Commercial Awareness Notes
Commercial Awareness Notes
Commercial Awareness Notes
20/09/2016
Sterling regained some value after dropping following the Brexit result
as the consequences and markets seem to be performing fine.
However, with consequences of Brexit creeping up again and
negotiations taking place rapidly, uncertainty has risen amongst
investors which has caused the value of the pound to fall again to a 5week low. The pound has fallen against the US dollar and the Euro.
Chinas debt has grown to alarming levels, according to new data from the
Bank for International Settlements that highlight a big potential risk to the
global economy. The countrys credit gap is now three times higher than
the typical danger level, the research shows. The BIS rates a reading above
10 per cent as cause for concern; Chinas gap hit 30.1 per cent in March.
Virtually every other economy in history that has seen that rapid an increase
has subsequently experienced a financial crisis.
Demand for emerging market exports has hit a new post-crisis low, with
US imports from China dropping sharply in July in the latest sign
that the engine of growth for the worlds developing economies is
sputtering. The US has been one of the bright spots in an otherwise
gloomy global economy and one of the few sources of growth for
emerging market exporters, which last year saw exports of goods and
services fall for the first time since the global financial crisis, according
to figures from the UN. Data from the US Federal Reserve show that US
merchandise imports from China, the vast majority of which are
manufactured goods, have been contracting in value terms since March
and in volume terms since April.
Oil prices rose on Monday after Venezuela said OPEC countries and
those outside the producers group were close to reaching a deal to
stabilise global output. Venezuelan President Nicols Maduro said on
Sunday an agreement could be announced as early as this month,
sending Brent crude, the global benchmark, up $1 to $46.77 a barrel in
late afternoon London trading.
21/09/2016
Russia will not start printing money to support economic growth and will
not allow populism to dictate the budget, Prime Minister Dmitry
Medvedev wrote in an article published on Thursday.
22/09/2016
Firstly, the vote to leave seems to have made no difference at all. After
an initial panic, equity markets are now higher than on the eve of the
referendum.
Secondly, the pound has fallen sharply since the referendum. This is a
big benefit to multinational companies that will receive a boost when
they translate their overseas earnings back into sterling. This is just
arithmetic, but it is powerful enough to drive positive earnings revisions
across the market for the first time in years.
The Federal Reserve opted to hold its key short-term interest rate
steady on Wednesday. Asia-based traders welcomed the news, as a rate
rise would have pulled money out of emerging markets.
The latest threat to Chinas ability to source minerals comes from the
Philippines, the worlds top supplier of nickel ore.
Gold prices rose to a two-week high Thursday after the Federal Reserve
left interest rates unchanged at its latest policy meeting.
24/09/2016
Chinas reform is one of the most complicated in the world given its
massive economic scale and huge population. Its leaders are walking a
tightrope trying to strike a balance between social stability and
effective restructuring.
25/09/2016