Economic Update – IMF Warn of ‘Protectionism’, Doubts Over UK ‘Brexit’ Economy, Le Pen Fears, more…

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Ahead of the IMF and World Bank Spring Meetings this week, as well as the first round of the French election, the IMF have provided details on how they believe the global economy is on the cusp of recovery but warned of the dangers of ‘protectionism‘.

Below is the latest from the IMF as well as other headlines.


Market Watch: IMF warns of dangers of enacting fiscal stimulus as credit cycle worsens

  • There are some $4 trillion worth of companies at risk if U.S. plans for fiscal stimulus are enacted but don’t significantly boost the economy, the International Monetary Fund warned Wednesday.
  • The IMF’s global financial stability report finds improving conditions relative to last year’s issue. But the international agency considered what would happen if the U.S. proceeds in tax reform and deregulation.

CNBC: European banks need more than simple business restructuring, IMF warns

  • The International Monetary Fund warned Wednesday that European banks cannot solely rely on a cyclical recovery to shrug off their problems.
  • A combination of weak profits, lack of access to private capital and large debt burdens could spark further concerns over the stability of the financial industry, the Fund said in its latest Global Financial Stability report.

Bloomberg: IMF Raises Global Forecast While Warning of Protectionism Threat

  • The emergence of protectionist forces could undermine a modest brightening of the global growth outlook and is putting severe strain on the post-World War II economic order, the International Monetary Fund said.

Business Insider: The British economy is ‘no longer shaking off the adverse consequences of the Brexit vote’

  • The economy is “no longer is shaking off the adverse consequences of the Brexit vote,” according to economists at Pantheon Macroeconomics.
  • Britain’s economy has defied economists’ forecasts and proven robust in the months since the June referendum, but Pantheon’s chief UK economist Samuel Tombs says that is now coming to an end…

Value Walk: UBS – Le Pen Victory Could Be 5X Worse Than Greece

  • A Marine Le Pen victory in the French election is unlikely, but due to the potentially devastating fat tail nature of such an outcome, stress testing for extreme model divergences should be a priority, a March 28 UBS Global Macro Strategy report observes…

CNBC: China Q1 GDP growth accelerates at faster than expected 6.9% annual pace

  • China’s economy grew 6.9 percent in the first quarter from a year earlier, slightly faster than expected, supported by a government infrastructure spending spree and a frenzied housing market that is showing signs of overheating.
  • Analysts polled by Reuters had expected the economy to expand 6.8 percent in the first quarter, the same pace as in the fourth quarter of 2016.

Wolf Street: Restaurants in Worst Tailspin since 2009/2010

  • Foot traffic at chain restaurants in March dropped 3.4% from a year ago. Menu prices couldn’t be increased enough to make up for it, and same-store sales fell 1.1%. The least bad region was the Western US, where sales inched up 1.2% year-over-year and traffic fell only 1.7%, according to TDn2K’s Restaurant Industry Snapshot. The worst was the NY-NJ Region, where sales plunged 4.6% and foot traffic 6.3%.
  • This comes after a dismal February, when foot traffic had dropped 5% year-over-year, and same-store sales 3.7%.

The Hill: Boeing to cut hundreds of jobs

  • Boeing says it will lay off “hundreds of engineering employees” in Washington state and other company sites on Friday.
  • “We need to reduce our employment levels further,” John Hamilton, vice president of engineering at Boeing Commercial Airplanes, wrote Monday, according to The Seattle Times.
  • “We anticipate [Friday’s notices] will impact hundreds of engineering employees. Additional reductions in engineering later this year will be driven by our business environment and the amount of voluntary attrition.”
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