Posts belonging to Category currencies



US debt default would be like Lehman crash

Raising the debt ceiling

A U.S. debt default would create significant confusion and uncertainty in financial markets and could prove as catastrophic as the failure of Lehman Brothers in 2008, the Organization for Economic Cooperation and Development (OECD) said in a new report.

Lawmakers in the U.S. side-stepped a debt default at the 11th eleventh hour in October and brought an end to prolonged negotiations over raising the debt ceiling. But talks are set to resume in the new year with the debt ceiling extended until February 7 and funding approved until January 15.

“An outright default would have extremely severe effects” the OECD said in the report, released on Tuesday.

http://www.cnbc.com…  Mon.,  12  June 2017

The Pound weakness

It’s ‘time to get bearish’ on the pound again

Deutsche Bank has turned bearish on the pound once again, saying that any possible upside for the currency from next week’s election has already been priced into the market.
Writing on Tuesday, Deutsche Bank strategists Alan Ruskin and George Saravelos used their latest FX Blueprint note to warn investors it is “time to get bearish on GBP again,” after just over one and a half months of a positive outlook on the UK’s currency.

http://www.businessinsider.com…  Wed.,  31  May 2017

Icelandic bitcoin mine

Bitcoin is going nuclear

The digital currency is hitting all-time highs, with a single coin going for more than $2,197. It’s an epic bull run that has accelerated in recent months: Just a year ago, it was sitting at just $443. This is great news for bitcoin miners, the people responsible for creating new bitcoins. Their mining infrastructure is the backbone of bitcoin. Anyone who contributes computing power to help process transactions on the network is rewarded with the chance to “mine” bitcoin.

In plain English, in return for helping keep the network up and running, they have the chance of being given a newly created piece of the digital currency. This payout makes the entire process — with the right equipment — incredibly lucrative. It has helped spawned a huge and surreal industry.

You can mine at home, and many people do. But companies dedicated to mining have also sprung up, some worth tens of millions of dollars. These companies build huge data centres, or mines, that consume vast amounts of power and perform insane computations on the hunt for digital gold.

http://www.businessinsider.com…  Thu.,  25  May 2017

Crypto-Currencies Bubble

A surge in the value of crypto-currencies provokes alarm

IT IS hard to predict when bubbles will pop, in particular when they are nested within each other. It helps to keep this image in mind when considering one of the biggest surges in asset values of recent years: the market value of all the world’s crypto-currencies has trebled since the beginning of the year, and is now worth more than $60bn (see chart).

http://www.economist.com …  Fri.,  19  May 2017

Half of European businesses to reduce their use of UK suppliers

UK/Europe: how to avoid Brexit tariffs

 

  • 32% of UK businesses who use EU suppliers are looking for British replacements
  • Nearly half (46%) of European businesses expect to reduce their use of UK suppliers
  • 36% of UK businesses plan to respond to Brexit by beating down supplier prices
  • The UK’s “weak negotiating position” is seen as the biggest hurdle in trade talks

Businesses either side of the English Channel are preparing contingency plans which could sever supply chains between the UK and EU, according to the Chartered Institute of Procurement & Supply (CIPS).
A survey of 2,111 supply chain managers found that 32% of UK businesses who work with suppliers on the continent are actively looking for alternative suppliers based in the UK as a response to the referendum.
Businesses within the EU are even more advanced in their preparations. Almost half (45%) of EU businesses who work with UK suppliers are in the process of finding local replacements.

http://www.cips.org …  Tue.,  16  May 2017

Pro-European Macron wins a crucial election

Europe stronger with Macron victory

Europe’s political establishment entered 2017 in a state of panic. Britain had voted to leave the European Union six months before and the United States had just elected a president who was hostile to their grand project and the values it stood for. The same forces that had led to Brexit and Donald Trump – popular anger with distant elites, economic inequality and immigration – threatened to hit the continent hard in a year in which Europe’s largest countries were holding elections. The biggest risk of all was France, a country with an ailing economy, historic ambivalence toward the EU and a politician, in National Front leader Marine Le Pen, who seemed well positioned to seize on voter fears.

Instead, on Sunday, Le Pen was soundly defeated by Emmanuel Macron, a 39-year-old independent who ran on an unashamedly pro-European platform. Macron urged the French to embrace rather than reject globalization. And he vowed to work with Germany to relaunch the European Union, a project long seen as a guarantor of peace and prosperity but one which is now struggling to find its “raison d’etre” after years of crisis. Macron’s victory represents a reprieve for Europe and the liberal democratic values for which it has stood for more than half a century.

http://www.reuters.com…  Mon.,  08  May 2017

BREXIT: JPMorgan to move massively staff out of London

Dublin, Frankfurt and Luxembourg, new destinations for bankers

JPMorgan Chase & Co. plans to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg as it prepares for the U.K. to lose easy access to the European Union’s single market after Brexit, the firm’s head of investment banking said.

“We are going to use the three banks we already have in Europe as the anchors for our operations,” Daniel Pinto said in an interview Tuesday in Riyadh, referring to the New York-based firm’s local entities. “We will have to move hundreds of people in the short term to be ready for day one, when negotiations finish, and then we will look at the longer-term numbers.”

http://www.bloomberg.com…  Wed.,  03 May 2017

Banks are now assuming there will be a “hard Brexit”

HSBC Says Companies Already Re-Routing Business

HSBC Holdings Plc said some of its largest clients have already asked for their business to be routed through the bank’s offices in mainland Europe and aren’t waiting to see what Brexit deal the U.K. hammers out with the continent’s trading bloc.

http://www.bloomberg.com…  Fri.,  14 April 2017

The City of London under threat

London will lose  a €930 billion  daily business — after Brexit

London will lose the business of euro clearing — a €930 billion (£792 billion, $995 billion) daily business — after Brexit, says France’s finance minister Michel Sapin.

Sapin said in an interview with the Financial Times that it is not possible for the City to continue the lucrative clearing business after Britain leaves the European Union on March 29, 2019 because it would hurt the EU’s “sovereignty.”

http://www.businessinsider.com…  Mon.,  10 April 2017

Iceland mulls to join Euro

Iceland may peg crown to euro, says finance minister

Iceland is considering pegging its crown to a major currency, most likely the euro, its finance minister said on Saturday, amid concerns the small North Atlantic nation’s economy risks overheating. Nearly a decade after a crash that brought down its banking system, Iceland has bounced back as increasing numbers of tourists flock to its geysers and drink in the trendy bars of the capital Reykjavik.

But worries about overheating have increased. Economic growth was 7.2 percent last year while the crown gained around 15 percent against the dollar. The currency, though volatile, is little changed since then.

http://www.reuters.com…  Tue.,  04 April 2017