Commentary: Euro will not survive if Italy fails
By Desmond Lachman in Washington
An Italian debt default would trigger a European banking crisis with global economic and financial market ramifications. Italy is the euro area’s third largest economy. If it fails, the single currency cannot survive. It is also too costly for its European partners to save. However, the country’s new populist government is engaging in wishful thinking that somehow the country will grow its way out of its debt...
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WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: In an update to its World Economic Outlook, the IMF revised downwards its global economic growth forecast for 2018 and 2019 on the back of rising trade tensions and a weaker outlook for some key emerging and developing economies. Meanwhile, sings of deteriorating diplomatic relations between the US and China are mounting. Against this background, the JPY retained a firm tone across the board. Elsewhere, USTs resumed trading today...
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WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: In a letter sent to the Italian government late on Friday in response to the release of the Update to the Economic and Financial Document 2018 published one day before, the European Commission expressed concern that the budget deficit targets for 2019-2021 appear to point to a significant deviation from the EU fiscal rules. In other news, 10-yr US yields rose to a fresh seven-year high close to 3.25% on Friday in reaction to non-farm...
Commentary: Proposals for post-programme Greece
By John Mourmouras in Athens
After eight years of hardship, Greece is finally emerging with renewed optimism. Although the international economic environment is relatively volatile at the moment, I have long believed that the Greek case is manageable for an exit from the memorandums of understanding in late August without a precautionary credit line. Policy-makers must focus on conditions for Greece to achieve a sustainable return to capital...
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WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Market focus today is on the US non-farm payrolls report for September, and mostly, on average hourly earnings which are expected to rise by 0.2%mom pushing the annual growth rate to 2.8% from 2.9% in the prior month. Awaiting the key US report, US Treasury bond yields were lower today after US-China trade tensions flared up again following comments by US Vice President Mike Pence accusing China of trying to interfere in the midterm...
Shipowners beat bankers 2-0 in hard-fought game
Dear Football Friends and Business Partners,
Football was the winner in a hard-fought game as Hamburg’s shipowners finally overcame the city’s bankers with two late goals in front of 200 raucous fans at the Adolf-Jäger-Kampfbahn stadium in Hamburg-Altona.
This year’s version of the long-running fixture was certainly not one-way traffic as the bankers put the shipowners, led by Seaborn’s Holger Strack, under early pressure down the right flank....
http://www.allaboutshipping.co.uk/2018/10/05/shipowners-beat-bankers-in-hard-fought-game/
Commentary: End of the ‘flat world’
By David Skilling in Singapore
A few years before the 2008 financial crisis, journalist Tom Friedman captured the zeitgeist with his argument that ‘the world is flat’, that all competitors in the global economy have an equal opportunity to succeed.
But if it was once possible to argue that (Western-led) politics and technology were creating a flat world, today they are combining to create a more lumpy, multipolar system. Developments in North America, Europe...
http://www.allaboutshipping.co.uk/2018/10/05/end-of-the-flat-world-city-lecture-with-james-bullard/
John Faraclas
The BDI (Baltic Dry Index) fell earlier on today 20 points; it was an expected result following yestedays perplexed figures… the Geopolitical and mainly economic chaos and environmental “concerns” all over Planet Ocean will affect everything. John Faraclas’ brief daily recap:
The Capes’ BCI lost 51 points and now stands at 2,148 – still a good level, but… The most volatile of all indices sends alarms around…CAUTION
A bit of good news from the Panamaxes; a good 27 points plus recovery...
http://www.allaboutshipping.co.uk/2018/10/04/falling-bdi1554-thanks-to-the-capes-volatility/
Argentina President Mauricio Macri
Commentary: Argentina and the IMF – Take Two
By Mark Sobel in Washington
Amid a plunging peso and falling confidence in Argentine economic policy, President Mauricio Macri turned to the International Monetary Fund for the second time in three months. His government is working with the Fund to implement a viable programme, owned by Argentina.
With a revised framework at hand, some commentators have advanced criticisms of Argentina and the IMF, which I highlight...
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: Fuelled by strong US macroeconomic data, the 10-yr UST yield rose to a seven-year high of 3.23% in Asian trade on Thursday, marking the steepest daily increase since the US presidential election in November 2016, in what could be considered an overreaction to the data as stop loss orders were triggered across the futures market. In FX markets, the US dollar firmed on robust US data releases and Fed Chair Powell’s optimistic view on...