Economy Business and Finance News

Xi Jinping unblocked political disorder slowing economic reforms.

China's Xi's Speedy Power Consolidation in all Domains

Date: 1 March 2015

When China’s President Xi Jinping took up his position in 2012, the Chinese Communist Party (CCP) lacked political leadership. His predecessor, Hu Jintao, had lost control of political power long before holding the 18th Party Congress. 

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China increases influence in Kazakhstan as Russia's presence wanes.

China's Investment in Kazakhstan Strong Despite Domestic Economic Slowdown

Date: 1 March 2015

On 14 December 2014, the Chinese Premier Li Keqiang visited Astana for the 13th meeting of the Council of Heads of Government of the Shanghai Cooperation Organisation. The premier’s visit signified a new stage in Kazakh–Chinese economic relations. Li announced a new package of economic deals, totalling US$14 billion. 

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The latest dollar strength may be because of misinterpreting Yellen's comments.

Currency Positioning Ahead of a Busy News Week

Date: 1 March 2015

The US dollar traded higher against most of the major currencies over the past week.  No thanks to Yellen's testimony before Congress.  Market participants took away from her a reduced chance of a mid-year rate hike. 

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Could the HK and Singapore dollars follow the Swiss franc?

The Swiss Franc may not be the only Indefensible Currency Peg

Date: 27 February 2015

Already driving a housing bubble in all major Asian cities from Seoul to Jakarta, significant hot money inflows are what Hong Kong, China and Singapore seek to avoid. However, Greece’s exit from the Eurozone coupled with subsequent quantitative easing by the People’s Republic of China (PRC) to jump-start flagging growth could quickly exacerbate this Asian dynamic. 

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Are you ready for the next generation of cryptocurrencies?

Can Cryptocurrencies Evolve Beyond Bitcoin?

Date: 27 February 2015

The Bank of England believes that cryptocurrencies like Bitcoin could be big news and even UK chancellor George Osborne is tweeting about it. But it is important to note the detail in the central bank’s comments. It is talking about forming its own digital currencies in a trend which could yet see Bitcoin take a back seat in the future it helped to create. 

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A strong dollar analysis usually leaves out key factors.

Broaden Your Analysis When Counting the Costs of a Strong Dollar

Date: 27 February 2015

Numerous companies have reported that developments in the currency markets, especially the dollar's appreciation, has been an important headwind on their earnings.  The logic is compelling.  US S&P 500 companies earn almost 50% of their revenue from foreign markets.  Given the greenback's appreciation, those foreign earnings translate into less dollar earnings. 

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An emerging markets status update.

Emerging Markets Status Update

Date: 27 February 2015

Over the last week, Hungary (+2.1%), Mexico (+1.9%), and Malaysia (+1.9%) have outperformed in the EM equity space as measured by MSCI, while Russia (-2.1%), Colombia (-1.9%), and Turkey (-1.2%) have underperformed.  To put this in better context, MSCI EM rose 0.5% over the past week while MSCI DM rose 0.4%. 

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India and the U.S. need to get on the same trade agreement page.

Adding Substance to the India-U.S. Declaration of Friendship

Date: 27 February 2015

Economic relations between India and the United States seem to be going well. Prime Minister Modi and President Obama reinforced this in New Delhi endorsing the India–US Delhi Declaration of Friendship. But beneath the friendly joint statement of a new economic partnership lie considerable differences on critical issues of economic significance. Strengthening bilateral relations means overcoming these hurdles. 

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Two legal regimes govern sovereignty in an EEZ.

The Complexities of Law over China's Nine-Dash Line

Date: 27 February 2015

Suggestions that China could claim historic fishing rights within the nine-dash line misinterpret international law. While Sourabh Gupta’s arguments, outlined in a recent Forum article, relating to the UN Convention on the Law of the Sea (UNCLOS) Articles 62 and 123 have been disputed elsewhere, we argue that his argument regarding Article 56 is also incorrect. 

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The EU does not have much maneuvering room in the Caucasus.

What Is the EU’s Game in the Caucasus Separatist Territories?

Date: 26 February 2015

The European Union is making a push to raise its profile in two trouble spots in the South Caucasus, Abkhazia and Nagorno-Karabakh. Brussels insists its forays in the region are nothing more than routine diplomacy. But some observers believe the EU is hoping to push back against Russia’s troublemaking in Ukraine. 

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High frequency trading demands high frequency countermeasures.

Trading Latency to Stop a 'Flash Crash'

Date: 26 February 2015

Ask people on the street what mental image they associate with the words “stock exchange,” and you’ll likely hear about a large imposing building in the middle of New York or Chicago. Inside the building there is a huge space crowded with traders in multicolored jackets screaming and gesticulating to each other. 

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HSBC can't seem to stay out of the news.

Is HSBC too Big to Fix?

Date: 26 February 2015

As HSBC suffers under the scorching spotlight of public scrutiny once more, it seems fair to ask why the banking group so often finds itself mired in controversy. 

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Japan's security policy reform is underway.

Prime Minister Abe Seeks to Link Japan's Security Policy to the Modern World

Date: 26 February 2015

This year marks the 70th anniversary of the end of World War II. Such milestones offer an opportunity to reflect on the progress made and the steps needed to ensure that such tragic events are never repeated. Thus it is unfortunate that so many decades on debates surrounding Japan’s wartime history are still stirring controversy in the region. 

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Though linking to the West, China's banking system holds on to its past.

China's Banking Industry and Associated Risks

Date: 26 February 2015

Banking activity is growing rapidly in China’s $30tn banking system and even though the country faces a sluggish economy, its banking system consists of some of the largest banks of the world. The combined value of Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China is now at par with the four big US banks (JPMorgan Chase, Bank of America, Citigroup and Wells Fargo). 

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Economic data points to a U.S. slowdown, but it does not phase the Fed.

Is this a U.S. Economic 'Deflategate'?

Date: 26 February 2015

US prices are falling.  The 0.7% decline in US consumer prices was the largest monthly drop since December 2008.  Consumer prices in January fell 0.1% from a year ago.  The last time the year-over-year CPI was negative was when the US economy was just beginning to recover from deep contraction associated with the end of the credit cycle and the financial crisis. 

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Roman Abramovich invests in Texas fracking.

Russian Investment in 'Clean' Fracking Technology

Date: 25 February 2015

Are the Russians coming to Texas riding the tailwinds of fracking? That depends on whom you ask, as some believe Russian forces were behind the anti-fracking vote in Denton, while a $15 million investment in new Texas fracking technology by Roman Abramovich perhaps tells another story. 

