Americas

Chinese officials in Beijing are growing increasingly unhappy with the government’s policy of offering cheap loans without conditions to troubled Latin American states that might never be able to repay them.

Slowing growth, inflation, and an increasingly fractious relationship with the United States are making China “increasingly wary” of investing in Argentina, analysts have told Emerging Markets.

Bilateral trade deals with Latin America have mushroomed in recent years but there is a growing desire to join two regional trade agreements that could link the continent into the economic powerhouses of South East Asia

The slowdown in economic growth in China is starting to have real impacts on commodity-rich Latin America as weakening demand for construction crimps demand for raw materials

Policymakers in Latin America have been braced for tighter US monetary policy for a couple of years, which has allowed them to cope with the impact of higher borrowing costs. One fly in the ointment for corporate borrowers could be a rise in the dollar against EM currencies.

Emerging Markets can reveal that North Korea was rebuffed by Beijing in its attempt to join the China-led Asian Infrastructure Investment Bank because it was unable to hand over a proper snapshot of the hermit state’s economy and finances

China, keen to see its influence grow in Latin America, will be hoping that Argentina turns out to be a better bet than Venezuela

Toronto Dominion Bank became the fifth borrower this year to issue a dollar covered bond and the second from Canada. The spread it achieved was tighter than previous deals and cheaper than it could have achieved in the euro market.

Canada officially launched its renminbi settlement hub this week, after the country became the first RMB hub in the Americas in November last year.

Euro covered bond issuance could be poised to moderate next week, though it is still likely that one or two deals could emerge at short notice. Issuers outside Europe are less inclined to bring euro benchmarks as a change in the basis swap with dollars has reduced the difference in the cost of funding.

Why not pass legislation for covered bonds in the United States? It is easy to do and there is basically no cost to the Treasury, says Jerry Marlatt senior council at Morrison & Foerster LLP in New York.

The securitization market could offer a financing solution for the energy market in Japan, where the government is pushing rooftop solar panel facilities as an alternative to nuclear power following the closure of nearly all the country’s nuclear plants in the aftermath of the 2011 tsunami and earthquake and the ensuing Fukishima accident.