Egan-Jones’ Post

European Union is facing backlash after a struggling year in economic growth. Both European Central Bank President Christine Lagarde and ECB member and head of Bundesbank Joachim Nagel expressed their concerns for EU moving forward. With the European Union underperforming and falling behind other countries when it comes to generate new economic growth and manufacturing – the main areas to be affected and see less spending is welfare and defence. 

Top 📰 *The Central Bank of Mexico may continue cutting its interest rate. *On Tuesday, Germany's central bank stated that Germany´s economy is likely to stagnate in 4Q24 as the labor market continues to weaken and potential new trade tariffs loom. *According to a Reuters poll, China is widely expected to leave its benchmark interest rates unchanged on Wednesday, as the Yuan faces renewed pressure with Donald Trump returning to the White House. *On Tuesday, Bank of England officials said that the main concern in gradually reducing interest rates is the potential inflationary impact of tax hikes implemented by the new British government. *Next month, the Bank of Japan will publish its findings on the pros and cons of various unconventional monetary easing tools used in its 25-year battle against deflation, marking another symbolic step toward ending its massive stimulus program. *Oil prices fell on Tuesday, pressured by the restart of production at Norway's Johan Sverdrup oil field, though investor caution over fears of an escalation in the Russia-Ukraine war limited the decline.

What economic challenges will Europe face in 2025? Europe will enter 2025 facing economic sluggishness, US tariff uncertainty, and political instability. •            Economic growth in Europe is expected to remain sluggish, with the European Central Bank recently lowering its 2025 growth forecast to 1.1%. GDP in the euro area is expected to grow by 0.8% this year, an improvement from 0.4% in 2023, but still well below 2022's 3.4% growth rate. Also, the ZEW Indicator of Economic Sentiment fell to its lowest level at -93.1 points. •            President-elect Donald Trump's threats to impose 10% to 20% tariffs on all U.S. imports have created uncertainty among European firms, raising questions about the region's response. According to Citi's European Road Ahead report, a 10% tariff could reduce EU GDP by 0.3% by 2026, with a new U.S.-China trade war potentially doubling the impact on countries like Germany. •            Political instability in key economies like France and Germany will likely impact the region's economic outlook. Former French Prime Minister Michel Barnier was ousted and replaced earlier this month, while German Chancellor Olaf Scholz lost a confidence vote, leading to early elections next year. https://lnkd.in/d4eH7yqs

Macro 🌎 A seismic week in politics and setting the mood for markets over the months to come. We expect Trump 2.0 to be expansionary, mainly through rolling the Tax Cuts and Jobs Act and deregulation. The implementation of tariffs will have some negative impact, to which China looks most vulnerable.   With US growth potentially further strengthened and the Fed easing, we have become more bullish on US equity. Global central bank easing and negative spillovers from US industrial and trade policy support international fixed income, where valuations are attractive. Growth divergence combined with the risk of tariffs helps long US dollar vs. short Europe and China-sensitive currencies. 

#Europe #Market #Brief: Nov 13, 2024 1. **Euro Hits Yearly Low Amid Strong Dollar and U.S. Policy Concerns** The euro falls below $1.06, pressured by expectations of increased U.S. borrowing and inflation under Trump's administration. 2. **ECB Warns of Potential Trade War Impact on European Economy** Bundesbank's Nagel indicates Trump's tariffs could cut Germany's economic output by 1%, raising concerns across Europe. 3. **French Economy Expected to Stall in Q4 Amid U.S. Trade Uncertainty** The French central bank projects economic stagnation as European markets brace for U.S. policy impacts and key economic data releases. Stay updated with the latest #market_insights: join our free #Telegram channel https://lnkd.in/dGbDg5Uh