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The resounding victory for the AAP poses a serious problem for the BJP.

The BJP's Declining Political Fortune

Date: 25 February 2015

The tale of the recent February Delhi assembly elections shows how quickly political fortunes can decline. Prime Minister Narendra Modi’s Bharatiya Janata Party (BJP) recorded a landslide victory at the 2014 national elections and won a majority of seats in three subsequent state elections. But his party suffered a crushing defeat in Delhi, winning just three of the 70 seats. 

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Greece's parliamentary decisions are the key to its future.

Greece's Toughest Sell May be to its People

Date: 25 February 2015

It seems everyone has reservations about the Greek proposals.  However, the European Commission, the Euro group of finance ministers and the heads of state, including Merkel, seem somewhat more supportive than the ECB and IMF.  National parliaments will likely grant their approval in the coming days. 

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Yellen's comments weigh on the dollar and support global bond markets.

Fallout from Yellen's Comments to the Senate Continue

Date: 25 February 2015

The dovish take to Fed Chair Yellen's testimony yesterday has continued to weigh on the dollar and support global bond markets.  Equities are mixed with the major markets lower while emerging markets have rallied.  The MSCI Emerging Market equity index is up about 0.8% to reach its highest level since early last December. 

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Egypt is poised for accelerating growth, but now must deal with the IS.

The IS Threatens Egypt's Economic Growth

Date: 24 February 2015

Egypt has found itself caught up in the fight against Islamic State (IS). Following the recent execution of 21 Egyptian Christian hostages by IS in neighbouring Libya on February 15, the Egyptian army sent its air force to attack Islamic State bases there. This marks a significant escalation of Egypt’s involvement in the fight against IS in the region. 

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It may be time to look for the next cheap oil supply.

The World Appears to be Swimming in Oil

Date: 24 February 2015

In 2008, Canadian economist Jeff Rubin stunned the oil market with a bold prediction: With the world economy growing at 5 percent a year, oil demand would grow with it, outpacing supply, thus lifting the oil price from $147 to over $200 a barrel. 

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Which way will the price of oil trend and where will it land?

Is there a Logical Oil Price?

Date: 24 February 2015

If you have been following the price of oil over the last few months, the chances are you are a little confused. On the one hand, you have the likes of A. Gary Shilling who, in this Bloomberg article, loudly trumpets the prospect of oil at $10/Barrel, and on the other, there is T. Boone Pickens, who, at the end of last year was predicting a return to $100 within 12-18 months. 

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China's dam problem is spilling into other countries.

China's Big Dam Problem

Date: 24 February 2015

As China shifts its focus to curbing carbon emissions, hydropower is becoming central to its alternative energy plan. But while the potential for renewable power generation cannot be ignored, the potential for costly environmental degradation is also high. 

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India's Modi has a plan and it needs to stay on track.

Can Modi's Plan for India Survive Past the Post-Election Honeymoon Period?

Date: 24 February 2015

When India opted for constitutional democracy in 1947, few gave it much of a chance. India’s diversity was overwhelming and it was home to some of the world’s poorest. But India’s democracy has succeeded beyond the expectations of even the most optimistic and faired far better than that of similarly placed countries. 

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Abe is working hard to boost Japan's inward FDI.

Japan's Inward FDI is Extremely Low Among Developed Nations

Date: 24 February 2015

Japan’s inward foreign direct investment (FDI) is extremely low in comparison with that of other developed countries and even its Asian neighbours.  In 2013, the ratio of Japan’s inward FDI stock to its GDP was 3.5 percent, the lowest among developed countries and far below the global average of 34.1 percent.

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The dollar is more bid than offer ahead of Yellen.

Anxiously Awaiting Yellen

Date: 24 February 2015

Amid relatively light news, the US dollar is bid.  The euro is back to the lower end of its range, straddling the $1.1300 area.  The dollar is at an eight-day best against the yen near JPY119.50.  Falling commodity prices, a soft New Zealand inflation expectations survey, and the prospects for additional easing by the Reserve Bank of Australia (March 3) and the Bank of Canada (March 4), are weighing on the dollar-bloc. 

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Australia's influence on Papau New Guinea took a dive.

Australia's 'Pacific Solution' Burdens the Country with Political Debt

Date: 23 February 2015

The talk in Canberra is that the priority in Australia’s diplomacy for 2015 will be its own backyard in the Pacific. This is long overdue, and may be too late. Mending diplomatic fences with Fiji may be one thing; Australia’s ability to have a positive impact on outcomes in Papua New Guinea is likely to be quite another thing altogether. 

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Is PNG heading down the wrong path with it's recent decisions?

Papua New Guinea's Controversial Decisions Could Lead to Crisis

Date: 23 February 2015

Last year in Papua New Guinea was eventful, marked by a series of controversial government decisions.  In March, the government decided to take out a loan of about 3 billion kina (US$1.2 billion, about 8 percent of GDP) to buy shares in Oil Search. The decision divided the government, and the treasurer’s opposition to it resulted in his sacking. 

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Landlocked countries pay a heavy economic price compared to coastal neighbors.

Regional Integration and Connectivity Could Greatly Boost South Asia's Economy

Date: 23 February 2015

One of the easiest ways to boost economic activity is by promoting regional economic integration that facilitates freer movement of goods, services and investment, helping to achieve regional developmental objectives by creating jobs. But in eastern South Asia, this process is being held up by misguided decisions, strategies and outdated ideas. 

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Greater reforms are need in Indonesia to stem the rising inequality tide.

Indonesia's Poverty Reduction Strides During Decentralization were Offset by Rising Inequality

Date: 23 February 2015

How effective was Indonesia in addressing poverty and inequality in the decentralisation period?  In the first decade of the decentralisation period, from 2001–10, Indonesia’s GDP grew at an average annual rate of only 5.4 percent. This was significantly slower than during 1990–96, prior to the Asian financial crisis, when Indonesia’s GDP grew at an average rate of more than 7 percent per year. 

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Chancellor Merkel received a telling gift from the Pope.

The Need for a Stronger Germany and the Undertone of a Pope's Gift

Date: 23 February 2015

German Chancellor Merkel visited the Vatican over the weekend.  Consistent with the diplomatic practice, they exchanged gifts.  The Chancellor gave to the Pope a Bach CD and a donation for refugee children.  Pope Francis gave Merkel a medal with a picture of St.Martin giving his coat to the poor. 

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This is a heavy data release week in the Emerging Markets.

