Headlines

Germany’s export-dependent economy is suffering from a Brexit shock that along with the rise in global trade tensions and structural changes in the car industry, threatens to push Europe’s economic powerhouse into recession, the Financial Times reported. In the three months to June, exports to Britain dropped 21 per cent quarter on quarter, the biggest fall since the financial crisis a decade ago, contributing to the 0.1 per cent quarter-on-quarter contraction in GDP that Germany experienced in the same period.

Negative-yielding bonds are taking on an ever-greater chunk of the global fixed income universe and are still failing to lift economic activity, the Financial Times reported in a commentary. But the market continues to call for monetary policy easing from the European Central Bank and the Federal Reserve. It is not clear why central banks continue to acquiesce. In fairness, for the ECB, the requirement for policy action is clear, given that Germany is teetering on the brink of recession.

HNA Group Co.’s cash pile shrank 20 times faster than its debts, indicating that pressure is building for one of China’s most indebted conglomerates to speed up asset sales, Bloomberg News reported. Cash, equivalents and short-term investments as of the end of June tumbled 61% from a year earlier, according to data derived from from the Hainan-based Chinese group’s interim report released on Friday. By comparison, total debt fell 3%.

It was too good a deal to pass up. Starting more than a decade ago, Poles got the chance to take out mortgages denominated in Swiss francs with interest rates less than half the prevailing level for loans in Polish zloty, Bloomberg News reported. More than a million people jumped at the opportunity. Then in 2015, the Swiss unpegged the franc from the euro and it surged in value, just as the zloty was weakening. Some loans doubled in zloty terms, leaving homeowners struggling to pay. Thousands sued, and a European court ruling expected this year could afford them relief.

A funding crisis risks getting worse for Argentina’s government unless it can strike deals with a mix of local, foreign and multilateral creditors who are owed $101bn of debt, the Financial Times reported. Last week Mauricio Macri, the country’s embattled president, announced that the country had postponed payment on $7bn of short-term local debt for up to six months and was seeking a “voluntary reprofiling” of $50bn of longer-term debt, the majority of which is held by foreign investors.

India’s shadow banks are getting increasingly squeezed by a crisis of confidence at home, forcing them to cough up more for funds overseas. And that’s just for the lucky ones, Bloomberg News reported. The non-bank financing companies have struggled to raise as much abroad this year, as defaults in India’s credit market spread after a shock failure by major shadow lender IL&FS Group last year. They’ve signed $1.5 billion of foreign-currency loans so far in 2019, down from $2 billion in the same period last year, according to data compiled by Bloomberg that excludes state-run lenders.

The sell-off in Argentina bonds is so severe that it may soon attract distressed-debt investors betting that there’s money to be made in a restructuring. With overseas notes trading at about 38 cents on the dollar, the vulture funds are probably still a ways from swooping in, Bloomberg News reported. Shops including Morgan Stanley and Merian Global Investors expect buyers with a strong appetite for risk will emerge at about 30 cents.

The shipyard controlled by embattled Indian tycoon Anil Ambani is facing the prospect of bankruptcy after failing to get creditors’ approval for restructuring 70 billion rupees ($970 million) of debt, people familiar with the matter said, Bloomberg News reported. India’s bankruptcy tribunal will consider putting Reliance Naval & Engineering Ltd. in bankruptcy on Wednesday as no new repayment plan was submitted after lenders led by IDBI Bank Ltd. rejected an earlier offer in July, the people said, asking not to be named as the information is not public.

Consumer prices in the eurozone rose by 1 per cent in the year to August, unchanged from a month earlier and well below the level targeted by the European Central Bank, the Financial Times reported. The single currency bloc’s central bank targets a level of below, but close to, 2 per cent. Excluding food, energy, alcohol and tobacco — which tend to have relatively volatile prices — the eurozone’s monthly harmonised prices series rose 0.2 per cent in August, the region’s statistics office said on Friday, in line with analysts’ expectations — up from a 0.6 per cent decline in July.

Mike Ashley’s Sports Direct is funding a legal challenge against Debenhams to drive it out of business and “pick up its assets on the cheap”, it was claimed in the High Court on Monday, the Financial Times reported. Sports Direct, founded by billionaire Mr Ashley, is financing a High Court lawsuit brought by six landlords that are challenging restructuring proposals which the UK retailer’s creditors overwhelmingly approved in May after Debenhams was bought out of administration by its lenders.