Merkel’s “mea culpa” and what comes next

September 20, 2016

merkelblog.jpgTo people (like me) who have gotten used to hearing the same catch-phrases from Angela Merkel in speech after speech, her appearance on Monday was a surprise — perhaps one of the biggest since she became chancellor 11 years ago. Leaders don’t like to admit mistakes. But Merkel not only took responsibility for the poor performance of her CDU in an election in the city-state of Berlin, she also conceded that she would have handled the refugee challenge differently if she could go back in time. She was not apologizing for opening German borders a year ago. That would have been a step too far. But she was admitting that she failed to heed warning signs that a wave of refugees was building and to act early enough to counter or control it. She told her audience that she was ditching her signature phrase “wir schaffen das” (we can do this) because some people viewed it as a provocation. Her body language was different. She read from a prepared speech for nearly 12 minutes. This was a carefully orchestrated mea culpa.

No big change yet to outlook for slow-burn UK Brexit vote pain

September 16, 2016

RTSIWCQContrary to now widely-held belief, the rather poor outlook for the UK economy since the country’s vote to leave the European Union on June 23 has barely changed.

Brazil’s currency outlook may be brighter than politics suggest

September 1, 2016
The rising sun over Copacabana beach is reflected in a window in Rio de Janeiro, Brazil, August 23, 2016. REUTERS/Christian Hartmann - RTX2MO9G

The rising sun over Copacabana beach is reflected in a window in Rio de Janeiro, Brazil, August 23, 2016. REUTERS/Christian Hartmann

UK inflation is about to take off – but by how much?

September 1, 2016

Lurking beneath the surprisingly strong rebound in manufacturing shown by the latest Markit/CIPS PMI, there were clear signs that inflation is about to shoot higher –and perhaps in a big way.

Soon time to tick the U.S. full employment box?

August 31, 2016

An autograph-seeker convinces U.S. Federal Reserve Chair Janet Yellen (C) to sign copies of a picture of herself with U.S. President Barack Obama, after her testimony on the economy before the Joint Economic Committee, on Capitol Hill in Washington May 7, 2014. Yellen said on Wednesday the U.S. economy was still in need of lots of support from the central bank given the "considerable slack" in the labour market, and she cited weakness in the housing sector as a fresh risk. REUTERS/Jonathan Ernst (UNITED STATES - Tags: POLITICS BUSINESS) - RTR3O6L5

Most signs are pointing to another strong set of U.S. jobs data, even if wage inflation still hasn’t picked up in the same way.

Central bankers all off to Jackson Hole but U.S. inflation still going nowhere

August 25, 2016

As central bankers gather at Jackson Hole and every investor waits on the edge of their seat for a clearer signal on the direction and future of Federal Reserve monetary policy, one thing has remained fairly constant.

What happens in Shenzhen…

August 19, 2016

…could one day become Tencent.

tencent

For a full size chart, click here

The Chinese internet giant is at the cusp of becoming the country’s most valuable firm. Its mighty rise has taken its valuation to $250 billion, second only to China Mobile, and well ahead of the large state-owned banks and oil companies that have dominated China’s capital markets for the better part of the past decade. The rise of a Shenzhen-based, private company at the crossroads of internet technology, social media and gaming reflects several changes under way in China.

Are British shoppers brushing off Brexit and splashing the cash?

August 17, 2016

Shoppers cross the road in Oxford Street, in London, Britain August 14, 2016. Photograph taken on August 14, 2016.   REUTERS/Peter Nicholls - RTX2L5JV

British retail sales figures for July could pleasantly surprise economists after data on Wednesday showed the country’s labour market performed much better than expected in the month after the Brexit vote.

Claimant count data may suggest first official cracks in post-Brexit economy

August 16, 2016

People enter a job centre in London August 12, 2009. British unemployment hit its highest rate since 1996 in the three months to June, official figures showed on Wednesday, while the number of people claiming jobless benefit rose broadly as expected in July.  REUTERS/Stephen Hird  (BRITAIN EMPLOYMENT BUSINESS) - RTR26MIB

Since Britain’s historic vote on June 23 to leave the European Union, the economic impact has been limited to private-sector surveys that suggest the UK is either already in a sharp downturn or just headed into a mild recession. Nothing suggest things are the same or better.

“Brexit makes the BoE look more like the ECB”

August 9, 2016

European Central Bank (ECB) president Mario Draghi (L) and Bank of England governor Mark Carney arrive at the Bank of England's Open Forum 2015 conference on financial regulation, in London, Britain November 11, 2015. REUTERS/Suzanne Plunkett - RTS6HCJ

Britain’s vote to leave the European Union on June 23 has already had several unforeseen consequences, as well as ones that were well-telegraphed beforehand and turned out to be surprisingly accurate, like the plunge in the pound.