Tuesday 16th September 2014
slib33
MONDAY SEPTEMBER 15th TICKER: Last week UK equities indices fell with the FTSE 100 down 0.70%. The FTSE 250 was down 1.30%; and the FTSE All-Share was down 0.80%. - London’s IPO market has bounced back in 2014, as the year shapes up to bring in a bumper crop of flotations on the UK main market. New research by Capita Asset Services shows a dramatic uplift in the number of companies making their debut on the London Stock Exchange, with more companies taking to the stage than in any year since the recession - European equity trading venue BATS Chi-X Europe has signed a partnership deal with BX Swiss (BX), Switzerland’s only independent exchange, in which the pair will work together on cross listings for exchange-traded funds and trade reporting - CME has become the third entity to file an application for recognition as a trade repository in Québec, joining DTCC Data Repository and ICE Trade Vault - TheCityUK and the China-Britain Business Council (CBBC) have deepened their engagement in China’s economic reform plans, presenting a new series of expert working papers on the approaches China could take to develop its Free Trade Zone - Paris-based alternative investment firm Silver Time Partners has selected Caceis as the asset servicing partner for its first Luxembourg UCITS “Silver Time LOQ Equity Sicav’ fund which launched at the start of September - Private equity fund managers are not doing enough to appease their institutional backers with regards to the fees they charge, according to new research from Preqin - Societe Generale Securities Services has been mandated by CILOGER, a French real estate asset manager, to provide depositary and regulatory reporting services within the framework of the Alternative Investment Funds Management Directive (AIFMD) - The Financial Industry Regulatory Authority (FINRA) has issued a new Investor Alert called ‘Frontier Funds—Travel With’ Care cautioning investors interested in funds that invest in frontier markets to carefully consider the heightened risks.

Blog

The European Review

By Patrick Artus, chief economist at Natixis

US reindustrialisation poses challenge for eurozone

Tuesday, 22 May 2012 Written by 
US reindustrialisation poses challenge for eurozone A reindustrialisation process has been underway in the U.S. since 2009, linked to the trend in the profitability of industrial companies, wage costs and energy prices. It has already enabled the U.S. to regain market share in global trade, creating an additional problem for the euro zone given it is already faces market share losses to emerging countries and weak domestic demand. The euro-zone economy is therefore likely to be further weakened if it loses more export trade to the U.S. http://www.ftseglobalmarkets.com/

A reindustrialisation process has been underway in the U.S. since 2009, linked to the trend in the profitability of industrial companies, wage costs and energy prices. It has already enabled the U.S. to regain market share in global trade, creating an additional problem for the euro zone given it is already faces market share losses to emerging countries and weak domestic demand. The euro-zone economy is therefore likely to be further weakened if it loses more export trade to the U.S.

Reindustrialisation process under way in the U.S.

The reindustrialisation of the U.S. is evident from the upswing in productive investment and manufacturing employment as well as from the upturn in manufacturing output, which has outpaced the euro zone since the crisis. Yet – for the time being – U.S. reindustrialisation has mainly affected the automotive and capital goods sectors.

Growth of U.S. industry can be ascribed to three factors:

-       rapidly increasing profitability of industrial companies in the U.S.;

-       labour costs in industry, which are lower in the U.S. than in Germany or France;

-       and the low cost of energy thanks to the fall in the price of natural gas, due to shale gas production.

The United States is regaining export market share

The U.S. situation in terms of export market share has been improving since the end of 2008. It appears that the U.S. has increased its market share in global exports largely at the expense of the euro zone and Central European countries (CEEC). Since end-2008, the U.S. trade deficit with the euro zone, Asian emerging countries excluding China, other American countries and Japan has been shrinking, though its trade deficit with China has stopped deteriorating. But in terms of export market share, U.S. improvement seems to match the deterioration in Europe.

An additional problem for the euro zone

The euro zone is already faced with a decline in domestic demand as a result of the restrictive fiscal policies, a decline in real wages due to the rise in unemployment and a loss in market share to emerging countries.

So – any further losses in export market share to the U.S. will therefore come on top of these problems. A depreciation of the euro could obviously correct the euro zone’s loss of competitiveness (in terms of wages and the price of energy). However, even during periods when the euro-zone crisis is acute, the euro still remains overvalued against the dollar

Patrick Artus

A graduate of Ecole Polytechnique, of Ecole Nationale de la Statistique et de l'Adminstration Economique and of Institut d'Etudes Politiques de Paris, Patrick Artus is today the Chief Economist at Natixis. He began his career in 1975 where his work included economic forecasting and modelisation. He then worked at the Economics Department of the OECD (1980), before becoming Head of Research at the ENSAE. Thereafter, Patrick taught seminars on research at Paris Dauphine (1982) and was Professor at a number of Universities (including Dauphine, ENSAE, Centre des Hautes Etudes de l'Armement, Ecole Nationale des Ponts et Chaussées and HEC Lausanne).

Patrick is now Professor of Economics at University Paris I Panthéon-Sorbonne. He combines these responsibilities with his research work at Natixis. Patrick was awarded "Best Economist of the year 1996" by the "Nouvel Economiste", and today is a member of the council of economic advisors to the French Prime Minister. He is also a board member at Total and Ipsos.

Website: cib.natixis.com/research/economic.aspx

Related News

Related Articles

Related Blogs

Tweets by @DataLend

DataLend is a global securities finance market data provider covering 42,000+ unique securities globally with a total on-loan value of more than $1.8 trillion.

What do our tweets mean? See: http://bit.ly/18YlGjP

White Paper

Seeking Optimal ETF Execution in Electronic Markets

Seeking Optimal ETF Execution in Electronic Markets

 
pdf Download PDF View all Whitepapers