Four Types of Market Distress Brexit Will Bring

Alberto Gallo, a portfolio manager and head of macro strategies at Algebris Investments, told that Brexit will bring four types of market distress.

1. The first distress will come from the depreciation of the pound - the pound has dropped from as high as $1.50 just before the vote to exit the European Union to as low as $1.1979.

2. The second market stress is higher inflation, caused by the depreciation of the pound -
Alberto Gallo noted that the U.K. imports around 50% of its food and 70% of its fruits and vegetables, adding that higher prices will force people to squeeze consumption.

3. The third stress will come from the U.K. government needing to increase spending in the wake of Brexit, which will likely increase the cost of funding.

4. The fourth market stress could come from a drop in property prices.

Algebris Gallo has estimated that the U.K. economy could contract by 7.5 percent of gross domestic product (GDP) over the next seven to eight years in the aftermath of Brexit.

Source:
http://www.cnbc.com/2017/03/27/brexit-will-bring-four-types-of-market-distress-portfolio-manager.html

E-commerce Terms You Should Know As A Merchant

If you are new to e-commerce and international trade, or maybe you want to start your e-commerce business/site, this glossary will help you to understand the key terms related to this field:

1. Average Order Value (AOV) - is an e-commerce term used to describe the average dollar amount spent for each online customer order.

2. Address verification service (AVS) - A tool provided by credit card processors and issuing banks to merchants in order to detect suspicious credit card transactions. The Address Verification Service (AVS) checks the billing address submitted by the card user with the cardholder's billing address on record at the issuing bank. This is done as part of the merchant's request for authorization of the credit card transaction.

3. Cart abandonment rate -  an ecommerce term which refers to visitors who add items to their online shopping cart, but exit without completing the purchase.

4. Cross selling - encouraging a customer who buys a product (gasoline, for example) to buy a related or complementary product (engine oil, for example). Cross-selling is generally illegal if there is a tie-in between the two products; where the customer must buy one in order to buy the other.

5. Drop shipping - delivery of goods from a manufacturer or original supplier direct to a buyer, without passing through the warehouse of a distributor or retailer.

6. Partial shipment - providing delivery of a shipment in more than one consignment. Permission must be given by the customer in a letter of credit before partial shipment can be considered acceptable.

7. Point of sale - point at which a sale is made, the ownership (and usually the possession) is transferred from the seller to the buyer, and indirect taxes (such as VAT) become payable. Commonly, a retail outlet.

8. Product relationship - refers to products that are viewed frequently by the same user.

9. Stock keeping unit - is a product and service identification code for a store or product, often portrayed as a machine-readable bar code that helps track the item for inventory. A stock keeping unit (SKU) does not need to be assigned to physical products in inventory.

10. Target market - the group of people a business chooses to communicate with, ideally the people
most likely to buy the products being sold. This market should be narrowly defined by demographic
and psychographic factors.

Sources:
http://www.webopedia.com
http://www.businessdictionary.com
http://thelawdictionary.org
http://www.investopedia.com

A New Global Trade Deal

An international agreement estimated to boost global trade by $1 trillion a year has entered into force. Roberto Azevedo, the Director General of the World Trade Organization, called this agreement "the biggest reform of global trade in a generation".

It is necessary to recall that the Trade Facilitation Agreement (TFA) was finally agreed in 2013, at a meeting in Bali, but could not come into force until 110 countries had ratified it.

The TFA involves streamlining customs procedures, which is considered to have a bigger impact than eliminating all existing taxes (tariffs) on imports. Countries will sign up to a long list of reforms, including easier access for businesses to information, reduced fees and simpler and faster procedures.

According to the WTO economists, the agreement would cut the cost of trading by about 14.3%. They also said that the developing nations would gain the most.

The Trade Facilitation Agreement is one of the few successes of a much wider set of negotiations that were launched in 2001 at the Doha Round.

Source:
http://www.bbc.com/news/business-39049074

15 Countries With the Highest Quality of Life Index

InterNations (the largest global community for people living abroad) surveyed 14,300 expatriates, of 174 nationalities, from 191 countries to rate different aspects of life abroad. The participants were asked questions on the following aspects: Leisure Options, Personal Happiness, Travel and Transport, Health and Well-Being, Safety and Security.

Here is the list of 15 countries with the highest Quality of Life Index (2016):

1. Taiwan - is a newcomer which rose right to the top of the 67 countries

2. Austria - comes in first in the Health & Well-Being subcategory and impresses with its clean air and healthcare.

3. Japan - leads in transport and peacefulness

4. Spain - occupies the second place in leisure options category.

5. Costa Rica - leads in personal happiness.

6. Malta - is on the 1st place in the category leisure options.

7. Czech Republic - is on the 4th place in the travel and transport category.

8. Singapore -  was the winner of the Quality of Life Index in 2015.

9. Germany - comes 7th in the health and well-being category.

10. Switzerland - occupies the 6th position in the safety and security category.

11. South Korea - is raked 7th in the travel and transport category.

12. Canada - comes 4th position in the safety and security category.

13. New Zealand - is raked 6th in the personal happiness category and 8th in safety and security.

14. Portugal - is on the 11th place in the leisure options category.

15. France - comes 8th in the health and well-being category.

Source:
https://www.internations.org/expat-insider/2016/quality-of-life-index

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Inflation Jumps in Eurozone

According to Eurostat, the inflation in Eurozone hit a near 4 year high in January. To be specific, inflation in the euro area jumped to 1.8% last month from 1.1% the month before. One of the causes of the inflation is the jump in energy prices in January compared with the year before.

 

                                        Image source: http://advisoranalyst.com/glablog/2014/09/23/contrarian-view-eurozones-                                                        economy-is-turning-the-corner.html

Eurostat data also revealed that eurozone's GDP growth reached 0.5% in the fourth quarter of 2016, up from 0.4% in the previous quarter.

The same source showed that the euro area's unemployment rate fell to 9.6% in December, which is the lowest rate since May 2009.

Source
http://www.bbc.com/news/business-38807942