Alle berichten door Eddy Schekman

Zware verliezen voor aandelen en Chinese yuan

De Amerikaanse markten zullen vandaag duidelijk lager openen. In de premarket: S&P -0,47%, Nasdaq -0,72% en Dow Jones -0,67%. Ook de Chinese yuan heeft het zwaar.

De boosdoener is de verdere escalatie van de handelsoorlog tussen de VS en China. VS-president Trump wil verbieden dat Chinese bedrijven nog mogen investeren in Amerikaanse techcompany’s. Bovendien mag technologie niet langer worden geëxporteerd naar China. De Chinese overheid heeft nog niet gereageerd op dit verhaal in de Wall Street Journaal, maar beleggers zullen er rekening mee moeten houden dat er een moment komt dat China niet langer in Amerikaanse obligaties zal investeren en mogelijk zelfs belangen op de markt gaat dumpen. Dit kan een rentedrukkend effect hebben in de VS. De US Bonds zijn vanmiddag -0,007 op 2,893%.

De escalatie van de handelsbetrekkingen heeft de koersen in Europa onder zware druk gezet. De FTSE 100 en DAX staan op een verlies van meer dan 1,6%. De AEX staat 1,5% in de min.

De Chinese yuan heeft het vandaag zwaar te verduren. De dollar/yuan is +0,52%. De euro/yuan is zelfs 1,13% hoger op 7,6430. Technisch lijkt een nieuwe aanval op de 8,0 mogelijk. Bij een doorbraak kan deze naar de 8,70. Die beweging zal de exportmotor ten goede komen. Afzet zal mogelijk minder naar de VS gaan en meer naar Zuid-Amerika, Afrika en Europa. De centrale bank va China blijft maatregelen neme om bedrijven van voldoende middelen te voorzien.

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The future of economic development depends on adaptation

I recently spoke to several hundred economic development professionals at the IEDC Annual Leadership Summit about where the field of economic development was heading. Our nation is in the midst of an important debate about how to create an economy that benefits more people, and the work of economic developers is at the center of it. While many across the country are stepping up, in my speech, I noted that major political, economic, and social changes will require leaders to adapt further. I then outlined the five principles that defined a new, more inclusive view of economic development.

One such change economic developers must grapple with is the federal political landscape, which has shifted dramatically following the 2016 elections. Though the impacts of policies from the Trump administration and GOP-led Congress on cities remain unclear, two outcomes seem likely. First, there will be fewer dollars flowing to localities. The Trump administration and GOP-led Congress are reportedly considering across-the-board cuts to federal non-discretionary spending, which has declined steadily as a percentage of GDP since the recession and is already approaching 50-year lows. Second, there will be more discretion provided to states and local communities. President Trump has indicated a preference for block grants and devolving power from the federal government, declaring in his inaugural address that “today… we are transferring power from Washington, D.C. and giving it back to you, the people.” Both outcomes would place a greater burden on local actors to create good jobs and close income disparities in their region. In other words, the work of economic developers and their partners at the metropolitan and regional scale has never been more important.

Here are several other disruptive forces that I discussed in my speech.

Globalization has disrupted many communities, trade adjustment assistance concentration in the United States

Globalization’s impacts on local labor markets are not confined to rural areas or the Rust Belt

Recent Brookings research found that 2.2 million workers have received federal trade adjustment assistance since the program’s inception. These workers live in urban, suburban, and rural counties ranging from the Northeast, to Appalachia, to the Great Plains, to the Pacific Northwest. Half of all workers receiving trade adjustment assistance live within the nation’s 100 largest metropolitan areas. Given these realities, economic development leaders across the country must consider strategies to help retrain existing workers or out-of-work adults impacted by global competition.

Digital skills are in increasing demand. Share od U.S. employment by digital score from 2004 to 2014.

