FT News Briefing Evergrande’s troubles loom over global markets
Sep 21, 2021
Global markets are anxiously eyeing the debt crisis of the Chinese property giant Evergrande, but experts argue it's not a scenario akin to Lehman Brothers. Foreign investors, particularly from China and Japan, are stepping in to stabilize U.S. Treasuries amid Federal Reserve uncertainties. Additionally, Coinbase has scrapped its lending product plans due to SEC pressure. On a lighter note, a collaboration between a Russian firm and a U.S. brewery is resulting in ultra-low carbon beer cans, showcasing innovative sustainability in design.
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Evergrande's Potential Impact
- Evergrande's potential default worries investors, impacting global markets like the S&P 500 and Nasdaq.
- Unlike Lehman Brothers or the Greek crisis, Evergrande's crisis might not severely impact the global banking system.
Indirect Global Market Effects
- Evergrande's default could indirectly affect global markets through reduced commodity demand.
- The Chinese property sector consumes many commodities, and a pullback could impact miners and other companies.
Foreign Investment in US Treasuries
- Despite potential Fed tapering, foreign investors, notably China and Japan, are increasing demand for U.S. Treasuries.
- Higher U.S. yields and growth expectations attract these investors, potentially stabilizing Treasury prices and yields.