Economics

  • Important information for market participants on Black Friday

    OPEC's Meeting Results and Eurozone Inflation Numbers

    Two developments are important for investors to know about before the markets open on Friday to close the month.  

    First, and most importantly, the results of the OPEC meeting are the most negative outcome for prices.  OPEC, which over-produced in October, decided to rollover the existing quota 30 mln barrels a day.  We had noted that the timing of its next meeting would be an important tell.  It did not decide to schedule a meeting in the February-March period, when the seasonal demand slackened.  Instead, the next OPEC meeting is for June.  

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  • The U.S. economic data slate is full ahead of the Thanksgiving holiday

    U.S. Holiday Means Economic News Today, Then Focus Shifts Overseas

    The capital markets are mostly quiet, amid a light news stream, and ahead of three key events in the coming days, with U.S. markets closed tomorrow and light participation expected on Friday.  These events are tomorrow's OPEC meeting, the flash euro area inflation reading on Friday, and month-end portfolio and hedge adjustments.  

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  • China's global leadership aspirations come into focus

    China Aims High

    This geopolitical summit season has consolidated ongoing trends in international affairs. A still-rising China with global leadership aspirations, a resurgent Russia bent on restoring its superpower status, and sclerosis and dysfunction in Western countries is likely to dominate international politics for at least the next 20 years. In fact, we might only be at the beginning in this long time span where seismic global power shifts are taking place.

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  • Japan’s snap election has been called unnecessary

    Japan's Election - Policy or Politics?

    Prime Minister Abe is subjecting his ruling coalition — and his nation — to an unnecessary election on 14 December 2014. Abe claims his decision is all about policy, but in reality it is all about politics. His stated rationale for calling the election is the need to secure voters’ endorsement of his administration’s decision to postpone the consumption tax rise to 10 per cent until April 2017. But his real reasons are based on cold calculations of political self-interest.

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  • Euro steady while the dollar stays strong

    Holiday-Shortened Week in U.S. not Short on News

    The US dollar has begun the holiday-shortened week on a firm note, but the stronger than expected German IFO report helped steady the euro near $1.2400.  Although the Japanese markets closed earlier today, the dollar rebounded toward JPY118.40, as participants recognize official jawboning was more about the pace of the yen's decline than the level.  

    The German flash PMI was disappointing, but the ZEW survey was considerably better.  The German IFO followed the ZEW lead, not the PMI.  The IFO improved for the first time since April.

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  • The interconnected world of politics and economics

    One Cannot Separate Politics and Economics

    Many people assume that politics and economics are separate spheres.  We find ourselves often harkening back to the even older tradition of referring to "political economy". Harold Laswell, regarded as the father of modern political science, famously defined politics as who gets what, when and how. Is not that the role of the price mechanism and the market economy?  

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  • It was a good week for summits, and for bettering relationships

    Global Summits, Global Hopes

    For global governance watchers, this was the big week of the year. Between 7 November and 16 November, the world witnessed an APEC meeting in Yanqi Lake near Beijing complete with a bilateral China–Japan ‘breakthrough’ and a major US–China climate deal; an historic ASEAN and East Asia Summit held in Naypidaw, Myanmar; and a colourful G20 meeting in Brisbane, Australia.

    Notwithstanding the chorus of those announcing growing disorder, global order seems better off after these summits.

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  • The most recent Bangladeshi election was partisan per election watchers

    Bangladesh Breaks from Tradition with Recent Election

    Recently Bangladesh was side-tracked from an electoral democracy. Earlier this year, the ruling party Awami League formed government after a one-sided election. Bangladesh’s major opposition party, the Bangladesh Nationalist Party (BNP), boycotted the election on the grounds that it was not taking place under a neutral caretaker government and that elections held under partisan caretaker governments would not be fair.

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  • An abundance of economic data will keep the markets busy

    Eurozone Divergences, Weak Commodities and China Slows Down

    There is plenty of data out today and it is generally reinforcing our three main thematic points: divergence, weak commodities, especially energy, and the slowing of the Chinese economy.  This is helping the US dollar and global bonds, but weighing on equities.  

    HSBC's flash manufacturing PMI for China slipped to 50.0 from 50.4. It is a six-month low.  The output sub-index fell below 50 for the first time since May.  

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