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Europe & World November 2016

Published: Dec 07, 2016
  • Donald Trump will be America’s 45th President which sent reverberations around the world and caused markets to plummet initially before recovering.  He defeated Hillary Clinton in a stunning victory that saw blue-collar workers vote for Trump in force. 
  • 16th Nov:  the US Dollar hit a 14-year high against the Euro as beliefs grow that inflation would accelerate due the president-elect’s intention of following through on infrastructure spending and tax cuts promises.   Italian and Spanish bond yields rose by 2 basis points to 9 basis points as southern Europe debt suffered a miserable day as investors are concerned at how higher inflation would impact the ECB.
  • Janet Yellen, chairperson of the Federal Reserve has revealed plans to increase rates relatively soon as the economic data available justified such a hike.  She advised that the bank would change its outlook if required as the new administration starts to implement plans for tax cuts and an increase in government spending.
  • The Financial Stability Board released its annual systemic rankings and it revealed that 3 of the US biggest bank’s needed a capital buffer increase of several billions of dollars.  They are Citigroup, Bank of America and Wells Fargo.  Capital buffer requirements were decreased for HSBC, Morgan Stanley and Barclays.
  • The Eurozone area expanded at its largest level in almost a year, led by German growth in manufacturing and services.  The PMI now stands at 54.1 for November compared to October’s 53.3.
  • Germany business sentiment remained unchanged in November standing at 110.4 as businesses remained hopeful about growth.   
  • The European Central Bank released a message warning that they had concerns about the ability of some countries to sustain their debt.  They cited “Higher political uncertainty” as having the potential to impinge on some countries debt sustainability.
  • Mario Draghi, the president of the ECB has warned that Britain will most certainly feel most of the pain following Brexit whilst calling for clarity in the negotiations ongoing to ‘reduce uncertainty’. 
  • China: November 11th is Singles Day (or Bare Sticks Day) in China and was expected to bring in €12bn worth of sales as people celebrated being single by going shopping.  Singles Day is the largest online shopping day in the world with 2015 seeing $14bn spent, four times the amount of Black Friday or Cyber Monday.  At its peak, there were 140,000 transactions per second. 
  • China: Prices of new-build residential properties in Nanjing, Jiangsu province increased 40% YoY in September which was a trend seen throughout many big cities in China.  Nanjing officials have banned developers from borrowing money to buy land in an attempt to curb increasing house prices.  The ban extends to using money from capital markets also, as well as banks and insurers.

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