Recent Developments in the Global Economy: Key Moves from Trump, BOJ, Croatia, and Russia
New developments are shaping the global economic landscape. JPMorgan (JPM) predicts that Donald Trump's second term could have significant impacts, while interest rates and major merger plans are in focus for Japan and Russia. In Europe, Croatia's credit rating has been upgraded, and salary increases in the UK public sector are drawing attention. Meanwhile, China's stimulus measures have had less impact on the yuan than expected. Additionally, Amazon's (AMZN) investment plans in Italy and UBS's successful blockchain pilot application are also key factors influencing economic dynamics.
Expectations from JP Morgan regarding Trump's second term Stefan Gratzer, Executive Director of JPMorgan Private Bank, noted that the first two years of Donald Trump's second term could be marked by significant policy changes. Trump's focus on taxes, deregulation, and cryptocurrencies may present potential benefits for banks. Gratzer emphasized the notable aspect of Trump's cryptocurrency policies.
Increase in Croatia's credit rating Moody's Ratings has upgraded Croatia's credit rating from Baa2 to A3. Strong economic growth and sustainable fiscal policies were among the primary reasons for this upgrade. The credit rating agency indicated that the country's financial strength is expected to remain high in the near and medium term, alongside other positive developments related to the economy.
Plans to merge oil companies in Russia According to the Wall Street Journal, Russian officials and company executives are discussing plans to consolidate the country’s largest oil companies under a single umbrella. A potential merger could involve Rosneft PJSC acquiring Gazprom Neft and Lukoil PJSC. However, it is still uncertain whether the discussions will reach a conclusion.
Public sector wage increases stand out in the UK In the UK, major wage increases approved by the new Labour Party government for the public sector may outpace those in the private sector. A survey revealed that public sector employers are projecting a median wage increase of 4% for the upcoming year, while the private sector remained at 3%. New agreements are expected to raise the median wage increase to 5%.
BOJ divided over interest rate hike discussions The Bank of Japan (BOJ) policy decision-makers have been divided over interest rate matters. According to the minutes of the October meeting, some members suggested raising interest rates after observing developments in the US economy. Others advocated a cautious approach, stating that the Japanese economy does not require significant monetary support.
China's stimulus plans provide insufficient support for the yuan China's announced stimulus measures falling short of expectations have led to a slight depreciation of the yuan against the dollar. Ken Cheung, a currency strategist at Mishuo Securities Asia, noted that the stimulus plan only met the lower threshold of market expectations and highlighted the Chinese central bank's reluctance to defend the yuan.
Significant investment plan from Amazon in Italy Amazon plans to invest $1.3 billion in a data center in Italy. This investment is seen as a strategic move for Amazon aimed at expanding its operations in Europe.
UBS's blockchain-based payment system pilot application Swiss bank UBS has successfully completed the pilot application of its blockchain-based payment system named UBS Digital Cash. This system aims to enhance the efficiency of cross-border transactions and involves multiple multinational banks and customers. UBS's pilot application included transactions in various currencies such as the dollar, Swiss franc, euro, and yuan.