A Heavy Economic Data Week in the Emerging Markets

Date: 23 February 2015

With some of the big near-term uncertainties gradually being cleared up (Greece and Ukraine), we think EM assets could get some traction this week. That said, EM FX will remain vulnerable and liable to selloffs should the dollar bullish-trend resume in earnest. 

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Important questions about monetary policy will be answered this week.

All Eyes and Ears Await Fed Chair Yellen's Congressional Testimony

Date: 23 February 2015

The Greek issue has been sufficiently resolved for now that investors' focus will shift elsewhere in the week ahead.  The answers to three questions will dominate the market's attention.  1) How strong are the deflationary forces?  2) Are the cyclical recoveries still intact?  3) What is the outlook for Fed policy? 

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The dollar remains strong, while other currencies shift around each other.

An Update on Major Currency Movement

Date: 22 February 2015

Anxiety over Greece seemed to offset the dovish read of the FOMC minutes.  The US dollar was little higher on the week against both the euro and yen in choppy trading conditions.  The much-followed Dollar Index closed marginally higher on the week. 

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Asian pop culture, especially South Korean music and dramas, score in Vietnam.

Asian Pop Culture Captures Vietnam's Heart

Date: 21 February 2015

An endless line of water that starts from a shallow stream, grows into a big river, and then flows into the ocean. That’s how Vietnam’s former deputy prime minister, Vu Khoan, described the progress made by Vietnam and South Korea in 2012, as they celebrated the 20th anniversary of the establishment of bilateral relations. 

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Though difficult to imagine now, oil prices will climb.

Factors that Explain a Future of Expensive Oil

Date: 19 February 2015

It may be difficult to look beyond the current pricing environment for oil, but the depletion of low-cost reserves and the increasing inability to find major new discoveries ensures a future of expensive oil. 

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Maybe the only ECB meeting record surprise was corporate bond consideration.

The ECB Meeting Record Mostly Met Expectations

Date: 19 February 2015

Minutes after the German finance ministry rejected Greece's offer, the ECB released its first record of its recent meeting.  The only item that rises to the level of a surprise might be that the ECB considered buying corporate bonds. 

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Government officials introduced a new imam. Kamalov had been arrested.

Kyrgyzstan Silences Popular Imam with Extremism Charges

Date: 18 February 2015

On a normal Friday, Kara-Suu’s Al-Sarahsiy Mosque is packed with thousands of worshipers from across southern Kyrgyzstan. They come to this town of 20,000 to listen to the sermons of Rashot Kamalov, the mosque’s charismatic imam. Kamalov is respected for criticizing brutal and corrupt officials, society's moral decline and Western pop culture. 

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The ECB tries to become more transparent.

Will the ECB's First Meeting Record Prove Purposeful?

Date: 18 February 2015

Tomorrow is an important day for the ECB.  Yes, it does appear a Greek compromise is getting closer as the brink draws nearer.  Yes, the ECB is preparing to launch its new and more aggressive asset purchase program, just as the Eurozone real sector data and financial data are improving. 

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India's central bank can ill afford to be reactive.

Will India's Interest Rate Cut Get It Ahead of the Economic Curve?

Date: 18 February 2015

The Reserve Bank of India (RBI) has eased its policy stance, cutting interest rates before it was expected to do so. This generated unnecessary controversy from the media and market analysts, who alleged political pressure lowered policy rates. But the case for a cut and change to a more accommodative stance had become compelling.  The fall in trend rates of inflation required this cut. 

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Cyber hacking can digitally take your money right from your bank.

Cyber Crime Meets the Banking Industry

Date: 18 February 2015

As banks slowly approach the age of digitalization they already seem to be facing tough challenges that are related to their own systems’ security.  Banks have been victims to many cyber crimes but so far the crimes had been related to hacking into customers’ accounts. 

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The U.K. reports good economic news while U.S. markets await FOMC minutes.

U.K. Economic Data Boosts Sterling, but it Comes with Cautionary Elements

Date: 18 February 2015

Strong employment and earnings data in the UK lifted sterling to the upper end of its recent range near $1.5450.  A break would quickly target the $1.5500-$1.5600 area.  The claimant count fell by 38.6k, which is about 50% more than the consensus expected, and the December decline revised up to 35.8k from 29.7k.  The unemployment rate fell to a new cyclical low of 5.7% (ILO measure). 

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ASEAN has made notable progress toward achieving the AEC.

Checking in on ASEAN and the AEC

Date: 17 February 2015

A pressing policy question facing Association of Southeast Asian Nations (ASEAN) leaders at their summit in April 2015 and beyond is whether the ASEAN Economic Community (AEC) can be sustained without more effective institutions. This article explores the link between achieving the AEC agenda and institutional effectiveness. 

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China has seen an uptick in small business registrations.

China Still Seeing Growth in Small Businesses

Date: 17 February 2015

After decades of the fastest economic growth in the world, China’s economy has started to slow down. This is perhaps inevitable, given an average annual growth rate of around 10% was sustained for almost thirty years following the economic reforms introduced by Deng Xiaoping in the late 1970s. 

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Russia's economic cold is catching in its former satellites.

What's Bad for Russia is Bad for Former Soviet Satellites

Date: 17 February 2015

Plummeting oil prices, conflict over Ukraine and the West’s imposition of sanctions have contrived to send the Russian economy into a tailspin. But it is not just Russia that is suffering – the economic downturn is having a ripple effect well beyond its borders. 

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The supply chain is only one at risk business component during wartime.

How Prepared are Businesses for War?

Date: 17 February 2015

The turmoil of 2014 was a timely reminder to businesses that they need to be prepared and have contingency plans for global conflict. The crisis in Ukraine brought Russia and the West to the brink of military confrontation; relations between Japan and China became more fraught; and the year ended with the US and North Korea in something approaching what headline writers like to call “cyber war”. 

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France, Italy and Belgium have their own deadline this month.

Greece is not the only Country with an End of February Deadline

Date: 17 February 2015

The market appears to be taking in stride the latest setback in negotiations over Greece.  The euro has recouped all the ground lost in thin markets late yesterday when the Euro group discussions broke down.  Each side has their inviolable principles, and yet some compromise has to be found.  It might not be possible to do so on the finance minister level, but may require another heads of state gathering to break the logjam. 

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Income inequality has a battle ground in fast food.

Happy Meals, not Happy Wages

Date: 16 February 2015

David Cameron has told company bosses that firms should give their staff a pay rise. Certainly a raise in wages would be long overdue. The small average wage increase over the past year or so (1.8% between September and November 2014, compared with the same months a year earlier) has had no real impact on those at the bottom. 

