Markets under pressure as ‘Trump bump’ falters

Global markets recede as the so-called ‘Trump bump’ runs out of steam Despite share prices climbing sharply on the back of last November’s surprise election victory by Donald Trump, the fabled ‘Trump bump’ appears to be running out of steam as Wall Street signals its disapproval over the president’s failure to secure support for his most prominent pre-election pledge. Trump’s disappointment over his inability to pass the repeal of Obamacare through Congress was mirrored by tumbling US shares, as the market wobbled over the prospect of the administration’s power to deliver on a raft of growth-boosting measures, including a comprehensive package of tax cuts. Read more…

How will Trumponomics impact the US economy in 2017?

How will the new presidency affect the US economy?With the ideological and political differences between the outgoing Obama administration and the incoming Trump regime a million miles apart, it looks as if barely a single policy will remain unaffected in the coming months – from public spending to international relations. So far, the markets have reacted positively to predictions of increased growth fuelled by pronouncements over deregulation, tax reforms and infrastructure spending. But, with Trumponomics set to remain a dominant influence in the coming months, observers will be closely monitoring whether Trump’s deeds match his words and forecasting how his administration will balance higher growth with spiralling inflation without plunging the country into a recession. Read more…

Will President Trump boost the US economy?

Will President Trump boost the US economy?It seems as if the US economy may be set for an unexpected upturn as Trump prepares for presidency. The new Republican administration has pledged to ‘make America great again’ by putting its resources into boosting the economy which, together with expected trade restrictions is almost certain to fuel inflation above the average 2.2% of Obama’s second term. The economy may also get a boost from the deregulation of labour and environmental legislation. If there’s scope for economic expansion, Trump’s policies could kick-start growth and output and productivity could rise sharply, but as the economy approaches full capacity, inflation will soar. Read more…

Brexit and Trump elevate risks to banking sector

Global events including Brexit and Trump win exert pressure on banking sectorRecent political and economic events including Brexit, the US presidential election and China’s economic slowdown have created global uncertainty are creating significant risks for the global banking sector, according to leading ratings agency Standard & Poor. The agency’s global credit outlook for the banking sector in 2017 flags these and other factors as potential hurdles for the banking industry’s creditworthiness over the next twelve months, saying that more than half of the largest global banking systems face negative pressure – especially banks in Latin America and Asia Pacific. Read more…

Sterling at risk of losing reserve currency status

Post-Brexit shocks to sterling have rocked the currency’s reserve currency statusPost-Brexit shocks to sterling have rocked the currency’s reserve currency status

After Britons voted narrowly to exit the European Union earlier this year, they may not have anticipated the effect on the country’s currency and financial reputation. But with sterling reaching its lowest value in 40 years and the country stripped of its Triple-A credit rating, there are also fears that its prized reserve currency status could be under threat, should it fail to secure continued access to the European single market, according to US ratings agency Standard & Poor. Read more…

Post Title: US growth picks up in Q3

Figures show better-than-expected growth figures during Q3 of 2016Figures show better-than-expected growth figures during Q3 of 2016

Recent figures from the Commerce Department show that the pace of US growth up-ticked in the third quarter, reaching its highest rate in two years and offering support to forecasts of greater economic stability. The economy grew at a 2.9 percent annualised rate in the third quarter, topping predictions of just 2.6 percent and reflected a spike in exports as well as an increase in federal spending. However, consumption growth dropped back over the same period to half the rate of the previous quarter. Read more…

Hard Brexit could result in British banking crisis

Head of Germany’s central bank warns that UK could lose its status as the financial centre of EuropeUK could lose its status as the financial centre of Europe

Since the UK’s vote to leave the European Union, there’s been no clear indication of how the British government intends to carry out the political and economic split. Article 50 of the Lisbon Treaty must be invoked before Brexit can begin but with the clock ticking on a two-year negotiation timetable as soon as the process is triggered, the prime minister seems reluctant to push the button too soon. Britain sells almost half of its exports via the single market. A ‘soft’ Brexit would minimise the economic impact on the UK but is unlikely to assuage the concerns of those who voted to reduce immigration. Read more…

Apple hit with tax penalty after EU ruling

Tech giant Apple to pay billions of euro in back taxes after EU rulingTech giant Apple to pay billions of euro in back taxes after EU ruling

Tech leviathan Apple is on the receiving end of Europe’s biggest-ever tax penalty after Brussels handed down a ruling that the company had benefited from what amounted to illegal state aid from Ireland. The judgement follows a lengthy investigation into claims that Dublin gave Apple an uncompetitive advantage in violation of EU law. Apple will be asked to pay billions of euro in back taxes as part of the European Commission’s initiative to combat multinationals’ aggressive tax avoidance strategies. Read more…

IMF encourages global response to stimulate economic growth

The World Economic Outlook study by the IMF spotlights weaknesses in the global economyStudy by IMF spotlights weaknesses in global economy

The International Monetary Fund (IMF) has warned that free trade is being increasingly seen as something that benefits the wealthy and warn that help is needed for people whose job prospects have been damaged by globalisation. In a statement from the organisation’s half-yearly World Economic Outlook study, it spotlights weaknesses in the global economy as being largely responsible for the stalling of trade growth over the past few years. It also acknowledged that anti-trade feelings could harden further, given the current climate. Read more…

US economy feeling the pinch as lines of credit are squeezed

Businesses treading water as banks tighten standards relating to applications for creditBusinesses treading water as banks tighten standards over applications for credit

A survey recently conducted by the Federal Reserve reveals indications that lines of credit are harder to come by, with loans to businesses on commercial and industrial (C&I) and commercial real estate (CRE) facing tougher criteria over the second quarter of 2016 than in the past three quarters. Companies in search of C&I loans for new inventory or relocation are facing tougher credit standards as banks continue to tighten lending, particularly in the case of medium- and large-sized companies. Read more…