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Weekly Insight: Too frothy?

Equity valuations soared in 2019, as loose financial conditions drove price/earnings ratios higher; By sector, tech and consumer discretionary have seen the biggest valuation gains, health care, banks and utilities have lagged; Early U.S. bank earnings have largely beat expectations, with particular strength in trading revenues, upbeat guidance; Global debt hits record of 322% of GDP in Q319; refinancing this year will top $19 trillion across mature and EMs; Electric vehicle sales growing rapidly alongside declining input costs; market share seen rising to 30% by 2030

GMV: How Much Labor Market Slack Remains?

The US unemployment rate has fallen to historically low levels, ... even as there is little indication that underlying inflation is picking up. ...

Macro Notes: Growth Fails to Drive Income Convergence in SSA

Sub-Saharan Africa continues to display stronger growth than other EMs. However, this has not resulted in meaningful real convergence for most. Continued high, though declining, population growth is partly responsible. Higher productivity growth is necessary to improve living standards quicker. Rising indebtedness represents the key risk to the medium-term outlook.

China Views: Performance of Private Companies vs. SOEs 

China’s SOEs are often criticized for being inefficient and highly leveraged, but the performance gap between SOEs and privately-owned companies is smaller than many think. SOEs gained advantages during the Supply-side Reform, while private companies have lost more to the trade war. 

Economic Views: Risk of Social Tensions in EM

Social and political stress afflicted EM last year, … absent macroeconomic vulnerability in some cases. We introduce scores of social stres...

Iran: Sanctions continue to batter the economy 

U.S. sanctions have almost wiped out Iran’s ability to sell crude oil, pushing the economy into recession for a second year and spurring the authorities to increase taxes and cut subsidies. While they are reluctant to renegotiate the nuclear deal, the country's medium-term potential is considerable.

IIF Response to BCBS Open Banking Report 

On January 13, the IIF responded to the Basel Committee’s recent report on open banking and application programming interfaces. 

January 2020 Global Debt Monitor: Sustainability Matters

The global debt-to-GDP ratio hit a new all-time high of over 322% in Q3 2019, with total debt reaching close to $253 trillion. Global debt is set to grow faster in 2020 and is estimated to exceed $257 trillion by the end of Q1 2020, driven mainly by non-financial sector debt. 

Weekly Insight: Liquidity trumps geopolitics

Amid easier financial conditions and ample liquidity, rising geopolitical tensions leave markets unfazed; With reliance on debt financing on the rise, the global bond universe is fast approaching $120 trillion; Cheap debt and subdued post-crisis equity returns in many markets weigh on IPO activity; Plummeting SOFR-linked issuance in Q4 2019 highlights concerns over transition away from USD LIBOR; China to launch national carbon emissions trading scheme in 2020

GMV: The EM Secular Stagnation Problem

Our last piece of 2019 introduced the idea of “secular stagnation” in EM, ... whereby growth is down sharply in recent years, driven by ...
 

 

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