As technological advances continue to reshape our economy, the demand for digital skills is on the rise

A forthcoming Brookings report finds that in 2004, 34 percent of U.S. occupations required only low levels of digital proficiency. Ten years later, just 12 percent do. Meanwhile, the share of occupations that required high levels of digital skills more than doubled, from 10 to 22 percent. Technology is changing the nature of work: a recent McKinsey report estimated that 49 percent of time spent on work activities worldwide could be automated using existing technologies. Economic development leaders should assess whether their existing educational and workforce systems are adapting to keep pace with the changing demand for digital skills.

Urbanization has concentrated opportunity in large metropolitan areas, change in number of jobs from 2007 to 2014.

Urbanization has led to disproportionate economic growth in our largest metro areas, including their exurbs

By 2014, the United States surpassed its pre-recession jobs totals by 1.1%. However, job recovery has not been evenly distributed across geographies: the 100 largest metro areas gained a greater share of jobs than the national average, while smaller metros rebounded to (but did not exceed) pre-recession job totals, and rural areas did not fully recover jobs lost during the recession. Within the largest 100 metro areas, jobs were added fastest in the urban core, growing more slowly in older and inner-ring suburbs. These employment trends likely reflect ongoing demographic shifts towards urban centers and metropolitan areas as a whole.

Demographic change in ushering in a more diverse workforce, population composition by age and race in 2010

Rapid shifts in demography are creating a future workforce that is much more diverse than the one currently facing retirement

Hispanics comprise just 5 percent of Americans over the age of 85, but are one-quarter of all Americans under the age of five. Meanwhile, the share of white Americans is declining. Our country’s ability to replace an aging workforce is a competitive advantage that many modernized nations like Italy and Japan would envy – but only if we can ensure that the younger generation has the education and skills they need to participate fully in our society. People of color continue to disproportionately face barriers that limit their potential and life prospects.

The field of regional economic development has been evolving. Yet in this age of accelerations, local public and private sector leaders must adapt faster and embrace a broader definition of economic development that prioritizes quality jobs and better opportunities for people in their communities. Our nation’s economic success depends upon the continued creativity and collaborative spirit of these local leaders.

      

 

 

AGI Markets Monitor: OPEC reaches oil deal, Mozambique defaults, and Nigeria manages its exchange rate

The Africa Growth Initiative (AGI) Markets Monitor aims to provide up-to-date financial market and foreign exchange analysis for Africa watchers with a wide range of economic, business, and financial interests in the continent. Following the 2016 updates, the February 2017 update continues tracking the diverse performances of African financial and foreign exchange markets through the end of 2016. We offer our main findings on key recent events influencing the region’s economies: OPEC’s deal on crude oil output, Mozambique’s bond payment default, and Nigeria’s support of the naira.

Rise in fuel and metal prices boosted commodity prices in 2016

In 2016, commodity prices rose by 38.1 percent, according to the IMF’s all commodity price index data. The main drivers of the index’s growth were increasing fuel and metal prices, which grew by 66.1 percent and 35.8 percent, respectively, over the period. Oil prices generally climbed throughout the year, from $29.92 per barrel in January 2016 to $52.61 per barrel in December 2016. For oil-exporting countries that saw their fiscal balances deteriorate during the price slump in 2014 and 2015 (e.g., Angola, Cameroon, Chad, Gabon, Nigeria, and the Republic of the Congo) the gradual rise in oil prices could provide a modest boost to government revenues as they seek to diversify and acquire more reliable sources of fiscal revenue.

On November 30, 2016, the Organization of Petroleum Exporting Countries (OPEC) reached a deal to cut its members’ crude oil output by 1.2 million barrels per day (mbd) to 32.5 million mbd starting in January 2017 for six months (with the possibility for extension). Nigeria and Libya were exempted from the reductions, while other members of OPEC, specifically Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait, will assume the largest cuts of the group. A meeting on December 10 resulted in additional reductions totaling 0.6 mbd by Saudi Arabia, Russia (a non-OPEC member), and 10 other non-OPEC countries. While this agreement indicates that oil prices could continue to rally in the near term, the degree to which prices will rise (or fall) in 2017 will be affected by compliance by OPEC members, Nigeria and Libya’s production levels, and a potential rise in shale production.

