December, 2018

• 18 December

  China is confronting its eternal dilemma again

  China’s top leaders meet this week in Beijing to set economic policy objectives for the coming year. The central question is whether they will do what they want or what the country needs. Clear evidence has emerged in the past couple of months that the Chinese economy is slowing to an uncomfortable degree. That’s raised expectations that the leadership will ...

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• 18 December

  A breath of fresh air at India’s central bank

  

  Critics have called the resignation of India’s former central bank chief Urjit Patel and appointment of former Finance Ministry official Shaktikanta Das as his replacement a blow to the hard-won independence of the Reserve Bank of India (RBI). Such fears are overblown. The changeover at the RBI is something else entirely: an opportunity to rebuild the central bank’s badly damaged ...

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• 18 December

  Hitachi’s ABB deal isn’t just an escape hatch

  

  Whenever a Japanese company acquires an overseas asset, the rationale is typically that it’s finding a way to survive the country’s aging demographics and shrinking returns. But Hitachi Ltd’s 800 billion yen purchase of ABB Ltd’s power grid business is bigger than that. The Hitachi-ABB deal, while on the expensive side, is high-margin for the Japanese industrial conglomerate, and could ...

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• 18 December

  Yep, Bitcoin was a classic bubble. And it popped

  

  It seems like every asset bubble has a famous anecdote of someone claiming, right at the top, that a crash is impossible. In the stock-market bubble leading up to the Great Depression, it was economist Irving Fisher, who declared in the New York Times that stocks “have reached what looks like a permanently high plateau” a few days before a ...

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• 18 December

  ECB’s $204bn corporate bond buying upends credit markets

  

  Bloomberg The European Central Bank’s purchase of almost 180 billion euros ($204 billion) of corporate bonds has upended the region’s credit markets, even if some fast-moving indicators are back to pre-intervention levels. Metrics such as spreads and the number of negative-yielding bonds have largely returned to levels seen in early 2016, before the ECB announced plans to start buying corporate ...

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• 18 December

  Banks test Frankfurt rate swaps move

  

  Bloomberg Deutsche Bank AG and 16 other lenders recently tested moving interest-rate swap positions from London to Frankfurt, according to people familiar with the matter, a signal that financial firms are pushing ahead with preparations for no-deal Brexit. The banks made dummy trades on December 3 in the first known dry run of a service that could move trillions of ...

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• 18 December

  German debt sales rise over ‘bad bank’ fund refinancing

  

  Bloomberg Germany’s federal government plans to increase gross borrowing by around 15 percent to 199 billion euros ($226 billion) next year to accommodate refinancing of the nation’s “bad bank” fund that was set up during the height of the financial crisis. The government will sell 156 billion euros in bonds and 43 billion euros in short-term bills, according to the ...

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• 18 December

  Australia central bank sees rates on hold

  

  Bloomberg Australia’s economy faces a trifecta of risks that could disrupt household spending and the central bank’s outlook for faster economic growth and falling unemployment. In minutes of its last policy meeting for the year, the Reserve Bank (RBA) struck a slightly dovish tone. It noted a “generalised tightening of credit availability” in the economy even as it stuck to ...

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• 18 December

  Swiss National Bank cuts inflation forecast

  Bloomberg The Swiss National Bank (SNB) cut its inflation forecast and showed no inclination of moving off its crisis-era settings, citing franc’s strength and mounting global risks. Investor anxiety about Italian politics, trade tensions and Brexit has put upward pressure on the franc in recent months, dragging it further away from its April low against the euro. Highlighting those risks, ...

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• 18 December

  Amazon’s best-selling TV  comes via its rival Best Buy

  

  Bloomberg Amazon.com Inc.’s shadow looms large over most US retailers this holiday season, but the online giant could prove to be bright spot for Best Buy Co. Two of the top five best-selling televisions on Amazon are models sold on Best Buy’s new storefront on Amazon, which the companies unveiled over the summer. The TVs come equipped with Amazon’s Fire ...

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