The following are some of the news items mentioned in the last few days:

  • Spain and Portugal were hit by massive electricity outgage that lasted several hours. Total power restoration across the country could take weeks. The reason for outage is not known though
  • China said that if American companies restricted or stopped importing oil, gas and coal, they can manage by themselves.
    • China wants US to cancel its tariffs as a starting point for bilateral talks
  • Chinese are buying record levels of oil - 11mn barrels a day, thanks to depressed prices
  • Trump’s first 100 days in the office has created a chaos in US as well as the rest of the world
  • Statistically core inflation is a better predictor of future inflation than the overall inflation says Harvard Prof
    • Central banks are currently being forced to make difficult choices about whether to be more concerned about inflation or unemployment. It would be nice if they could make these choices by looking forward, but that is basically impossible given policy uncertainty. As a result, they have to rely more than ever on the data in the rear-view mirror. In doing so, we would all be better served by focusing on the underlying economic picture. Looking at core GDP is a great way to start.
  • uShares in a swath of companies surged in Tokyo yesterday after a $42bn plan for carmaker Toyota Motor to take private its parts-making subsidiary triggered hopes of a wider overhaul of Japans corporate landscape. Akio Toyoda, grandson of Toyotas founder, is leading the proposal to buy out Toyota Industries, according to people close to the discussions. The proposal has prompted shares to soar in other Toyota Motor subsidiaries and affiliates that investors believe might also come under pressure to change their ownership relationship.
  • The Swiss franc has surged to a decade-high against the dollar, driven by global trade tensions, putting pressure on the Swiss National Bank (SNB) to cut interest rates to zero or below. Policymakers face a dilemma: restrain the franc to protect exports without triggering US retaliation. Short-term bond yields have turned negative, signaling market expectations of rate cuts. Switzerland risks deflation and strained ties with major trading partners like the US and EU. Analysts suggest limited interventions to avoid being labeled a currency manipulator again. Markets expect a rate cut by June, as inflation remains at the low end of targets.