The major central banks have placed down their markers and have moved to stage left. There are the late-month high frequency data, which pose some headline risks in the week ahead. The focus for most investors will be on several political developments.
For close to 40 years after 1955, the Liberal Democratic Party (LDP) dominated Japan’s competitive party system. Opposition parties were not able to mount a successful challenge to LDP rule at the national level, but they had an important impact on policy and the political process. Japan had one dominant party but not a one-party system.
In our age of disparity, it may be easy to accept that all time is not equal. Touch a hot surface; time seems to move slowly. Time doing an enjoyable activity goes by lickety-split.
Another inequality of time is inflection points. These are non-linear jumps, breaks in time series or investors’ reaction function–how they respond to news. Is bad fundamental news good for stocks and bonds? Is a stand pat Fed bad for the dollar? Is easing by the BOJ positive or negative for the yen?
The Eurozone finance ministers have accepted the EC’s recommendation that Spain and Portugal not be fined for their fiscal excesses. A few weeks ago, the EU Commissioner for Economic Affairs, Moscovici explained that punitive actions would strengthen anti-EU sentiment. However, that consideration did not prevent the EU from threatening to cut off part of the European Structural and Investment (ESI) funds for next year.
On 31 July, just over 11 million voters in Tokyo will be asked to return to the ballot boxes to vote for a new governor. This will happen just three weeks after the conservative Liberal Democratic Party (LDP) government under Shinzo Abe was returned to power in the upper house.
As uncertainty over Japan’s fiscal stimulus roiled the yen and domestic equities, Prime Minister Abe was forced to announce his fiscal intentions earlier than he initially intended. The JPY27 trillion (~$265 bln) package.
The details are far from clear, which may help explain why the dollar is in the middle of the two yen range (~JPY104.65-JPY106.55). Note the high for the week was set on Monday near JPY106.70. An unspecified part of the spending will be included in fall supplemental budget, which Japan regularly introduces.
Populism has become a defining feature of the political landscape on both sides of the Atlantic. In addition, populists succeed by “instilling fear of various real or imagined dangers.”
The upheaval sweeping through Zimbabwe comes with a new economic and political reality – the informalisation of the country’s economy. In Zimbabwe today, the informal sector is the economy.
Surveying democratic election results around the world, it’s clear the high water mark for globalisation has been met. Free trade, always-questionable economics, is no longer good politics and in many ways has jumped the shark.
Donald Trump has been bashing free trade for much of his campaign. However, in recent weeks he’s taken his anti-trade tirades to a whole new level in lashing out at the Trans-Pacific Partnership (TPP), a deal that was signed by its 12 Asia-Pacific members but has yet to be ratified.
