Aug 29, 2013 10:46 UTC

The euro’s serene summer may come to an abrupt end

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By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The euro has been a haven of stability during a summer that has seen government bond yields leap, stocks crumble, and emerging markets slide. But the mood is souring. Some investors are so convinced the currency will weaken against the dollar that they are paying hefty premiums to express their bearishness in the options market.

Aug 29, 2013 09:28 UTC

Currency market’s rude wakeup call stirs Indonesia

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

It took a rude wakeup call from the currency market to stir Indonesia’s central bank. At an emergency meeting on Aug. 29, the monetary authority raised its benchmark and overnight deposit rates. It’s a decision Bank Indonesia should have made at its last official gathering less than two weeks ago. An obsession with economic growth stayed its hand.

Aug 28, 2013 14:27 UTC

West faces only high-cost options in Syria

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By Una Galani

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Western powers readying to strike Syria must weigh the price of doing nothing against the likely negative impact from an intervention. The form of the military action will matter, but in this sectarian war, all options are fraught with risks.

Aug 28, 2013 09:41 UTC

China’s consumers aren’t living up to sales pitch

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Consumer brands in China are finding their rewards aren’t quite as advertised. Growth in purchases of a wide range of goods has slowed sharply over the past year, and companies ranging from Samsonite to Apple are reporting disappointing Chinese sales figures. Consumers in the world’s second-largest economy will have their day, but the idea they alone can sustain growth looks threadbare.

Aug 27, 2013 14:03 UTC

Emerging market woes support higher U.S. yields

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By Swaha Pattanaik

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

When there is turmoil in global markets, safe havens, such as U.S. government bonds, typically benefit. But right now, the pattern may be different. In Brazil, India and Indonesia, central banks have intervened to slow their currencies’ slide in the past two weeks. Traders say that other countries are doing the same. These raids on foreign exchange reserves will add to the tailwinds that are driving U.S. Treasury yields higher.

Aug 27, 2013 09:46 UTC

China’s debt molehills could turn into mountains

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The mountains are high, and the shareholders are far away. China’s banks are reporting results that suggest their bad debts are under control and earnings healthy. But where investors don’t easily see them, risks are growing. It’s at the local level that the problems with China’s debt build-up could escalate most rapidly.

Aug 26, 2013 09:15 UTC

Asia sell-off will expose weak corporate defences

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Generals usually fight the last war, not the current one. Investors have a similar mindset. In Asia, a market sell-off has raised concerns about a re-run of the financial calamity of 1997-98. Though most of the region’s economies are in better shape this time, corporate leverage has risen quickly, and it looks like some companies have forgotten the lessons of history.

Aug 23, 2013 10:14 UTC

Germany is not the euro zone – what a shame

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By Viktoria Dendrinou

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The euro zone is doing better, but its latest improvements are worryingly uneven. Germany remains far ahead. This unbalanced recovery could lead to more trouble.

Aug 22, 2013 21:16 UTC

Feature: Nest-flyers are poised to supercharge U.S. economy

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By Dan Indiviglio
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Flying the nest should pay big economic dividends in the United States. As jobs return, the expectation is that droves of 20-somethings will ditch their roommates or vacate Hotel Mom & Dad to get their own places. They may rent more than they buy, but the effects still look profound. Between home building and related activity like furniture sales, Breakingviews reckons new household formation could account for up to a whopping 30 percent of GDP growth through 2019.

Residential construction in large part powered U.S. output during the boom last decade. Ground was broken on the building of over 2 million new homes in 2005. According to the Census Bureau, between 2009 and 2011, so-called housing starts plummeted to an average of just 580,000.

Aug 22, 2013 05:05 UTC

Fed liquidity curbs will act as Asia’s detox plan

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By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Federal Reserve is forcing Asia to kick its addiction to hot money. The prospect of higher U.S. interest rates had made the region’s dwindling trade surpluses look an increasingly dangerous habit. Though markets may be turbulent, pricier local money or cheaper currencies will improve the trade balance for most Asian countries.