𝗥𝘂𝘀𝘀𝗶𝗮'𝘀 𝗘𝗰𝗼𝗻𝗼𝗺𝘆 𝗦𝘂𝗿𝗴𝗲𝘀 𝗔𝗺𝗶𝗱 𝗦𝗮𝗻𝗰𝘁𝗶𝗼𝗻𝘀, 𝗕𝘂𝘁 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 𝗟𝗼𝗼𝗺 Russia's economy shows robust growth in early 2024, with the Central Bank maintaining a 16% interest rate to temper inflation. Consumer activity and wage gains fuel the economy's momentum, despite Western sanctions related to the Ukraine conflict. Retail sales and consumer sentiment are up, and the MOEX Russian Index reaches its highest since the invasion of Ukraine. However, the central bank warns of potential risks from sanctions affecting foreign trade and acknowledges the sanctions' impact on Russia's crucial oil industry. With a 3.6% GDP growth in 2023 and an expected 2.6% rise in 2024, Russia's economy is resilient, but the sustainability of this growth, particularly in the face of tightening sanctions, remains uncertain. #finance #news #RussiaEconomy #Sanctions #GlobalTrade Source: Yahoo Finance, https://lnkd.in/gwbSUv4J

Macro 🌎 A seismic week in politics and setting the mood for markets over the months to come. We expect Trump 2.0 to be expansionary, mainly through rolling the Tax Cuts and Jobs Act and deregulation. The implementation of tariffs will have some negative impact, to which China looks most vulnerable. In the macro team, with US growth potentially further strengthened and the Fed easing, we have become more bullish on US equity. Global central bank easing and negative spillovers from US industrial and trade policy support international fixed income, where valuations are attractive. Growth divergence combined with the risk of tariffs helps long US dollar vs. short Europe and China-sensitive currencies. 

Why being short € makes sense: - Germany struggling badly - Trade war risks (US, China, Europe) - Probably more ECB cuts ahead Why € bears need to turn a bit more cautious: - Everyone is short €, short squeeze risks rising.

"Research by the IMF published last year suggests that every 10% rise in the dollar’s value reduces economic output in emerging markets by about 1.9% after six months, and that these effects linger for two and a half years. Higher interest rates in America also make the rest of the world less attractive. Capital flows out of emerging markets, forcing their central banks to raise rates to prop up currencies already weakened by deteriorating trade balances. That reduces lending and investment just when those economies need a boost."

Russia holds rates after Putin urges caution — World — The Guardian Nigeria News – Nigeria and World News https://ift.tt/5TGifJN Russia’s central bank on Friday held interest rates unchanged after President Vladimir Putin cautioned against cutting borrowing costs prematurely. Moscow last year hiked its key interest rate to 16 percent to combat a surge in inflation, as the Russian currency wobbled under the pressure of Western sanctions. The central bank said on Friday it was still too early to start cutting rates, with inflation currently running at an annual rate of 7.8 percent, above the official 4.0-percent target. “Inflationary pressures are gradually easing but remain high,” it said. “Inflation will return to the target somewhat more slowly” than it expected in February, it continued, adding that higher rates would also be required for a longer time. Speaking to business leaders on Thursday, Putin had stressed the need to be “careful” over when to start cutting rates. “The threat of inflation, as the leaders of the central bank say, still hangs over us,” the Kremlin leader told a business forum. Russia has defied initial expectations of economic collapse amid its military offensive in Ukraine. Earlier this month, the International Monetary Fund (IMF) upgraded its forecast for Russia’s economic growth in 2024 to 3.2 percent. A surge in defence spending and redirecting energy exports to the likes of China and India have protected the economy but pushed up prices at home. Putin pointed to the example of Turkey — which has hiked rates to 50 percent to battle a crippling inflation crisis — as a cautionary tale. “If we go the other way, we may have a situation like that in some neighbouring countries, where inflation is double digit… They have crossed some kind of threshold and now cannot deal with it,” he told the forum. Central bank Governor Elvira Nabiullina, a key economic ally of Putin, has been credited with keeping the Russian economy on track through emergency rate hikes and capital controls despite an onslaught of Western sanctions. Source link via POTPOURRINEWS https://ift.tt/FRG7DI2 April 26, 2024 at 12:31PM