Headlines

Italian Prime Minister Mario Draghi played down concerns that widening government bond spreads may put the improvement of the country’s finances at risk, Reuters reported. “Spread rose for almost every country,” Draghi said at a press conference Friday in Rome, adding that sustained growth and budget discipline are key to keeping finances in check. Yields on Italian bonds rose sharply this week after the European Central Bank signaled mounting inflation concerns and a potential acceleration in dialing back monetary stimulus.

The International Monetary Fund said on Friday it would remain "closely engaged" with Lebanon's authorities to help the crisis-ravaged country formulate an economic reform programme, Reuters reported. Lebanon's financial system unravelled in late 2019 under the weight of huge public debts, slicing more than 90% off the local currency's value and plunging a majority of the population into poverty.

A judge on Friday ordered protesters at the Ambassador Bridge over the U.S.-Canadian border to end the 5-day-old blockade that has disrupted the flow of goods between the two countries and forced the auto industry on both sides to roll back production, the Associated Press reported.

Peru's economy is expected to have stayed above pre-pandemic levels in December and January, due to the recovery of internal demand and a record in exports, despite lower mining output after recurring social conflicts, the central bank said Friday, Reuters reported. "The economy is recovering, the output gap is closing, but it would still be below its potential," said Adrián Armas, manager of economic studies at the Central Bank, citing the bank's December and January advance indicator reports.

Economic activity in Brazil rose 4.5% in 2021, a central bank index showed on Friday, rebounding from a record downturn the year before, when the coronavirus pandemic ravaged Latin America's largest economy, Reuters reported. The IBC-BR economic activity index, a leading indicator of gross domestic product (GDP), grew a seasonally adjusted 0.33% in December from November, and rose 1.3% from December 2020. Brazil's GDP shrank 3.9% in 2020, its worst year on record. The Economy Ministry has estimated GDP growth of 5.1% in 2021, while the central bank has forecast 4.4% growth.

Chile’s central bank head Rosanna Costa ruled out an emergency meeting to address the high January inflation numbers and warned of higher interest rates at the next policy meeting in March, according to La Tercera, Bloomberg News reported.

Mexican payroll and business lender Credito Real SA B de CV said its planned refinancing of a 170 million Swiss franc bond, worth $184 million, hadn’t materialized, pointing to a possible nonpayment and restructuring ahead for the embattled shadow bank, WSJ Pro Bankruptcy reported. Credito Real has until the end of Wednesday to repay or refinance the outstanding bond, or could be deemed in default. Failure to pay would likely trigger a cross-default on other debt obligations, including the company’s dollar-denominated bonds.

The International Monetary Fund said on Thursday it is hoping that G20 finance leaders next week can advance proposals to strengthen a debt restructuring framework for poor countries as default risks rise and demands for easier debt terms increase, Reuters reported. IMF spokesman Gerry Rice told reporters that the Fund will seek support for IMF proposals to strengthen the G20's debt restructuring framework, which so far has attracted only three participants -- Chad, Zambia and Ethiopia.

Inflation in countries using the euro, which has soared to record heights in recent months, is expected to peak in the first quarter of this year, the European Commission said on Thursday, as consumers feel the bite of higher energy prices and rising costs of key goods, the New York Times reported. Inflation in the euro area for the January-to-March period will reach 4.8 percent, up from 4.6 percent in the fourth quarter of last year, which was a record since the bloc started measuring inflation collectively in 1997, the commission said in its quarterly economic forecast.

Australia concluded its quantitative easing program, leaving the Reserve Bank with more than 40% of government bonds on issue and raising questions about what it will do with the pile of assets, Bloomberg News reported. The RBA on Thursday conducted its final A$1.6 billion purchase of securities under a program that tripled its balance sheet to about A$650 billion ($465 billion). Indeed in 2021 it bought more than three times more debt than the government issued, the largest ratio across the world’s six largest developed bond markets.