Global stock markets remained under pressure Friday, headed for one of their worst weekly performances in years, with analysts wondering whether to greet the sell-off as a healthy correction or fear even worse to come.
There has been a rising wave of opposition to globalization across the globe. From widespread trade protectionism to slow trade growth and tightened immigration policies, it would seem that the world is facing a backlash against globalization.
Financial historians looking back at 2016 will comment on what did not happen. Politically if not economically it was a wild year and yet most global markets responded with either steady indifference or easy optimism.
The donor-funded World Bank arm responsible for lending to the globe’s poorest countries is preparing to raise billions of dollars in financial markets after being awarded a credit rating for the first time in its 56-year history.
Managers of the world’s $10 trillion or so foreign exchange reserves are in a bind. More and more of the global government bond market shows a negative yield. If held to maturity, such bonds will inflict a certain loss. Those bonds that do offer a positive yield are horribly overvalued by historic standards. If held to maturity, they will show a profit. But the capital value of these so-called safe assets is vulnerable to a spike in yields, which is bad news if central banks need to liquidate them to cope with a currency crisis or fiscal disaster.