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Tag Archives: G7

US Yields Stabilize After Falling to Three-Month Lows

Overview: The 10-year US Treasury yield steadied after reaching a three-month low near 1.43%, despite the US CPI rising more than expected to 5% year-over-year.  On the week, the decline of around a dozen basis points would be the largest in a year.  Australia, New Zealand, and Italy benchmark yields have seen a bigger decline this week.  The S&P 500 see new record highs yesterday, but the spillover effect has been muted.  Japanese and Chinese stocks eased today, though most other...

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US and Canada Report on Jobs as G7 Fin Mins Talk Taxes

Overview: Stronger than expected US employment data, ahead of today's monthly report and compromise proposal on corporate tax by the White House to help secure a deal on infrastructure sent US bond yields and the dollar high. Late dollar shorts were forced to cover.  The greenback is mixed now, with the yen, sterling, and Antipodeans slightly firmer. The Norwegian krone, Canadian dollar, and euro are still heavy.  The dollar is rising against most emerging market currencies, though, of note,...

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Four Drivers in the Week Ahead

After the US and UK holidays on Monday, there are four highlights in the week ahead. First, the Reserve Bank of Australia's meeting will receive more attention after the Reserve Bank of New Zealand signaled the likelihood of a rate hike in the second half of next year. Second, the G7 finance ministers may agree to endorse a proposal for a minimum corporate tax rate of 15% and an additional tax on the largest 100 companies (so that areas in which they sell can collect taxes).  Central banks...

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Post-Holiday Blues in China While UK Sends Navy Vessels to Deter French Fishermen Blockade of Jersey

Overview: China returned from its extended May Day holiday to find fresh confrontation over its domestic and international actions.  Its equity market fell even though most of the other large Asia Pacific bourses moved higher.  European markets are heavier after the Dow Jones Stoxx 600 posted its biggest gain (1.8%) in nearly two months yesterday.  US futures are firmer, including the NASDAQ, which fell for the fourth consecutive session yesterday, its longest slide since last October.  The...

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Monday Blues: Fed Moves Bigly and Stocks Slump

Overview: The Federal Reserve and central banks in the Asia Pacific region acted forcefully, but were unable to ease the consternation of investors. The Reserve Bank of New Zealand cut key rates by 75 bp. The Bank of Japan appears to have doubled its ETF purchase target to JPY12 trillion, and the Reserve Bank of Australia is preparing for new measures that will be announced Thursday. The Fed returned to the zero-bound, resumes long-term asset purchases, and took other measures to boost...

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Multilateralism has been Fractured: G7 may act in Concert, but Little Scope for Coordination

Overview: The Fed rate cut that many had expected before the US equity markets opened yesterday failed to materialize, but the focus shifted to a possible coordinated G7 action as early as today. A conference call with the G7 finance ministers and central bankers, led by this year's G7 head, US Treasury Secretary Mnuchin, is slated to begin, according to a Reuters report at 7:00 am ET today. France's Finance minister Le Maire told Reuters that there will be coordinated action, The S&P...

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G7 to Deliver a Nothing Burger

A Bloomberg article about the weekend G7 meeting says, "multilateralism is dead."  An op-ed in the Financial Times suggests that the most important political alliance may be "rejuvenated" at the G7 meeting.  The truth is likely found somewhere in between.  Economic nationalism, personalities of (some of) the leaders are not conducive to deepening or broadening cooperation among the leading market economies.  At the same time, the G7 is an expression of multilateralism at its best, but...

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13/7/19: BRICS and G7

As a side note: the BRICS now have a bigger share of the world economy than the Euro area and the U.S. combined: In 2019, BRICS combined GDP will surpass (using PPP-adjusted GDP) that of G7 economies, and in 2020, based on IMF forecasts, it will exceed the combined share of the world GDP for the US + EU27 economies.Not a single BRICS economy is currently represented in G7. Dire...

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Quote of the Day: G7 Rants

Trump gave “a long, frank rant”, the official said, repeating a position he carried through the 2016 U.S. election campaign into the White House that the United States had suffered at the hands of its trading partners, with French President Emmanuel Macron pushing back on the assertion and Japanese Prime Minister Shinzo Abe chiming in. It was a “a long litany of recriminations, somewhat bitter reports that the United States was treated unfairly,” said the French official, who spoke on...

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