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The U.K.'s unavoidable banking crisis.

U.K. Labour Party's Banking Reforms Fall Short

Date: 16 February 2015

Given the scandals, bonus increases and plummeting lending to small and medium-sized British businesses, reform of the banking system is likely to be a hot topic in the run-up to the general election. It is not surprising then that Labour has launched its plan on banking reform, which proposes measures to improve competition within the banking sector, lending to smaller businesses, and the culture of banking itself. 

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Greece and the Troika should not waste time.

Preserving the EU through Compromise with Greece

Date: 16 February 2015

As the hard talks on Greece’s bailout start again, there is no time to lose. A compromise is possible. Before the weekend, Euro group president Jeroen Djisselbloem said that “Greece wants a lot but has very little money to do that. That’s really a problem.” 

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Working with Myanmar's military for democracy provides no guarantees.

Achieving Democracy in Myanmar through Military-led Reforms

Date: 16 February 2015

Despite the widespread and rapid normalising of relations with Naypyidaw over the past three years, the US (and the West in general) has been reluctant to engage the country’s military — the Tatmadaw. But the recent signing of the US National Defense Authorization Act for 2015 facilitates the gradual opening of military-to-military relations between the US and Myanmar. 

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China is still on pace to double per capita income in ten years.

China is Still Growing at Twice the World Rate

Date: 16 February 2015

The Chinese economy, one might think if one took most of the commentary on it seriously, is on a hiding to nowhere good. The growth rate is falling. Manufacturing is suffering over-capacity. The real estate bubble has burst, or it is about to. The opportunity for productive infrastructure investment is running out. 

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Europe and Asia are the source of EM news for the week.

A Preview of this Week's Events Among the Emerging Markets

Date: 16 February 2015

There are too many near-term uncertainties to make an outright directional call on EM. Between a looming deal for Greece, a fragile agreement in Ukraine, the bounce in commodity prices and fall in the dollar, we prefer to focus on market-neutral relative value strategies. 

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The U.S. economy can not grow above all others forever.

Global Market Uncertainty has Reached a New Level

Date: 15 February 2015

There is a high degree of uncertainty in the global markets.  How deep into negative territory can nominal bond yields fall?  Has oil bottomed?  Are deflationary forces deepening? Will Greece remain within EMU, will the monetary union be stronger or weaker, as a result? 

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Maybe a compromise in Greece will occur and a Ukraine ceasefire will hold?

Weaker Retail Sales, no Deal in Greece and a Ukraine Ceasefire Made for a Busy Week

Date: 14 February 2015

The US dollar's upside momentum, sparked by the strong January jobs report, and anxiety over the brinksmanship politics in Europe over Greece (and Ukraine), faded last week.  The weaker than expected US retail sales and some optimism over another ceasefire in Ukraine and suggestive signs from negotiations with the new Greek government gave the dollar bulls cause for pause. 

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Does the answer for BRICS lie in its own credit agency and bank?

A New Credit Rating Agency for BRICS

Date: 13 February 2015

Credit Rating Agencies have been a lot in news ever since the US Subprime Mortgage Crisis 2007. Later, Europe blamed them for making matters worse for individual countries by downgrading Greece and Cyprus to ‘junk’ status. 

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Venezuela and Brazil lead EM news, along with India.

An Emerging Markets Status Update

Date: 13 February 2015

Over the last week, Russia (+10.3%), Hungary (+6.1%), and Czech Republic (+2.3%) have outperformed in the EM equity space as measured by MSCI, while Turkey (-3.5%), Korea (-3.1%), and Colombia (-3.0%) have underperformed. To put this in better context, MSCI EM rose 0.6% over the past week while MSCI DM rose 1.6%. 

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Plenty of overseas developments jarred the dollar bulls into action.

Dollar-Bulls Take the Money and Run

Date: 13 February 2015

What a difference a week makes.  Last week's US employment data had put the dollar bulls back into control.  Developments over the last 24-48 hours have seen the reins slip from their hands. 

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Asia stands to benefit from plurilateral trade agreements.

Liberalizing Trade Through Plurilateral Agreements Seems to be Working

Date: 12 February 2015

After over a gloomy decade of inconclusive talks, a small but important step was taken in early December 2014 to finish the Doha Round negotiations of the World Trade Organization (WTO). In 2015 and beyond, actions to arrive at a Doha Round Agreement should be accompanied by embracing new plurilateral trade agreements within the WTO. This move can benefit growth and development in Asia. 

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New rules would help limit tax evasion, but is it realistic?

Tax Evasion Exposes a Broken System

Date: 12 February 2015

There has been an international outcry over the leaked HSBC files, which provide evidence that the bank’s Swiss arm helped wealthy clients put millions of dollars’ worth of assets out of the reach of the tax authorities. Naturally, politicians from all parties have responded by committing to holding anyone found guilty of tax evasion accountable for their actions. 

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China seems willing to step into the Afghan void created by the U.S.

What are China's Motives for Reaching Out to Afghanistan?

Date: 12 February 2015

Whether you fear or welcome a challenge to the world’s existing power structure, the main focus of attention is on when China will begin to translate its increasing influence into genuine global leadership. And after a period when China has widely been seen as wanting to have power without leadership or responsibility, there are some signs that things are beginning to change. 

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Malaysia looks to meet the end of 2015 AEC deadline.

ASEAN's Ready and Capable Steward

Date: 12 February 2015

ASEAN needs a ready and capable steward in 2015 and Malaysia looks to be in the right place at the right time. Malaysia has made clear that realising the ASEAN Economic Community (AEC) by the end of the year will be its main goal for its 2015 chairmanship of ASEAN. 

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A Ukraine/Russia ceasefire happened, but not one between Greece and Europe.

The Strategic Nature of the Russia/Ukraine and Greece/Europe Standoffs

Date: 12 February 2015

A ceasefire in Ukraine appears to have been reached, and despite some confusion late yesterday, no compromise has been struck over the new Greek government's demand that it is recognized that the previous agreements are not working. However, that may give a false sense of what is the more intractable problem. 

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It looks like Armenia wants to hedge its economic bets.

Armenia: Yerevan Mending Fences with EU

Date: 11 February 2015

With the Russian economy hitting the skids, it looks like Armenia wants to hedge its economic bets. Although Yerevan became a member of the Russia-led Eurasian Economic Union in January, a senior Armenian government official told EurasiaNet.org that the country is working to complete an updated version of an EU Association Agreement that Armenian officials put on hold back in 2013. 

