea, Japan, Vietnam, Singapore, and Taiwan. The year of the rabbit in the Chinese zodiac occurs every 12 years and the next one begins Sunday January 22, 2023. Lunar New Year is also known as the Chinese New Year or the Spring Festival when Asian communities around the world this year will say … Continue reading “2023 Year of the Rabbit, What Does it Mean for You and Financial Markets”

Turkey Central Bank Left Interest Rates Unchanged at 9% As Lira Hits New Lows

The Central Bank of Turkey left its key one-week repo rate unchanged at 9% in its January meeting on Thursday, as expected, saying the current policy rate is adequate.  The bank had cut key interest rates in November for the fourth consecutive month. The Turkish lira held a record low of 18.8 per USD after the announcement. There has been concerted pressure from President Recep Tayyip Erdogan wanting rates cut to stimulate the economy, but the collapsed Lira and soaring … Continue reading “Turkey Central Bank Left Interest Rates Unchanged at 9% As Lira Hits New Lows”

Bank Negara Malaysia Leaves Interest Rates Unchanged to Assess Previous Hikes Impact

The central bank of Malaysia, Bank Negara Malaysia surprised markets by leaving its key overnight policy rate steady at 2.75% in the first meeting of 2023 on Thursday. Markets had forecast a 25bps increase. Bank Negara said it wants to assess the impact of the previous four rate hikes. Policymakers noted that the current policy stance remains accommodative and supportive of economic growth and further normalization would depend on the evolving conditions and their implications to the domestic inflation and growth … Continue reading “Bank Negara Malaysia Leaves Interest Rates Unchanged to Assess Previous Hikes Impact”

Bank Indonesia Raised Rates Another 25 basis points to Highest Level Since 2009

Bank Indonesia increased interest rates by 25 bps during the first meeting of 2023, a sixth consecutive hike, on Thursday as it sought to tame inflation and strengthen the rupiah exchange rate. The benchmark 7-day reverse repurchase rate now stands at 5.75%, the deposit facility at 5.00% and the lending facility at 6.50%, their highest level since 2009 and in line with market forecasts. So far since August last year the central bank has lifted rates by 225bps. Indonesia’s annual inflation rate … Continue reading “Bank Indonesia Raised Rates Another 25 basis points to Highest Level Since 2009”

Semiconductors Lift South Korean ICT Exports to All Time High in 2022

South Korea shipments of information and communications technology (ICT) products in 2022 reached an all-time high of USD 233.3 billion, up 2.5 percent from 2021.  ICT exports achieved a trade surplus of $80.9 billion and make up 34.1% of Korea’s total annual exports. Imports went up 12.9% to $152.5 billion. ICT exports to most major regions expanded, however shipments to South Korea’s largest trading partner, China (including Hong Kong) shrank 4.9% to $102.3 billion as zero-COVID lockdowns and halted production lines … Continue reading “Semiconductors Lift South Korean ICT Exports to All Time High in 2022”