The Ramifications of Japan's Collective Self-Defense Leglisation

Japan is at a momentous turning point. On 16 July 2015, the government of Shinzo Abe used its big majority in the House of Representatives to override objections from opposition parties and pass legislation permitting collective self-defence (CSD). However, this is one of several misdirected solutions following years of conservative revisionism.

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Investors Await the Bank of England Meeting and the U.S. Employment Report

There are two events this week that will shape the investment climate potentially for the rest of the year.  The first is the Bank of England meeting. The following day is the US employment report.  Both events take on added significance.  The Bank of England enters a new era.  The Monetary Policy Committee meets as usual, but shortly after it, the minutes will be published, and this will contain the vote itself.  There will no longer be a couple week delay. It will be interesting to see if other central banks, including the Federal Reserve and Bank of Japan adopt a similar approach over the medium term.

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Currencies, Technical Indicators and the Future(s)

The unexpectedly record low increase in Q2 US Employment Cost Index unwound the some of the dollar's weekly gains and neutralized the near-term technical outlook.  Next week's non-farm payrolls are still critical, and the weakness may put even greater burden on the jobs data to demonstrate that slack is indeed being absorbed.

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An Emerging Markets Status Update

1) S&P revised Brazil’s BBB- rating from stable to negative, 2) Banco de Mexico announced changes to its FX intervention program, which had been rumored since last week, 3) The Russian central bank has halted its daily USD purchases and slowed its pace of easing, 4) Turkey finally engaged the international community concerning ISIS/ISIL, asking NATO to hold a rare emergency meeting, 5) Turkey’s central bank is considering a move to a simplified monetary policy framework with one policy rate, 6) Bank of America decided to keep EM companies in its Global High Yield Index, 7) The government of India Prime Minister Modi is drafting a bill that is seen as limiting RBI independence, 8) Ukraine’s creditors are starting to accept the notion of debt relief, 9) Malaysian Prime Minister Najib Razak shuffled his cabinet

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Debt is the fatal disease of republics, the first thing and the mightiest to undermine governments and corrupt the people.
Wendell Philips
He who controls the money supply of a nation controls the nation.
James A. Garfield
The moment that government appears at market, the principles of the market will be subverted.
Edmund Burke