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Greece may have to restore its dignity first.

Greece's Debt Crisis Highlights the Difficulties of Eurozone Governance

Date: 11 February 2015

The emphatic rejection of disastrous austerity policies by the newly elected Greek government has caused consternation in Eurozone capitals. Germany has been particularly strong in dismissing Greek pleas for a renegotiation of its debt and has warned of an impending fallout should Greece persist in their demands. 

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AEC membership may provide what Cambodia needs domestically.

Cambodia's New Dawn of Economic Development

Date: 11 February 2015

As Cambodia is coming to terms with its changed political landscape after the 2013 elections, a new era of economic development is dawning. Whether the country will be able to secure long-term economic and social development largely depends on its capability to integrate itself successfully into the ASEAN Economic Community (AEC), which may or may not meet its deadline set for the end of the year. 

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Abe expands Japan's foreign policy focus to the Middle East.

Shinzo Abe Raising Japan's Profile by Engaging the Middle East

Date: 11 February 2015

After his victory in the December 2014 elections, Japan’s Prime Minister Shinzo Abe has pledged to turn Japan into ‘one of the greatest powers in the world’ by implementing the new foreign policy approach of ‘proactive pacifism’. Abe is seeking to foster Japanese international engagement, which will increasingly reach beyond the regional boundaries of the Asia-Pacific. 

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Norway offsets the oil collapse with the world's largest sovereign fund.

Norway says 'Keep Calm and Oil On'

Date: 10 February 2015

Norway’s petroleum sector is its most important industry. The petroleum sector accounts for 21.5% of its GDP, and almost half (48.9%) of total exports. In 2013 Norway was ranked the 15th-largest oil producer, and the 11th-largest oil exporter in the world. It is also the biggest oil producer in Western Europe. 

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It began simply enough, but Lloyds Bank investors no longer feel that way.

Lloyds Bank Complicates Investing for Its Investors

Date: 10 February 2015

If you need a reminder of how complex investing in the stock market can be, look no further than the row currently raging between Lloyds Bank and up to 100,000 investors who helped to bail it out in 2009 by agreeing to take up some rather special corporate bonds. 

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US-India BIT talks resume though an agreement is a long way off.

Defining 'Investment' Plays a Large Role in a US-India Bilateral Investment Treaty

Date: 10 February 2015

It is official: India and the US will resume negotiations on a high-standard bilateral investment treaty (BIT). In a recent joint statement Prime Minister Narendra Modi and President Barack Obama affirmed their ‘shared commitment to facilitating increased bilateral investment flows and fostering an open and predictable climate for investment’. 

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Privatization proceeds could fund Japanese research efforts.

The Case for Funding R&D in Japan Through Asset Sales

Date: 10 February 2015

The debate on fiscal reform in Japan has been heating up. The working assumption so far has been that tax hikes will be sufficient to solve the fiscal problem. Fortunately the fiscal debate has now gone beyond this innocent simplicity and spending control is finally on the agenda. So is privatisation, with the government promising it will ‘implement public service reforms which aim for more efficient administrative work and privatisation’. 

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The recent past calls banking ethics into question.

Banking Ethics Questionable History

Date: 10 February 2015

Ethics & Banking are supposed to be strongly related to each other, which could potentially lead to strong governance and a stable economy. However, in recent years, poor regulation, sloppy governance, shadow banking & greed for profits has led to a global economic collapse. 

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Xi Jinping's anti-corruption campaign has helped with SOE reforms.

Checking in on China's SOE Reforms 25 Years after They Began

Date: 9 February 2015

As in other areas, the reform of state-owned enterprises (SOEs) in China has been a gradual process. Now, almost 25 years after SOE reforms began, the government must tackle new problems: breaking down special interests, distancing the state from the daily operation of enterprises — and associated issues of corruption — and improving the overall efficiency of the economy. 

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Will AUSFTA issues translate to the TPP or will they be resolved?

Shifting Lessons Learned from AUSFTA to the Trans-Pacific Partnership

Date: 9 February 2015

Many bilateral FTAs signed to date in Asia have not brought significant commercial or domestic reform or benefits. For one thing, bilateral ‘free trade agreements’ (which are preferential in character) are less likely to deliver substantial trade opening benefits unless the partners to them are a very large part of global trade, like the United States, Europe and China are for example. 

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The real cost of AUSFTA is high and mounting.

Critics of the Australia-U.S. Free Trade Agreement Prove to be Correct

Date: 9 February 2015

The critics were right. Ten years after the Australia–United States free trade agreement (AUSFTA) came into force, new analysis of the data shows that the agreement diverted trade away from the lowest cost sources. Australia and the United States have reduced their trade with rest of the world by US$53 billion and are worse off than they would have been without the agreement. 

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There are geo-strategic implications of a 'Grexit'

Looking Beyond the Economic Impact of a Greece-less EMU

Date: 9 February 2015

The discussion about Greece and its future in the monetary union, or like Greenspan opined, the lack thereof, has focused on economic issues to the near-exclusion of all else.  This is myopic.  There are important geostrategic interests at stake. 

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This is a busy week for Emerging Markets

A Preview of this Week's Events Among the Emerging Markets

Date: 9 February 2015

The rebound in oil prices and the sliver of hope of a peace treaty in Ukraine is serving to soften a few of the trends in EM assets in recent months.  We doubt that this is the start of a new trend, and more likely just a positioning adjustment.  Although oil can continue to correct higher, we think the downward pressure will remain intact.  And even if an agreement in the Ukraine is reached, the implementation and longevity of a deal will be highly debatable. 

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Technical indicators reinforce major market themes.

Global Currency Update, Futures and Economic News

Date: 9 February 2015

The US dollar's consolidative phase appears to have ended with the January employment report. Employment growth accelerated, and average hourly earnings rebounded.  There was a 10-11 bp increase in both short- and long-term interest rates. 

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The markets deal with Greece's new government, Ukraine and trade data.

Greece, Ukraine and Exports/Imports Lead the News

Date: 9 February 2015

Investors are having a tough time of things today.  Three issues have eclipsed the firming of expectations for a mid-year Fed hike. First, Greece's Tsipras remained committed to his campaign promises in a speech to parliament that keeps it in loggerheads with Europe.

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Ties between China and Africa offer a look at China's growth trajectory.

