GLOBAL MACRO NEWS
US, UK growth revised higher
Already strong US gross domestic product figures were revised higher in the final reading for the third quarter. Originally reported at an annual rate of 3.3%, the economy grew 3.5%, according to an estimate by the US Bureau of Economic Analysis. Q4 growth looks to be somewhat less robust, with estimates in the 2.0% to 2.5% range at the moment. In the United Kingdom, Q3 growth was also revised higher. On a quarter-over-quarter basis, the UK economy expanded 0.6% in the three months following the Brexit vote, up from an earlier 0.5% estimate.
Italy recues world"s oldest bank
Italy’s government has authorized €20 billion bailout of that country’s third-largest lender, Monte dei Paschi di Siena, after the bank failed to raise sufficient capital in the financial markets to stay afloat. Monte dei Paschi has been in operation since 1742.
Scotland threatens to bolt UK
If the United Kingdom does not remain a member of the European Union’s single market, Scotland will hold another referendum on withdrawing from it, Scottish first minister Nicola Sturgeon said this week. Scotland voted to remain within in the EU in last June’s referendum, as did Northern Ireland, but England and Wales produced large enough majorities to win the day for the Leave campaign. In 2014, Scotland held a referendum on independence that was defeated 55% to 45%. The UK government continues to plot its Brexit strategy ahead of triggering Article 50, likely in March.
BOJ upgrades economic outlook
The Bank of Japan upgraded its economic assessment, noting that a moderate recovery trend had continued while exports had picked up. Improved foreign demand was credited with the export boost, along with a weaker yen, which should help solidify the recovery, the bank said. The BOJ’s super-easy monetary policy was left unchanged.
Pair of European banks settle US mortgage cases
Deutsche Bank and Credit Suisse each agreed to settle outstanding cases with the US Department of Justice involving the mis-selling of mortgage-backed securities dating back to the global financial crisis. Deutsche Bank settled for $7.2 billion, roughly half what the DOJ proposed in September. Credit Suisse agreed to pay roughly $5.3 billion. UK-based Barclays was unable to come to an agreement, and the DOJ has since filed suit in the matter.
GLOBAL CORPORATE NEWS
Praxair and Linde agree to merge
After a two-year courtship, industrial gas giants Praxair and Linde have agreed to merge their operations. The combined value of the deal is $66.6 billion.
THE WEEK AHEAD
- Japan releases consumer price and unemployment data on Monday, 26 December
- Japan reports retail sales data on Wednesday, 28 December
- US November pending home sales figures are released on Wednesday, 28 December
Week in Review will not be published on Friday, 30 December.
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