The IMF’s metal price index also increased in 2016—led by base metals iron ore (exported by Liberia, Sierra Leone, and South Africa), copper (exported by the Democratic Republic of the Congo and Zambia), zinc, tin, lead, nickel, and aluminum—due to robust demand from China’s construction industry and expectations of higher demand from the U.S. for infrastructure projects following the 2016 presidential election. Precious metals have also increased throughout 2016, although prices for gold (exported by Burkina Faso, Ghana, Mali, South Africa, and Tanzania) fell following the U.S. presidential election on the expectation of U.S. increased fiscal spending. Agricultural commodities have grown by 7.3 percent in 2016, although gains were not consistent across products and varied over the year. For example, in the first half of 2016, the prices of sugar and pork increased substantially, while barley, oranges, palm oil, and soybeans also made gains. In the second half of the year, however, grains, pork, soybeans, and cocoa experienced major declines in their prices, leading ultimately to the modest gains for agricultural goods in 2016. MM 2017 Figure 1

MM 2017 Figure 2

Low growth and currency depreciations led to African equity market downturns

The MSCI Emerging Markets Index increased by 11.3 percent in dollar terms over the period January to December 2016, while the corresponding African frontier markets index (which excludes South Africa) did not fare as well, declining by 7.4 percent over the year (see Figures 3 and 4). Currency depreciations as well as low economic growth experienced by some of the continent’s major economies contributed to the underperformance of several stock exchanges. The Nigerian and Ghanaian equity indices faced the most significant losses, 37.7 percent and 23.5 percent in dollar terms, respectively, with both countries’ stock exchanges decreasing as the value of their currencies declined against the dollar. South Africa’s equity index, on the other hand, grew in dollar terms by 11.0 percent in 2016 as its currency strengthened against the dollar, and it avoided potential credit rating downgrades during the year. Kenya’s and the West African Economic and Monetary Union’s BRVM equity indices experienced modest declines over the period. Despite Kenya’s relatively high economic growth in 2016, foreign investors’ concerns over the potential for violence surrounding the upcoming August 2017 elections led to the Nairobi Stock Exchange’s decline in 2016.

MM 2017 Figure 3

MM 2017 Figure 4

2016 saw declines for African and global bond spreads

African and global emerging market bond spreads fell by approximately 152 and 81 basis points, respectively, in 2016, suggesting that the perceived relative riskiness of African and global emerging market bonds decreased considerably over the course of the year (see Figure 5). The gap between the two spreads also narrowed. In comparison to the U.S. 10-year Treasury bond rate, the African bond index’s yield was 415 basis points higher at the end of 2016, down from 567 in early January, while the global bond index’s yield was only 365 basis points higher, down from 446 at the beginning of the year. Among a select group of African countries for which bond spread data exists, nearly all experienced a decline in bond spreads during 2016. The exception was Mozambique, which saw its bond spread climb steeply by 799 basis points, reflecting extremely weak market confidence following recent issues regarding the country’s debt (see Figures 6 and 7).

MM 2017 Figure 5

MM 2017 Figure 6

MM 2017 Figure 7

Mozambique’s economic crisis—which was exacerbated by a withdrawal of IMF and other donors’ financing following the revelation of $1.4 billion in secret government loans last year—continues to worsen. In October 2016, the Mozambican government announced that it would not be able to service its external commercial loans. Instead, it would work with creditors to restructure its debt in the hopes of reaching an agreement by the end of the year—although no formal talks were arranged at the time. On January 18, 2017, the government failed to remit a coupon payment of approximately $60 million for its $727 million in eurobonds that it issued in March 2016. Although the government was afforded a 15-day grace period, it still failed to settle the payment. According to Bloomberg, some observers argue that the government strategically defaulted to compel bondholders to negotiate a restructuring of the debt. As a result of the missed payment, Standard & Poor’s (S&P) downgraded Mozambique’s credit rating to “selective default,” (see Table 1). Bondholders argue that they will not enter into formal talks with the government to restructure the debt until it commits to an IMF program and an independent audit of its debt. The IMF has equally called for an investigation into government borrowing before it will provide additional assistance to Mozambique. A report by auditing firm Kroll on the government’s debts is expected to be released in February 2017.