Insights into China's Economic Reforms Come Partly from Africa

Date: 7 February 2015

China, like much of the developed world, faces slower growth and an ageing population. Africa in contrast offers the potential of ‘catch up’ growth and a growing young pool of low-cost labour, alongside plentiful natural resources. The economic prospects of both intertwine. 

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China's neighbors are not pleased with its control of the upper Mekong.

China's Control of the Mekong is Upsetting its Neighbors

Date: 7 February 2015

Trouble may be brewing on the Mekong. The cumulative socio-political and environmental impact of dams on the Mekong raises serious cause for concern. There is a race to the bottom to secure economic growth from a burgeoning hydropower boom in Laos, Cambodia and Vietnam. 

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Turkey, the PBOC, Czech Republic and Ukraine lead EM news.

An Emerging Markets Status Update

Date: 7 February 2015

Over the last week, Russia (+12.2%), Hungary (+7.2%), and UAE (+6.3%) have outperformed in the EM equity space as measured by MSCI, while Turkey (-4.0%), Hong Kong (-0.8%), and the Philippines (-0.2%) have underperformed.  To put this in better context, MSCI EM rose 1.6% over the past week while MSCI DM rose 3.0%. 

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Observers are arguing for a gradual, managed devaluation.

Kazakhstan Anxious About another Devaluation

Date: 6 February 2015

February can be a spooky month for anyone with a pocketful of tenge. Kazakhstan’s embattled currency has been devalued twice in the last six years, both times in February. With plenty of indications the tenge is overvalued again, would-be investors are putting decisions on ice, distressed banks are reluctant to issue credit, and private citizens are hoarding dollars. 

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Solving the Russia/Ukraine contest won't help the Russian economy.

Russia's Economic Woes Run Deep

Date: 6 February 2015

Angela Merkel and Francois Hollande’s push for peace in Moscow has helped fuel optimism about the prospects for Russia’s spluttering economy. 

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Critics argue that the EU future is strong nations bailing out weaker ones.

Will the OMT Program Turn the Eurozone into a 'Transfer Union'?

Date: 6 February 2015

The European Central Bank (ECB) symbolises the strange mix of politics and technocracy that marks EU governance. The bank was pushed to centre stage by the Eurozone debt crisis and the unwillingness or inability of Europe’s national governments to come up with timely solutions. 

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President Obama's India trip kick-started stalled BIT negotiations.

Improving India's Bilateral Investment Treaties

Date: 6 February 2015

President Barack Obama’s recent visit to India will kick-start stalled negotiations on a bilateral investment treaty (BIT) between the US and India that has been under sporadic discussion since 2008, aimed at facilitating greater cross-border investment flows. 

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U.S. data gets mixed in with the ECB decision on Greece and SNB fallout.

The ECB's Decision and U.S. Jobs...Meanwhile, at the SNB

Date: 6 February 2015

The ECB's decision yesterday to no longer accept Greek government bonds or state-guaranteed paper, but approving Emergency Lending Assistance (ELA) by the national central bank remains a key talking point today. The timing of the decision, following the meeting between new Greek Finance Minister Varoufakis and Draghi but before Varoufakis met with German Finance Minister Schaeuble is particularly intriguing. 

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The financial sector should embrace green investment.

Will the Financial Sector Help or Hinder the Green Transformation?

Date: 5 February 2015

Many Asian countries have set ambitious targets for climate change mitigation. Governments all over the region are devising green growth strategies, aiming to reconcile economic growth with low carbon emissions as well as trying to limit other forms of environmental degradation such as soil, water, and air pollution. 

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Iran maintains a desire for closer ties to Armenia.

Looking at Armenian-Iranian Relations through a Russian Lens

Date: 5 February 2015

The late January visit to Armenia by Iranian Foreign Minister Javad Zarif got little media attention, but it could have significant ramifications for geopolitics in Eurasia. Specifically, the trip could help Russia gain a trade outlet that softens the blow of Western sanctions. 

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How will Australia redefine its role in the Asian economic system?

What is Australia to do about China's Slowdown?

Date: 5 February 2015

Few countries have done so well out of China’s belated economic awakening as Australia, which has sated much of the People’s Republic’s voracious appetite for overseas iron ore and metallurgical coal. 

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Breaking up capital congestion is a byproduct of negative interest rates.

Destroying Capital with Negative Interest Rates

Date: 5 February 2015

The Great Financial Crisis lingers.  The fact that the world economy continues to grow does not change that fact.  There are different lenses from which one can view the crisis and seek to understand its implications. 

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The ECB is managing to contain the Greek mess so far.

The Impact of the ECB's Decisions Regarding Greek Debt Largely Confined to Greece

Date: 5 February 2015

The main story today is not that the ECB will no longer (as of February 11) accept Greek government bonds as collateral and that Greek banks can have access to the national central bank via the Emergency Lending Assistance.  That news broke late in North America yesterday.  The euro fell around a cent on the news.  The real development today is that the impact remains largely confined to Greece. 

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The UK's battle with real wage and productivity growth.

Can Britain Overcome Sluggish Growth in Real Wages and Productivity?

Date: 4 February 2015

Two things stand out about the economic recovery in Britain. One is the sluggish growth in real wages. The other is the sluggish growth in productivity. That the two phenomena have coincided is no accident. Low real wages, by eroding the incentive to work and the morale of workers, have fed low productivity. 

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NITI takes over planning the future of India.

Few Will Miss India's Planning Commission

Date: 4 February 2015

The Planning Commission is dead: long live the National Institution for Transforming India (NITI). The role and remit of India’s new planning institution has been under debate ever since Prime Minister Narendra Modi in his Independence Day address announced the demise of the Planning Commission. 

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A Greece exit from the EMU would mean that the union is reversible.

Can Anyone Spare Greece about 10 Billion Euros?

Date: 4 February 2015

Greece needs about 10 bln euros by the end of the month.  The negotiations are fierce.  Although the ECB and Germany clashed over the conduct of monetary policy, they seem to agree, not to concede to Greek requests for debt forgiveness or a debt swap. 

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Brand values shine in China versus the rest of the world.

Chinese Banks Outshine US Banks In Global Ranking 2015

Date: 4 February 2015

The Banker's Top 500 Banking Brands February edition 2015 released a league table of the world’s biggest banks, ranked by their brand value. A lot of ranks seemed to have changed thus reflecting a change in the banking industry across the globe. 

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Lots of economic data.

Economic Data, Mostly from Europe, is Today's Focus

Date: 4 February 2015

The powerful bout of long dollar liquidation, spurred by optimism that the new Greek government had moved away from its posturing about debt forgiveness, has largely faded today. The ECB is reportedly rejecting Greece's request to expand its T-bill offering to replace the formal assistance program that runs out at the end of the month. 

