Headlines

Investors are slowly coming to terms with the sheer size of the UK government’s borrowing needs over the next few years and it doesn’t look pretty, Bloomberg News reported. Net gilt supply in the next fiscal year is likely headed for an all-time record, according to bank estimates. For Citigroup Inc. strategists, the increase means the market needs to find twice as much new private cash to absorb it as it has over the last eight years combined.
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Italy's new right-wing government plans to announce some 30 billion euros in new spending on Monday in a budget for next year, mainly focused on curbing the impact of high energy prices while postponing some of its most lavish election promises, Reuters reported. The continued energy crisis, triggered by Russia's invasion of Ukraine, means Prime Minister Giorgia Meloni and her allies will not be able to make good on their more extravagant electoral campaign promises, including swingeing tax cuts. "We won't be able to do everything, all at once.
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The rise of trade barriers against China and other countries over the past year could cost the global economy $1.4 trillion, on top of the severe damage being done by the war in Ukraine, the head of the International Monetary Fund said, Bloomberg News reported. “What I am hoping to see is some reversals in policy blocks towards China and globally,” Kristalina Georgieva told Bloomberg Television’s Stephen Engle in an interview in Bangkok on Saturday. “The world is going to lose 1.5% of gross domestic product just because of division that may split us into two trading blocs.
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Oil tanker tycoons are enjoying a surge in revenue as the sanctions triggered by Russia’s war are redrawing the global trade in crude. And it’s set to last, Bloomberg News reported. The disruption is fairly simple. Europe, for decades the top buyer of Russian oil, is banning purchases from Moscow next month and has already been cutting back. Those cargoes are instead flowing out to Asia. The result is ships sailing thousands of miles further, driving up a vital aspect of demand.
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Pakistan’s Finance Minister Ishaq Dar said the government will fulfill its external debt commitments including the repayment of a sukuk bond that’s due in the first week of December, Bloomberg News reported. “There is no chance of default. Repayment will be done on time,” he said in a televised message on Saturday, adding that arrangements for debt repayments for next year have been done “in principle.” Dar estimated the country’s current account deficit would be at $6 billion at the end of June 2023, half that of an earlier projection.
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Germany's foreign ministry plans to tighten the rules for companies deeply exposed to China, making them disclose more information and possibly conduct stress tests for geopolitical risks, a confidential draft document seen by Reuters said. The proposed measures are part of a new business strategy towards China being drawn up by Chancellor Olaf Scholz's government as it seeks to reduce its dependency on Asia's economic superpower.
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S&P Global Ratings expects South Africa’s government to fulfill its commitments to investors in Eskom Holdings SOC Ltd. as it finalizes a plan to tackle the state-owned utility’s massive debt burden, Bloomberg News reported. Finance Minister Enoch Godongwana said last month the government may shift between one-third and two-thirds of the power company’s debt of about 400 billion rand ($23.2 billion) onto its own balance sheet and attach strict conditions to the relief. Details, including the quantum and terms, of the transfer are expected to be announced in February’s budget.
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The end of the era of cheap money has revived a rare phenomenon in UK real estate: valuations are dropping even as rents rise, Bloomberg News reported. Landlords including Land Securities Group Plc, British Land Co., and Great Portland Estates Plc reported rising rents for their offices, warehouses and even stores this week but it wasn’t enough to prevent them writing down valuations. Its a reflection of the degree to which the sector is being battered by rising interest rates, which have overwhelmed the typical interaction of supply and demand.
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Superdry Plc is seeking to tap investment funds to repay banks on a loan due in January as the cost of living crisis hits consumer spending, Bloomberg News reported. The London-listed clothing company has been sounding out potential new investors to replace an asset-backed facility worth £70 million ($83 million), according to people familiar with the matter, who asked not to be named because the talks are private. The company said that it’s in “positive ongoing discussions with lenders” when contacted by Bloomberg News, reiterating what it said in a quarterly report published last month.

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Latin American governments on Sunday selected Brazilian economist Ilan Goldfajn to lead the region’s largest development bank in the wake of a misconduct probe that led to the firing of the previous president, the Associated Press reported. Governors from the Inter-American Development Bank’s 48 members selected Goldfajn to lead the Washington-based multilateral lender from a slate of five candidates nominated by Argentina, Brazil, Chile, Mexico and Trinidad & Tobago.
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