[Spiegel] Germany Prepares for Trade Conflict with Trump
[Bloomberg] South Korea Protesters Hold Mass Rally Demanding Ouster of Park
[Bloomberg] Castro’s Death a Reminder in China of Changed Communist Axis
Financial Times: “The relentless rise of the dollar scorched emerging market currencies on Thursday, sending China’s renminbi to its weakest level in eight years, while India’s rupee plumbed a record low.
November 21 – Bloomberg: “Dollar strength and rising U.S. interest rates under President-elect Donald Trump would intensify pressure on capital outflows from China, forcing its policy makers to choose between tightening capital controls or a drastic floating of the currency in coming months.
November 24 – Financial Times (Claire Jones, Dan McCrum, Thomas Hale and Elaine Moore): “Hopes of a fix to the collateral squeeze facing the eurozone’s €5tn short-term funding markets were boosted this week after reports emerged the European Central Bank will consider ways to ease rules on how it lends its stockpile of sovereign debt. A lack of good quality collateral, which market participants use to secure loans, has crippled the single currency area’s short-term funding (‘repo’) markets. One big reason for the shortage is that the eurozone’s central bankers have spent the past year-and-a-half buying €1.1tn in government bonds… as part of their quantitative easing programme to boost growth.”
November 21 – Reuters (Gernot Heller and Joseph Nasr): “German Finance Minister Wolfgang Schaeuble called on the European Central Bank… to start unwinding it expansive monetary policy, adding that such a reversal should be done cautiously. ‘I will not get tired of saying that I would prefer it if we started as soon as possible,’ Schaeuble said. ‘Exiting this unusual monetary policy should be done with immense caution,’ he added, warning of possible shock reactions to such steps.”
November 22 – Wall Street Journal (Christopher Whittall and Mike Bird): “The European Central Bank began buying billions of euros worth of corporate bonds earlier this year in a high-profile experiment aimed at spurring private investment. So far, the spending hasn’t materialized.
November 24 – Bloomberg (Alessandro Speciale, Piotr Skolimowski and Catherine Bosley): “The European Central Bank is confident it will be able to continue shielding the euro area from the risk of a sudden correction in asset prices, after political events such as the election of Donald Trump threaten to increase volatility in coming months. ‘We are certainly seeing a correction coming from the U.S.,’ ECB Vice President Vitor Constancio said… ‘The ECB will continue to exert its stabilizing role, so I don’t think there will be significant contagion to Europe.’”
November 21 – Reuters (Abhinav Ramnarayan and Helen Reid): “Euro zone governments are increasingly relying on hedge funds to help them meet their borrowing needs, which risks leaving them vulnerable to a debt market sell-off driven by a class of investors dubbed ‘fast money’ for their speculative approach.
November 24 – CNBC (Silvia Amaro): “The increasing political uncertainty across advanced economies is risking the stability of the euro zone, the region’s central bank warned in a new biannual report… The uncertainty surrounding upcoming key referendums and elections across the 19-member euro zone bloc, along with expected policy changes in the U.S. raise inflation and growth challenges for euro area countries, the European Central Bank (ECB) said. Such uncertainty could lead to a global asset market corrections, it stated. ‘The financial stability implications for the euro area stemming from changes in U.S. economic policies are highly uncertain at this point in time,’ the bank said.”
Les débuts de l’effet Trump: moindre aisance financière hors des USA
November 21 – Wall Street Journal (Rachel Rosenthal and Carol Chan): “Asian companies are starting to feel the ‘Trump effect,’ as a rise in global borrowing costs forces them to reconsider their debt-raising plans. Corporate-bond issuance in Asia has already slowed since the U.S. election, with companies from China to India pulling or postponing planned deals.
The sudden stalling in debt markets could threaten a model of growth that has taken root in Asia in recent years. Firms across the region have taken advantage of low global interest rates to pile up trillions of dollars worth of debt, often denominated in greenbacks… Asian companies have already raised $1.1 trillion in bonds so far this year, compared with $260.8 billion for all of 2008, according to Dealogic.”
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