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Monthly Review - September 2021

11 days ago

QUICK LOOK
The Markets

September

-4.8%

S&P 500

-3.5%

EURO STOXX 50

-0.5%

FTSE 100

-2.4%

CAC 40

-3.6%

DAX 30

-3.5%

BEL 20

-1.3%

FTSE MIB

-0.6%

IBEX 35

3.5%

TOPIX
   
 Source: Bloomberg 30.09.2021
Debt towers topple

Debt towers topple

Evergrande, the giant property developer, became the latest high-profile casualty of China’s government clampdowns. Property speculation sits firmly in the sights of President Xi, in his bid to stamp out extreme wealth for the few and promote ‘common prosperity’ in China. As the world’s most indebted property company, Evergrande faced a crisis as interest payments fell due. Markets were shaken, as the property sector represents as much as 28% of China’s economy. Meanwhile, oversupply remains an issue. Around 90 million apartments stand empty in China, enough to house the entire population of several G7 countries.

Tapering gets closer

Tapering gets closer

Despite the claim from President Christine Lagarde that ‘the lady is not tapering’, the European Central Bank ratcheted down the scale of its monthly bond purchases. It seems the race is on among the major central banks to call time on crisis-era levels of monetary support. Jay Powell, Chair of the US Federal Reserve (Fed), hinted strongly that the long-awaited tapering could be announced at the Fed’s November meeting. And the Bank of England joined the rising number of Fed governors suggesting that interest rates hikes, the so-called ‘lift off’, could come as early as 2022.  

Prices spiral higher

Prices spiral higher

Global food prices have risen 40% in the past 15 months, according to the UN. The greatest impact has been felt in emerging economies, where food is a larger percentage of living costs. Why the jump? It’s a story repeated in many sectors, largely a result of supply chain bottlenecks and soaring transport costs, as economies adjust to post-pandemic reality. In Europe, astronomical fuel price increases caused panic buying and shortages. And a lack of drivers bringing produce to supermarket shelves led the UK’s major turkey supplier to suggest that ‘Christmas is cancelled’.


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