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Shocks like Ebola should force a refocus on measuring economic growth.

Can the Ebola Crisis Force a Change in Economic Growth Metrics?

Date: 3 February 2015

If ever we wanted a reminder of how global capitalism has got things wrong, the Ebola outbreak in West Africa serves the purpose well. Our assumption that economic growth is essential is not only a feature of markets and politics, it also feeds into our thinking on development goals such as poverty reduction. 

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The RBA eases and there is less talk of a Grexit.

Another Central Bank Eases and Grexit Talk Subsides

Date: 3 February 2015

The Reserve Bank of Australia joined the chorus of central banks to ease policy.  The 25 bp rate cut was not a major surprise but it did catch many a bit off-guard as recent data and the pace of the Australian dollar's decline had prompted many to push out the expectation to next month. 

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What are the long term implications of negative interest rates?

Testing Central Bank Balance Sheet Limits

Date: 2 February 2015

When the Swiss National Bank lifted its cap on the franc, many thought they understood the message.  It had reached the end of its rope.  Some suggested the ownership structure of the SNB (owned by the Swiss cantons and individuals vs the stock exchange) opposed a further expansion of its balance sheet (~80% of GDP) vs ~20-25% in the UK and US by comparison. 

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Is is up to Shell to keep Arctic oil relevant?

Keeping the Arctic Oil Industry's Dreams Alive

Date: 2 February 2015

Oil companies have eyed the Arctic for years. With an estimated 90 billion barrels of oil lying north of the Arctic Circle, the circumpolar north is arguably the last corner of the globe that is still almost entirely unexplored. 

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Indonesia may be an oil importer, but it's still a profitable business.

The Oil Business is Still Big Business in Indonesia

Date: 2 February 2015

Indonesia’s ‘oil bonanza’ is now over. It ceased to be a net oil exporter and became a net importer in 2004. Indonesia currently produces only slightly above 800,000 barrels per day while the consumption level is about 1.4 million barrels per day. 

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Mostly easing talk from EM central banks, except for Brazil.

A Preview of this Week's Events Among the Emerging Markets

Date: 2 February 2015

Waning risk appetite along with growing uncertainty in Europe about Greece have set up emerging markets for a difficult week. In addition, the wave of monetary policy easing and expectations for further easing by EM central banks has removed another buffer against further currency depreciation. 

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Market participants have a busy week ahead.

A Full Slate of Economic Data and Currency Movement Start the Week

Date: 2 February 2015

The US dollar is mixed.  It has recovered from an early spike to JPY116.65 in early Asia to test the JPY117.80 area.  The euro briefly dipped below $1.1300 before Spanish and Italian PMIs surprised on the upside.  Sterling bounced on a stronger PMI report but hit a wall of selling that pushed it back toward $1.50 before bids returned.  The dollar-bloc is mixed. 

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Myanmar's reforms have hit a speed bump.

Needed Reforms in Myanmar are Facing New Headwinds

Date: 1 February 2015

Myanmar’s initial reforms beginning in March 2011 were dramatic and surprised everyone, but they are still incomplete and not always operating well. Many problem areas have not yet undergone reform (such as land reforms, judicial system reform, and ending human rights abuses), meaning that much ‘unfinished business’ remains. But this does not mean that Myanmar’s reform process has stalled. 

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Can the U.S. remain a bastion of strength during a global slowdown?

Exploring the Factors Keeping the U.S. Dollar and Economy Strong

Date: 1 February 2015

The bull case for the US dollar rests on two legs. The first is that the policy response to the crisis has produced superior economic results in the US that would lead to the Fed raising rates later this year. The second was the ongoing challenges faced by Europe and Japan.  For several months, both legs had strengthened. 

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The AEC has had successes on broader strategic objectives.

Measuring the AEC Successes

Date: 31 January 2015

Regardless of whether or not the ASEAN Economic Community (AEC) will be successfully concluded by its deadline of 31 December 2015, we should not be solely obsessing about its ability to deliver its ‘single market’ objective on time: the AEC project has broader strategic objectives too, and on that front, it has been a success. 

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The dollar finished January mixed, but still strong against most currencies.

Have doubts about a mid-year rate hike slowed dollar momentum?

Date: 31 January 2015

The US dollar turned in a mixed performance in the last week of January.  It slipped against the euro, yen, sterling and the Swedish krona, while rising against the other G10 currencies. The Swiss franc was the weakest of the majors, losing about 4.5% of its value against the dollar, encouraged by signs the Swiss National Bank may have intervened. 

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Hungary, Turkey and Pakistan lead Emerging Market news.

An Emerging Markets Status Update

Date: 30 January 2015

Over the last week, Qatar (+3.1%), Czech Republic (+1.8%), and Poland (+1.5%) have outperformed in the EM equity space as measured by MSCI, while Russia (-10.9%), Brazil (-6.4%), and UAE (-5.8%) have underperformed. To put this in better context, MSCI EM fell -3.0% over the past week while MSCI DM fell -1.2%. 

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Events in Europe have dominated January.

The Other Kind of Deflationary Forces (Economic) are Growing Stronger

Date: 30 January 2015

The month and week are winding down, and what a month and week it has been. The three key events were all about Europe.  First on the list was the SNB's unexpected decision to lift the cap on the franc. The ECB's decision to proceed with a sovereign bond buying program was less a surprise but just as momentous if not more so.  Syriza's victory in Greece is already changing the political landscape. 

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Would the loss of an EMU member, or two, be bad?

Is Europe Stuck with the EMU?

Date: 29 January 2015

A jacket or shirt may be reversible.  Time is unidirectional, we are taught and some things simply cannot be reversed, like a hard-boiled egg. However, science has once again pulled the rug out beneath our feet.  Earlier this week, ABC reported that scientists have discovered a way to un-boil an egg white.  Apparently boiling an egg folds the proteins, and scientists have learned to unfold them.  They can reverse the boiling process within a few minutes. 

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Should Europe collaborate with the US on high-tech innovation?

What's Wrong with Europe's Silicon Valley?

Date: 29 January 2015

Silicon Valley has become a synonym for innovation and, with its ecosystem of super-moneyed venture capitalists, it is world renowned as a hub for new products and software. Europe meanwhile has struggled to produce the likes of Facebook, Amazon or PayPal, or to garner the levels of investment for its startups. 

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Ukraine's official statements about oil and gas belie government actions.

