Latest Posts

rss

German Ifo institute expects 3% inflation this year, between 2% to 2.5% in 2022

  
Analysis, Economy

Ifo provides some projections on German inflation

That’s relatively modest given that we’re already seeing German annual inflation near 4% in August, with many forecasters seeing a push towards 5% before year-end.
In any case, the high readings for 2022 somewhat reaffirms potential sentiment that inflation pressures may not necessarily ease too much going into next year.
The fact that supply chain disruptions and bottlenecks are to persist well into 2022 makes the case for high inflation to stay the course for many more months to come at least.

China has told banks that Evergrande will not pay interest due on 20 September

  
  Analysis

The latest on the Evergrande situation in China

This has turned into a real calamity and if anything else, the contagion risks are growing bigger by the day. Things are moving quite quickly and fears of any default will heighten risks towards smaller banks and also the property market in general.

Keep an eye on the developments here as they have broader implications for China’s financial sector and in turn, risk sentiment globally as a whole.
It now boils down to a question of whether local authorities are bold enough to stick with making Evergrande an example of its latest shift in mentality or if they are going to bail them out and prevent a chain reaction of unwanted events.

Apple supplier Foxconn’s electric vehicle collaboration with Chinese startup Byton has been put on hold

  
  Analysis

Japan media, Nikkei with the report, saying the Foxconn has pulled back due to Byton’s “worsening financial situation”.

  • Foxconn announced in January it had hooked up with Byton
  • plans were to bring its first EV into mass production by the Q1 2022
Nikkie reports:
  • Multiple people familiar with the matter, however, say that the project was halted after less than six months and that the Taiwanese company has since shifted its focus to other ongoing EV projects, such as a joint venture with Thai oil and gas company PTT.

Suzuki’s factory in Shizuoka, Japan, has shut down in response to a coronavirus outbreak

  
  Analysis

The motor plant halted production on Tuesday and remains offline.

  • In response to cases amongst workers at the factory
  • Suzuki says it has not decided on when to resume production, Friday likely the earliest but unclear.

Suzuki has a number of factories in Shizuoka prefecture. Details are a little light so I am not sure which one has closed, or perhaps more than one?

suzuki

Fitch on Evergrande – say a credit event could result in headwinds ….

  
  Analysis

Chinese property firm Evergrande has been all over the financial news in past weeks as its bonds were trashed.

The concern is, of course, contagion.

Fitch has weighed in, saying that Fitch a “credit event” for the firm would have a broader effect:
  • a default would reinforce credit polarisation among homebuilders
  • could result in headwinds for some smaller banks
Let’s see how this pans out … I’d suggest Chinese authorities would be quick to step in and proper up anything that needs propping up. The death of China has been greatly exaggerated many times.
My 2 cents (it was a dollar, but yeah, Evergrande and all that 😉  )
Go to top