“Credit markets are set for the worst year since the global financial crisis as investors abandon hope of a late rally.
High-yield and investment-grade notes are headed for losses in both euros and dollars — the first time all four asset classes have posted negative total returns since 2008, based on Bloomberg Barclays indexes.”
And not unconnected to that:
“After years of easy monetary policy, the liquidity it provided in global markets — allowing assets to be easily bought and sold — is starting to reduce. The US Federal Reserve is already raising rates and easing back on its bond purchases, and the European Central Bank (ECB) has signaled it plans to follow suit.”
“With another 2% or so decline on Tuesday, U.S. stock indices have given up their gains for the year. The rout that started in tech stocks has moved to oil shares amid worries about global demand… We hope someone at the White House is listening to this trade canary [global trade has been stalling out since the start of the year].”
“United States Vice President Mike Pence’s remarks at the end of this year’s summit season just about blasted the word “cooperation” out of the APEC acronym… the many handshakes, photo ops and positive sounding joint-statements could not mask the reality of hardening US-China geopolitical competition. It is a cruel irony that a group of meetings created to advance cooperation became the platform for what amounted to a very public drawing of lines of great power competition.”
“Shares in China edged lower in choppy trading on Wednesday as a continued selloff on Wall Street and a plunge in oil prices stirred uncertainty over the global economy.”
“South Korea’s household debt passed a new milestone of 1,500 trillion won in the third quarter as debt continues to grow faster than income regardless of some easing from tighter loan regulation. According to data released by the Bank of Korea, the country’s outstanding household credit reached 1,514.4 trillion won ($1.3 trillion) as of the third quarter ended September, up 22 trillion won from the previous quarter.”
“Sri Lanka’s former finance minister Mangala Samaraweera warned of an economic collapse as a political crisis triggered by President Maithripala Sirisena’s controversial appointment of a Prime Minister…
“…left foreign investors shaken and the country was hit by the first credit downgrade.”
“Algeria may face an economic crisis by 2019 in case the Algerian authorities did not undergo immediate economic reforms, after oil revenues have fallen since 2014, according to a report released by the International Crisis Group (ICG) on Monday. According to Agence France-Presse (AFP), the report said that “In the absence of reforms (…) the economic crisis could affect Algeria by 2019, which would fuel the tension surrounding the upcoming presidential elections.””
“Venezuela’s economic crisis has forced citizens living in a renowned national park into a drastic step – illegally mining for gold.
“The country’s indigenous Pemon people, native to the region containing Venezuela’s famous Angel Falls, have now left ecologically driven lives as tour guides in Canaima National Park to mine for fragments of gold.”
“Heavy Canadian crude has been on a downward spiral since mid-May, with prices plummeting by more than 60 per cent as an onslaught of new production from the oil-sands overwhelms the nation’s pipelines. In the past two months, the decline accelerated as many of the U.S. refineries that processed all that oil shut down for maintenance. The result is the worst pricing environment in the Canadian oil industry’s history and a disaster for a sector that accounts for about a 10th of the nation’s economy and a fifth of its exports.”
“Among those risks that have a high chance of materializing next year and that could cause serious global economic damage is an intensification of the Italian sovereign debt crisis.
“This has to be of concern for both the European and global economies considering that Italy is the eurozone’s third-largest economy and is approximately 10-times the size of the Greek economy.
“It is also of concern considering that the Italian government debt market is the world’s third-largest sovereign debt market and that a considerable proportion of the $2.5 trillion of that debt is held by Italian and other European banks.”
“Just eight months into a period of intense political strife, Italy’s debt profile is starting to deteriorate as the country is forced to depend on shorter-dated local bond auctions and small individual savers to raise money… Staggering under a debt ratio of 130 percent of annual economic output and one of the world’s biggest bond issuance programmes, Italy needs its borrowing to be low-cost but also long-maturity.”
“Romania’s small and medium enterprises (SME) didn’t recover following the financial crisis as their employment is still bellow the level reached in 2008 and the number of major deals involving SMEs is negligible… EU-wide developments of SMEs are not evenly reflected in member states. In six member states the 2017 level of SME value added was still below its 2008 level (Croatia, Cyprus, Greece, Italy, Portugal and Spain).”
“Populist parties have more than tripled their support in Europe in the last 20 years, securing enough votes to put their leaders into government posts in 11 countries and challenging the established political order across the continent. The steady growth in support for European populist parties, particularly on the right, is revealed in a groundbreaking analysis of their performance in national elections in 31 European countries over two decades…”
“The price of oil slumped 7 per cent last night to its lowest level in 11 months amid fears of a global economic slowdown. Brent crude sank to little more than $62 a barrel, its lowest level since last December. It has now dropped 28 per cent from the highs hit four months ago.”