David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Beijing axes coal and steel production curbs as economy slows

    This article by Emily Feng for the Financial Times may be of interest to subscribers. Here is a section:

    However, experts said that even the lower targets were ambitious because last year’s air pollution levels had already dropped significantly. 

    “Both a 3 per cent or 5 per cent reduction from last winter’s PM2.5 levels would be a tough target to reach because levels already fell 25 per cent last winter thanks to very strict policies and very favourable weather conditions,” said Lauri Myllyvirta, a campaigner at Greenpeace, the environmental group. 

    The easing may have been prompted by a public outcry. Winter curbs on coal, including on heaters used by many residents in smaller cities and villages, left millions freezing as local governments scrambled to provide gas heating. 

    By imposing emissions targets rather than specific production cuts, China shifted responsibility to local rather than central officials which could also weaken enforcement. “Notably, policies and enforcement this year is left largely to local governments, leaving them to choose between the risk of missing pollution targets or disrupting the newest construction splurge,” said Mr Myllyvirta.

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    Italy Contagion Fears Bubbling Beneath Surface of Apparent Calm

    This article by John Ainger for Bloomberg may be of interest to subscribers. Here is a section:

    For others, Italy’s euroskeptic government is just the embodiment of the populist sentiment taking root across Europe, which could threaten the bloc’s future and weigh on the euro for the months or even years to come.

    Borghi, head of Italy’s lower house budget committee and a well-known euroskeptic, said in an interview on Radio Anch’io that “Italy, with its own currency, would be able to resolve its problems.”

    “The comments about Italy having its own currency have touched a sore point,” said Jane Foley, head of foreign-exchange strategy at Rabobank International. “While the return of the lira would be almost impossible and hugely inflationary even if it could happen, the fact that the remarks can be read as anti-EMU sentiment are worrisome.”

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    Brazil Coffee Supplies Swell After Ships for Exports Dwindle

    This article by Fabiana Batista for Bloomberg may be of interest to subscribers. Here is a section:

    Brazil’s coffee growers just can’t catch a break.

    In May, a national strike by truckers stranded beans on the farm, and prices last month tumbled to a 12-year low amid a global glut. Now, a dearth of container ships at Brazil’s top ports is stalling exports of a bumper coffee crop.

    For the world’s top exporter, a shift in the global freight market means container ships arrive at ports less frequently, limiting space for less-appealing commodity cargoes including coffee, and warehouses are bulging with bean inventory.

    “Shipments have been postponed for days or weeks,” Nelson Carvalhaes, the president of export group CeCafe in Sao Paulo, said in a telephone interview.

    Luiz Alberto Azevedo Levy Jr., the superintendent director at Minas Gerais-based Dinamo, one of the largest warehouse operators, said, “If shipments won’t flow faster, we’ll see storage issues escalating in the next 30 days” at terminals scattered across the country, he said. “The harvest has been finished, but most of the beans are still being dried and prepared,” leaving a “huge volume” heading for depots in the coming months, he said in a phone interview.

     

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    Trump Lauds Nafta Successor Accord, Chides Tariff 'Babies'

    This article by Shannon Pettypiece and Andrew Mayeda for Bloomberg may be of interest to subscribers. Here is a section:

    The new agreement makes modest revisions to a trade deal Trump once called a “disaster,” easing uncertainty for companies reliant on tariff-free commerce among the three countries. U.S. stocks climbed on Monday toward records, while the Canadian dollar and the Mexican peso gained. The S&P 500 Index climbed 0.6 percent by 12:29 p.m. in New York.

    Trump cited in particular provisions governing automobiles, raising the portion of their content that must originate within the region to 75 percent, from 62.5 percent, and requiring at least 40 percent of a car to come from workers whose pay averages more than $16 per hour. The president called those rules “the most important thing” for him.

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    India Seizes Control of Indebted Lender in Surprise Move

    This article by Saloni Shukla for Bloomberg may be of interest to subscribers. Here is a section:

    India’s government will immediately seize control of a shadow lender whose defaults have caused widespread upheaval at mutual funds, a rebuke that’s only happened to one
    other firm.

    Government officials were granted approval to oust Infrastructure Leasing & Financial Services Ltd.’s board and a new six-member board will meet before Oct. 8, the National Company Law Tribunal said on Monday. India’s richest banker Uday Kotak and ICICI Bank Chairman G.C. Chaturvedi will be part of the proposed board, which will elect a chairperson themselves.

    The nation’s corporate affairs ministry has sought to take control of a company on just two prior occasions, and only followed through once, with Satyam Computer Services Ltd. in
    2009.

    The dramatic move, which unfolded within the span of a hectic day in Mumbai, underscores the government’s concern about IL&FS’s defaults spreading to other lenders in the world’s fastest-growing major economy. Considered systemically important, the group has total debt of $12.6 billion, 61 percent in the form of loans from financial institutions. The ripple effects of its defaults have already seen mutual funds post mark-to-market losses, a slump in corporate bond issuance and a brief but sharp sell-off in equities.

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    Australia's Property Downturn Chalks Up One-Year Anniversary

    This article by Matthew Burgess for Bloomberg may be of interest to subscribers. Here is a section:

    Australia’s property slump has reached the one-year mark as the nation’s two major cities have become the biggest drag.

    National dwelling values dropped 0.5 percent last month, weighed by declines in Sydney and Melbourne, according to CoreLogic Inc. data released Monday. Prices in the two east coast cities, which make up more than half of the national value of housing, have fallen 6.1 percent and 3.4 percent respectively from a year earlier.

    “Sydney and Melbourne are now the primary drag on the national housing market performance,” taking over from regions that were impacted by the mining downturn, CoreLogic’s head of research Tim Lawless said. Values have fallen greatest among the most expensive properties as lenders curb their appetite for high debt to income ratio lending, he said.

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