Bloomberg (July 6)
“Donald Trump’s war against Iran may be over, but the repercussions for global monetary policy are here to stay.” In particular, “the path for central bank interest rates around the world has now shifted higher for years to come.” Forecasts for borrowing costs calculated by Bloomberg Economics (BE) “show trajectories elevated by as much as half a percentage point or more through 2028 compared with those envisaged before the war. That’s both on BE’s global gauge for rates, and its measure for advanced economies.”
Tags: 2028, Bloomberg Economics, Borrowing costs, Central bank, Elevated, Forecasts, Global, Higher, Interest rates, Iran, Monetary policy, Repercussions, Trump, War
Reuters (January 18)
The anticipated “mega-merger boom threatens a shareholder bloodbath.” As global conditions improve and central banks cut borrowing costs, mega-deals are expected to proliferate. An expected lighter regulatory touch will provide extra momentum. Based on past results, however, “when acquisitions reach $10 billion or more… the worst fears of shareholders are often confirmed.” Large acquirers generally end up trailing industry peers by 5% in median annualized total return.
Tags: Acquirer, Acquisitions, Bloodbath, Boom, Borrowing costs, Central banks, Expected, Fears, Lagging, Mega-merger, Momentum, Regulatory, Shareholder
FX Empire (October 26)
The IMF’s latest forecast counteracted any hope attached to China’s stimulus policy. “Markets reacted positively” when the People’s Bank of China “cut 1-year and 5-year loan prime rates (LPR) by 25 basis points” since “lower borrowing costs could drive credit demand and consumption.” In contrast, “the IMF’s latest growth projections… called for caution,” with 2024 growth forecast for China lowered from 5.0% to 4.8%.” Moreover, the IMF pointed out that “Beijing’s maneuvers may not be enough to support an economic recovery.”
Tags: 25 bp, Borrowing costs, Caution, China, Consumption, Credit demand, Economic recovery, Forecast, Growth projections, IMF, Markets, PBOC, Rates, Reacted, Stimulus
Reuters (September 5)
“Global property markets, rattled by the steepest rise in interest rates in a generation, will get little relief from the gradual easing of borrowing costs, with scant hope of a return to the free money that fuelled a boom.”
Tags: Boom, Borrowing costs, Free money, Global, Gradual easing, Interest rates, Property markets, Rattled, Relief, Rise, Scant hope, Steepest
Washington Post (June 4)
“The European Central Bank on Thursday is almost certain to lower its benchmark interest rate for the first time in nearly five years. The move will come as the Federal Reserve remains on hold with plans to trim U.S. borrowing costs, amid inflation that is proving more stubborn than anticipated.” For the ECB, however, inflation appears to be “less of a problem than the weak growth outlook.”
Tags: Benchmark, Borrowing costs, ECB, Fed, Inflation, Interest rate, Lower, Outlook, Stubborn, U.S., Weak growth
Bloomberg (May 24)
“Overseas issuers sold yen bonds at the fastest pace in five years so far this month, chasing cheap funds before an expected interest rate hike by the Bank of Japan pushes up borrowing costs.”
Tags: BOJ, Borrowing costs, Cheap funds, Expected, Fastest pace, Hike, Interest rate, Overseas issuers, Yen bonds
Financial Times (December 23)
“The UK economy shrank slightly in the third quarter.” Revised figures “highlight the country’s struggle to shake off its low-growth performance and raise the risk of a technical recession…. The UK economy is stuck in a lacklustre state as it struggles with high borrowing costs and the legacy of the worst inflationary upsurge for a generation.”
Tags: Borrowing costs, Economy, Growth, Lacklustre, Q3, Revised, Risk, Struggle, Technical recession, UK
Reuters (May 2)
“Diversifying abroad looks attractive to many Japanese companies given weak home markets” as demonstrated by Astellas recent $5.9 billion acquisition of Iveric Bio. “For the $28 billion drugmaker, which already earns the bulk of its revenue from overseas, exceptionally low borrowing costs at home may have boosted its offshore appetite even more.”
Tags: Acquisition, Astellas, Attractive, Borrowing costs, Diversifying, Drugmaker, Home markets, Iveric Bio, Japanese, Offshore appetite, Overseas, Revenue, Weak
Reuters (March 17)
“Investors held tight to bets that banking jitters would rein in the ECB’s ability to jack up borrowing costs again in the months ahead, as the central bank delivered a large rate hike on Thursday but wouldn’t signal future moves given an uncertain outlook.”
Tags: Banking, Bets, Borrowing costs, Central bank, ECB, Investors, Jitters, Rate hike, Signal, Uncertain outlook
Financial Times (August 22)
“China has slashed its mortgage lending rate for the second time this year as the country’s central bank seeks to limit the fallout from a liquidity crisis in the property sector.” While this may “reduce borrowing costs on new mortgages nationwide and provide a boost to the country’s debt-laden real estate sector,” it is unlikely to fix the “crisis of confidence faced by Chinese developers.”
Tags: Borrowing costs, Central bank, China, Crisis of confidence, Debt-laden, Fallout, Lending rate, Liquidity crisis, Mortgage, Property sector, Real estate, Slashed
