Category Archives: Adolfo Laurenti

Yuan Devaluation: Nod to Markets or Currency Manipulation?

Last week the Chinese central bank, the People’s Bank of China (PBOC), announced a change in its exchange rate-setting mechanism that resulted in a de facto devaluation of the yuan, which dropped by more than 4% by the end of the week. The decision was widely interpreted as a deliberate attempt to weaken the currency, [...]

Solid Gains in Retail Sales Reveal a More Confident U.S. Consumer

The U.S. consumer entered the third quarter with some momentum, according to the latest report on retail sales. Total sales rose 0.6% in July over June, and are up 2.4% over one year ago. The revision to June, whose reading was originally in negative territory, was to the upside

“The More Things Change, the More They Stay the Same”

As demanded by the European Union, Greece is back at the negotiating table. One week after a referendum rejected the creditors’ bailout plan, Greek Prime Minister Alexis Tsipras is offering to his European partners his own plan to deal with the crisis, in a last ditch effort to stave off the collapse of the economy

It is All Greek to Me

The Greek referendum, expected to be a close affair, delivered a resounding victory to Prime Minister Alexis Tsipras, who gambled his political future on the vote. By giving a large majority to the “no” camp, Greek voters didn’t simply reject the creditors’ proposal (which in any case was not really on the table anymore); they [...]

Five Themes for the Week

Economic Struggles in China and Greece Chinese authorities sprang into action just a few days after announcing a disappointing first quarter GDP growth rate. The People’s Bank of China (PBOC) last night reduced the banks’ reserve requirement by 1% to 18.5% with the intended goal of free, loanable funds in the banking system in order [...]

China Barely Meets Diminished Expectations

The latest report on Chinese GDP raises new concerns about the economic health of the country. The economy grew 7% in the first quarter; conveniently, that is the growth target set by the Chinese authorities for 2015. Unfortunately, it is also the slowest pace since 2009

Energy Cuts Weigh on Industrial Production

Recent weeks have not been kind to economic readings, with a mix of negative reports or failures to meet expectations. Today’s report on industrial production in March is in line with the overall soft trend for the first quarter.

Divide in Eurozone Economies

After I wrote this on Twitter (@AdolfoLaurenti): “Among Eurozone economies, the real divide is between the reformed (Spain) and the unreformed (Italy and France).” I received a question from  @ml8_ml8: “When you say that Spain is “reformed”, Italy and France not, what do you mean by that?” My answer is too involved to reply on [...]

Greece Capitulates to Reality

The temporary “compromise” found between the European Union (EU) and Greece is nothing short of a full capitulation by Athens to economic realities, at least for the time being. On the surface, the can has been kicked down the road for four more months. But it is notable that none of the requests advanced by [...]

A Tale of Two Countries

Developments in the separate crises in Ukraine and Greece are likely to offer some upside lift to financial markets, at least in the short term. My thoughts: • The ceasefire in Eastern Ukraine is a clear positive for financial markets and reduces concerns about geostrategic and military risks