Financial Times (June 8)
“Donald Trump’s gyrations on trade policy have not broken global financial markets just yet — but what is happening in Hong Kong shows they are feeling the strain.” For over a month, Hong Kong’s interest rates remained fixed at just above 0%, which is peculiar, “Its currency is pegged to the US dollar” so this presents a prime arbitrage opportunity, which is going untaken. “This little episode reveals a disturbing fragility. Markets may appear to be taking all of the Trumpian disruption in their stride, but when a dislocation of this sort persists for more than a month, it is a warning sign. Watch out for trouble ahead.”
Tags: 0%, Arbitrage, Broken, Currency, Dislocation, Dollar, Fragility, Global financial markets, Gyrations, Hong Kong, Interest rates, Peg, Strain, Trade policy, Trump, U.S.
Reuters (March 18)
Top banking heads in Australia believe the Trump administration’s “protectionist policies would likely strain the global economy in the medium term with higher costs and lack of certainty.” However, they believe Australia is “better placed than Canada, which sells 85% of its exports to the U.S.” In contrast, Australia’s U.S. exports are, “small compared to its overall export trade,” amounting annually to only about $15 billion.
Tags: $15 billion, Australia, Banking, Canada, Certainty, Exports, Global economy, Higher costs, Protectionist policies, Strain, Trade, Trump administration
Reuters (August 7)
“Tackling China’s $470 billion bad debt pile is getting harder.” China Bohai Bank is “selling non-performing assets worth $4 billion,” underscoring “the pressure lenders are under as the country’s property bubble bursts. Yet buyers are feeling the strain too,” which will likely make the terms for subsequent disposals more onerous.
Tags: $470 billion, Bad debt, Buyers, China, China Bohai Bank, Disposals, Lenders, Non-performing assets, Pressure, Property bubble, Strain, Tackling
Houston Chronicle (March 2)
“Houston is the nation’s first city to record every major variant of the novel coronavirus—many of which are more contagious than the original strain.” This unwelcome milestone “comes barely a week after the ever-evolving virus’ death toll in the United States passed the half-million mark, a grim figure that…experts believe will continue to increase unless Americans double-down on social distancing, masks and vaccination efforts.”
Tags: Contagious, Coronavirus, Death toll, Distancing, Double-down, Experts, Houston, Masks, Milestone, Original, Strain, U.S., Variant
Bloomberg (August 22)
The European Central Bank’s quantitative easing program “has driven down European credit spreads.” In September, as the ECB scales down this operation, it’s “going to be a tough wrench seeing the biggest buyer in the room step away. Average spreads over benchmark government bonds may already be showing the strain.”
Tags: Benchmark, Biggest buyer, Credit spreads, ECB, Government bonds, QE, Strain
The Economist (September 23)
“Tensions over China’s industrial might now threaten the architecture of the global economy. America’s trade representative this week called China an ‘unprecedented’ threat that cannot be tamed by existing trade rules. The European Union, worried by a spate of Chinese acquisitions, is drafting stricter rules on foreign investment. And, all the while, China’s strategy for modernising its economy is adding further strain.”
Tags: Acquisitions, China, EU, Foreign investment, Global economy, Strain, Tension, Threat, Trade rules, U.S.