MM 2017 Table 1

South Africa’s rand appreciated as the Egyptian pound tumbled

South Africa’s rand, Zambia’s kwacha, and Somalia’s shilling were Africa’s best-performing currencies in 2016, with spot returns increasing by 13.2 percent, 11.1 percent, and 8.9 percent for the year, respectively (see Figure 8). Despite the rand’s gains in 2016, it experienced some volatility in response to the U.K.’s Brexit vote to leave the European Union, the election of U.S. President Donald Trump, and several sovereign credit rating reviews, as seen in Figure 9. In Zambia, recovering copper prices and monetary policy tightening helped bolster the exchange rate after 2015 saw a massive depreciation in the kwacha. Somalia’s shilling also strengthened against the dollar in 2016 due largely to remittance inflows. The dollarized economy plans to print its own currency in early 2017.

At the same time, spot returns for Mozambique’s new metical, Nigeria’s naira, and Egypt’s pound declined in 2016 by 32.8 percent, 36.8 percent, and 56.8 percent, respectively. The Mozambican metical depreciated by approximately 40 percent against the dollar in the first nine months of 2016 due to market and structural factors, but after monetary policy tightening in October 2016, it appreciated by nearly 8 percent, indicating a potential rebalancing of the foreign exchange market. In Nigeria, the naira fell by almost 40 percent following the end of its peg to the dollar in June 2016, however, observers say the government is still managing the currency at approximately 315 naira per dollar while the black market rate is 493 naira per dollar—approximately 60 percent more than the official rate. Furthermore, the marked devaluation of the Egyptian pound occurred in early November when Egypt’s central bank floated its currency to attract foreign capital and meet the requirements for a $12-billion IMF loan.

MM 2017 Figure 8

MM 2017 Figure 9

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Nico Klene (ABN Amro): Euro/dollar blijft in de buurt van 1,05

De euro/dollar staat onder druk op 1,0524. Nico Klene, senior econoom bij ABN Amro: “De dollarstijging lijkt voorbij. We denken nu dat de dollar enige tijd rond het huidige niveau blijft schommelen en daarna zwakker wordt. In de komende kwartalen blijft de munt waarschijnlijk rond 1,05 bewegen. Wanneer de markt tegen het eind van het jaar gaat incalculeren dat de ECB haar obligatie¬aankopen in 2018 zal verminderen, kan de koers oplopen naar USD 1,10 per euro bij het eind van het jaar. In 2018 zal die beweging waarschijnlijk doorzetten (naar 1,20), vooral doordat de ECB haar beleid minder ruim laat worden.”

Franse rente daalt al weer

Wat is de mogelijke impact van de Franse verkiezingen op de financiële markten?

Simon Bell, portfoliomanager bij LGIM: “Met een referendum over het lidmaatschap van de EU in het hart van haar programma, zal een overwinning van Marine Le Pen een flinke verstoring kunnen zijn voor de markten. Door de sleutelpositie die Frankrijk binnen de EU bekleedt en de Brexit-stem die nog vers in het geheugen zit, zal een grotere kans op een referendum een significante verbreding van Franse spreads betekenen. De spreads op alle Europese staatsobligaties zullen naar verwachting verbreden. Een dergelijk grote uitdaging voor het Euro-project zal met name landen met hoge schulden en zwakke concurrentieposities schaden – Italië ziet er in dit verband zeer kwetsbaar uit. Wij zijn onderwogen in perifere obligaties, met name in Italiaanse.”

Het rendement op 10-jarige Franse staatsleningen is 0,9% tegen eerder 1,15% dit jaar, waarmee de markt een signaal lijkt af te geven dat ze het gevaar van een referendum minder hoog inschat.