Biodun.BBC: France24 Financial News

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Friday, June 28, 2019

ANALYSIS AND BREAKING: France sinks deeper into debt

Date created : 28/06/2019 - 13:16 GMT/ZULU

Macron has turned out to be quite the spender AFP

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Paris

by Natalie de Vallieres and Biodun Iginla, France24 Financial Analysts

France's has slipped further into the red, the national statistics bureau said on Friday, only days after the country's public auditor warned of "worrying" debt levels.

Public debt rose to 99.6 percent of gross domestic product in the first quarter of the year, the Insee bureau said, widening the gulf between the eurozone's 60 percent of GDP debt limit and the French reality.

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France is now 43.6 billion euros ($49.6 billion) deeper in hock than at the end of 2018, when the debt to GDP ratio stood at 98.4 percent.

President Emmanual Macron's government is targeting a ratio of 98.9 percent for the end of this year.

Insee said the rise in the public sector debt was mostly due to central government spending, with local authorities and the social security system adding much less to the debt mountain.

On Tuesday, France's public auditor warned that the country's debt level was "worrying" and urged the government to control spending.

France has been bucking the downward debt trend seen in most other eurozone countries after Macron loosened the country's purse strings to try end months of often violent "yellow vest" protests.

In a report, the Cour des Comptes said the growing divergence between France and its neighbours on debt reduction "could lead to a deterioration of the perceived quality of France's debt among investors".

It chided the government over its failure to take advantage of a spell of growth to significantly rein in overspending, which leads to increased borrowing every year.

The International Monetary Fund also warned last month that France's debt was "too high for comfort" and called on the government to cut spending.

Neighbour Italy is in the crosshairs of the EU Commission which has put Rome on notice about its snowballing debt, as well as its deteriorating deficit position, reopening a political battle with Rome.

Italy's debt ratio is, at 132 percent of GDP, much higher than that of France and the second-biggest in the eurozone after Greece.

Germany, the eurozone's biggest economy ahead of France, had a ratio of just over 60 percent at the end of last year.

Monday, February 25, 2019

ANALYSIS: Asia markets rally as Trump delays China tariffs

Date created : 25/02/2019 - 10:51 GMT/ZULU

Markets have rallied after Donald Trump hailed progress in the China-US trade talks and delayed a March 1 deadline for ramping up tariffs on imports AFP

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Hong Kong

by Xian Wang and Biodun Iginla, France24 Financial Analysts

Shanghai led a rally across Asian markets Monday after Donald Trump said he would delay a hike in tariffs on Chinese goods citing "substantial progress" in trade talks and fuelling hopes of an end to their long-running stand-off.

Optimism over the negotiations had already provided support to global equities, spurring a rally in January and February, but the president's comments gave extra ammunition to investors to ramp up the buying.

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The news also fired currency markets with the yuan extending gains to a seven-month high, while other high-yielding, riskier units were also up against the dollar.

Trump said on Twitter that the US "has made substantial progress in our trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, currency, and many other issues".

He added: "As a result of these very productive talks, I will be delaying the US increase in tariffs now scheduled for March 1."

The president also said he planned to hold a summit with his Chinese counterpart Xi Jinping at his Mar-a-Lago estate in Florida to sign a deal.

China's Xinhua news agency added that the two sides had "made substantial progress on specific issues" including on transfer of technology, intellectual property and agriculture.

- 'Sigh of relief' -

In morning trade, Shanghai jumped 2.8 percent and Hong Kong added 0.4 percent while Tokyo ended the morning 0.7 percent higher.

Sydney and Singapore each put on 0.1 percent, while Seoul was flat, Taipei added 0.4 percent and Jakarta rose 0.3 percent.

The gains in Asia followed another positive lead from Wall Street, where the Dow enjoyed its ninth straight weekly gain -- the longest streak since May 1995.

"This is a sigh of relief," said Ben Emons, managing director for global macro strategy at Medley Global Advisors. "Markets will still keep a level of caution, but this news is encouraging," he told Bloomberg TV.

The upbeat sentiment lifted high-risk currencies, with the yuan hitting its highest level against the dollar since July, while South Korea's won, the Australian dollar and the Indonesia rupiah were also well up.

Forex traders will be closely watching speeches this week from top Federal Reserve officials -- including chairman Jerome Powell's appearance in front of lawmakers -- hoping for clues about the bank's monetary policy plans.

Wall Street "will be looking for soothing comments about the future size of the balance sheet -- the bigger the better -- and insights into future rate hikes", said Jeffrey Halley, senior market analyst at OANDA.

- Key figures around 0230 GMT -

Tokyo - Nikkei 225: UP 0.7 percent at 21,572.11 (break)

Hong Kong - Hang Seng: UP 0.4 percent at 28,926.21

Shanghai - Composite: UP 2.8 percent at 2,882.51

Euro/dollar: UP at $1.1347 from $1.1332 at 2130 GMT

Pound/dollar: UP at $1.3067 from $1.3053

Dollar/yen: DOWN at 110.73 yen from 110.75

Oil - West Texas Intermediate: UP 15 cents at $57.41

Oil - Brent Crude: UP 19 cents at $67.31 per barrel

New York - Dow: UP 0.7 percent at 26,031.81 (close)

London - FTSE 100: UP 0.2 percent at 7,178.60 (close)

Wednesday, October 10, 2018

Analysis: UK economy grinds to halt in August

10 October 2018 - 20H37

by Emily Straton, Judith Stein, and Biodun Iginla, France24 Financial News Analysts, London

LONDON -

Britain's Brexit-facing economy ground to a shuddering halt in August, hit by weaker hotel and restaurant activity, official data showed Wednesday.

Six months before Britain is due to leave the European Union, gross domestic product (GDP) registeredzero growth, the Office for National Statistics said in a statement.

That followed an upwardly-revised 0.4-percent expansion in July, which was boosted by sunny weather and the World Cup football tournament.

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The ONS added that the 2018 summer heatwave provided a welcome lift to the economy, after it had suffered under unusually cold weather earlier in the year.

The August GDP print however undershot analysts' consensus forecasts for anaemic growth of 0.1 percent.

Meanwhile, the economy grew 0.7 percent in the three months to August compared with the previous three months. That outpaced market expectations of 0.6 percent.

"The economy continued to rebound strongly after a weak spring, with retail, food and drink production and housebuilding all performing particularly well during the hot summer months," said Rob Kent-Smith, ONS head of GDP.

"However, long-term growth continues to lag behind its historical trend."

Howard Archer, chief economic advisor to the EY ITEM Club, forecast that growth would rebound in the third quarter of this year, or three months to September.

However, he cautioned that Brexit uncertainty would likely spark another slowdown towards the end of the year.

"We think there is a very real risk that growth will slow markedly in the fourth quarter due to appreciable Brexit and political uncertainties weighing down on business investment and also limiting client willingness to place major contracts," he noted.

Britain will depart from the European Union at the end of March 2019.