The Chinese year of the monkey runs from 08 February this year until 27 January 2017. On the evidence of how the non-Chinese new year has started, we would all be wise to adopt the traits of those born in the year of the monkey who are said to be smart, wily and vigilant.
The geopolitical and economical headwinds of the end of last year have only gathered momentum in the first two months of the Gregorian calendar’s 2016 and we’re advised to batten down the hatches.
There has been a spate of worrying economic stories. The announcement in early February that Yahoo is to cut 15 per cent of its workforce following losses of over US $4 billion came on the same day that Ford confirmed job cuts in the UK and Germany in a bid to save US $ 200 million per annum.
While Yahoo’s situation could be pitched as the inevitable digital shakedown, Ford’s focus is raising alarm bells.
News that the cost to insure Deutsche Bank’s debt had risen by 182 per cent in the previous three months and its immediate share price collapse of 40 per cent in the wake of the announcement followed the Yahoo and Ford bad news day. While Deutsche Bank announced later in the month that it was to buy back US $5.4 billion of its debt saw its share price recover a bit, it has done nothing to silence those bells ahead of the UK banks’ results reporting season which is underway.
Oil continues to occupy the headlines among the cacophony of economic bellwethers. The vocabulary of the current oil crisis is yet to echo the style of the crises of 1973/4 and 1979. In the early 1970s, the crisis saw a rise in the price of oil following OPEC’s embargo on supply to the West and Japan. While in 1979, a panic about the potential for a drop in supply after the Iranian revolution artificially drove up the oil price. Now, the controlled over-supply of oil has seen the price nosedive and the stockmarkets shudder.
While a low price for oil is good for consumers, it’s bad for those states whose sovereign wealth or whose credit worthiness is based on the production and consumption of oil. It is also bad for those financial institutions who have counted on the positions of those nations not being what they are now. It may well end-up bad for consumers should these new positions become entrenched.
On the domestic front, it can only get noisier as a re-negotiated EU agreement does or does not play out with UK voters and businesses ahead of the in/out referendum.
In the property world, many investors and occupiers might well delay their decision-making pending the outcome of the EU referendum. This will have an impact on sentiment and activity the nearer the vote draws.
UK plc will survive whatever the outcome. Thankfully, it will still offer one of the most transparent and sophisticated property markets in the world and, as HSBC’s announcement to retain its HQ in our capital city affirms, London remains a global financial centre, not just a European one.
The geopolitical and economical headwinds of the end of last year have only gathered momentum in the first two months of the Gregorian calendar’s 2016 and we’re advised to batten down the hatches.
There has been a spate of worrying economic stories. The announcement in early February that Yahoo is to cut 15 per cent of its workforce following losses of over US $4 billion came on the same day that Ford confirmed job cuts in the UK and Germany in a bid to save US $ 200 million per annum.
While Yahoo’s situation could be pitched as the inevitable digital shakedown, Ford’s focus is raising alarm bells.
News that the cost to insure Deutsche Bank’s debt had risen by 182 per cent in the previous three months and its immediate share price collapse of 40 per cent in the wake of the announcement followed the Yahoo and Ford bad news day. While Deutsche Bank announced later in the month that it was to buy back US $5.4 billion of its debt saw its share price recover a bit, it has done nothing to silence those bells ahead of the UK banks’ results reporting season which is underway.
Oil continues to occupy the headlines among the cacophony of economic bellwethers. The vocabulary of the current oil crisis is yet to echo the style of the crises of 1973/4 and 1979. In the early 1970s, the crisis saw a rise in the price of oil following OPEC’s embargo on supply to the West and Japan. While in 1979, a panic about the potential for a drop in supply after the Iranian revolution artificially drove up the oil price. Now, the controlled over-supply of oil has seen the price nosedive and the stockmarkets shudder.
While a low price for oil is good for consumers, it’s bad for those states whose sovereign wealth or whose credit worthiness is based on the production and consumption of oil. It is also bad for those financial institutions who have counted on the positions of those nations not being what they are now. It may well end-up bad for consumers should these new positions become entrenched.
On the domestic front, it can only get noisier as a re-negotiated EU agreement does or does not play out with UK voters and businesses ahead of the in/out referendum.
In the property world, many investors and occupiers might well delay their decision-making pending the outcome of the EU referendum. This will have an impact on sentiment and activity the nearer the vote draws.
UK plc will survive whatever the outcome. Thankfully, it will still offer one of the most transparent and sophisticated property markets in the world and, as HSBC’s announcement to retain its HQ in our capital city affirms, London remains a global financial centre, not just a European one.
Will Mooney MRICS
Partner
Commercial, Cambridge
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