The Reality of Ukraine's Oil and Gas Investment Climate

Date: 28 January 2015

The Ukrainian government has repeatedly claimed it is doing its best to improve the oil and gas investment climate, but official statements are the opposite of the reality, as Prime Minister Arseniy Yatsenyuk is leading the great deception. 

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Low barriers to entry, but only riches for some.

Is the Digital Economy a Solution to, or a Source of, Inequality?

Date: 27 January 2015

When we think about income and wealth inequalities we are tempted to lay blame on the old way of doing things. In Capital in the Twenty-First Century, Thomas Piketty picks out inherited money as a driver of unsustainable disparities between the global rich and poor. Oxfam recently pinpointed the high-profit finance and pharmaceutical industries as engines of inequality that distribute wealth to the wealthy. 

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Political bedfellows are stranger than ever while oil prices remain low.

Geopolitical Shifts in the Face of Low Oil Prices

Date: 27 January 2015

In a documentary that aired recently on the Canadian Broadcasting Corporation's popular The Fifth Estate program, an allegory of Vladimir Putin was presented. The wily Russian president was described growing up in a shabby St. Petersburg apartment, where he would often corner rats. Now, punished by low oil prices and Western sanctions against Russian incursions in Ukraine/ Crimea, Putin is himself the cornered rat.

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Signs of economic life are appearing in North Korea.

Is North Korea's Economy Turning Around Under Kim Jong-un?

Date: 27 January 2015

The longevity of Kim Jong-un’s regime in North Korea has been subject to widespread speculation by outside observers. Several factors led some to predict an early downfall for the regime: young and immature leadership, a potential factional struggle, a stagnant economy and a hostile external environment. But this prediction has not yet been realised.

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Don't expect fireworks from this Federal Reserve meeting.

A "Routine" U.S. FOMC Meeting if That's Possible

Date: 27 January 2015

The Federal Reserve’s two-day meeting concludes Wednesday.  To the extent the FOMC meeting is ever routine, this should be it.  Its forward guidance evolved at the end of last year.  The “considerable time” between the end of the asset purchase program, which it never called quantitative easing, and the first hike, is now called “patience”. 

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The 0.1% gather to discuss inequality and well-being.

Well-healed Meet and Discuss Well-being in Davos

Date: 26 January 2015

Last week, the 0.1% met at World Economic Forum annual gathering in the Swiss mountain resort of Davos. While the official excuse to go there is to discuss and shape the global agenda – the theme dominating this year being inequality – we know that it is more about networking, socialising, fine dining and, new for this year, a chance to improve your wellbeing. 

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China's SOE needed reforms have many facets.

Chinese SOE Reform has Attracted a lot of Attention

Date: 26 January 2015

The further reform of China’s state-owned enterprises has attracted a lot of attention and triggered debate since it was discussed last year at the third plenary session of the Chinese Communist Party’s 18th Central Committee (the Third Plenum). 

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Abenomics is in full swing in Japan.

Can Japan's LDP depend on Komeito's Cooperation?

Date: 26 January 2015

Shinzo Abe’s second term as prime minister of Japan, unlike his first, was a modest success through till 2014. But he will have to bring real and tangible outcomes for Japan and the Japanese economy if it is to succeed the third time round. 

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Many Emerging Market currencies appreciated last week.

A Preview of the Emerging Markets

Date: 26 January 2015

Emerging markets seem to be on a slightly better footing after a few turbulent weeks. Many EM currencies were able to appreciate against the dollar in the wake of the ECB’s QE announcement, despite most major currencies depreciating. 

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The fallout from Syriza's victory begins and will last for a while.

Syriza Wins! - Does Greece?

Date: 26 January 2015

As the demonizing of Syriza gives way to post-electoral analysis, its victory appears anti-austerity, not anti-EMU.  Politics makes for strange bedfellows, and a small conservative party, Independent Greeks, have agreed in principle to form a coalition.  The period of political uncertainty that was a clear risk will not materialize, with a quick swearing in of a new government. 

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Eight Emerging Market Central Bank meetings and a host of economic data.

An Incredibly Busy Market Week Lies Ahead

Date: 26 January 2015

Reasonable people can debate some of the details, but there was little doubt that last week's big event, the ECB's asset purchases, was widely anticipated.  Nevertheless, what is striking is the repeated surprises by officials over the past several months. 

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Asian-Latin America trade has great potential, but faces challenges.

The Growth Potential for Asian-Latin American Trade

Date: 24 January 2015

Amid a recovering world economy beset by risks, the outlook for Asia–Latin America economic ties seems bright. Asia needs commodities for its dynamic global factory and Latin America has abundant natural resources. Asia needs food for its large population and Latin America has fertile agricultural land. 

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Who is hacking whom and will the threats escalate?

The Threat of International Cyber Hacking

Date: 24 January 2015

China and the US are entering a new and troubling phase of cybersecurity. The recent crash of North Korea’s internet network reveals just how inexperienced world leaders are in dealing with cyber conflict. 

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Currency news abounds from around the globe.

Global Currency and Futures Observations

Date: 24 January 2015

The US dollar extended its gains against all the major currencies and most emerging market currencies over the past week.  The ECB's asset purchase program was a key driver, but the euro, though it fell a little more than 5.5 cents from the mid-week high to Friday's low, was not the weakest of the majors.  That distinction goes to the dollar bloc. 

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Is the Russian economic crisis helping the Kremlin?

Russia: Economic Crisis Signals the Beginning of End for Putinism

Date: 23 January 2015

The combination of Western sanctions and the collapse of oil prices is exposing deep structural problems in Russia’s economy, and it is showing the petro-state model of governance developed by Vladimir Putin is unsustainable. Yet just because Putin’s system can’t last doesn’t mean its demise is imminent. 

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Chinese investment pivots to Tajikistan from Kyrgyzstan.

Are Chinese Investors Ditching Kyrgyzstan for Tajikistan?

Date: 23 January 2015

Central Asia’s two least-developed countries, Tajikistan and Kyrgyzstan, are both heavily dependent on Chinese investment these days. Now, it appears Chinese investors are tiring of persistent uncertainty in Kyrgyzstan and are shunning the country in favor of neighboring Tajikistan. 

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Experts say the Aussie dollar needs to fall further against major currencies.

Has the Australian Dollar Depreciated Enough to Positively Impact GDP?

Date: 23 January 2015

The Australian dollar depreciated significantly in the second half of 2014, losing around 14 percent of its value against the US dollar and almost as much against the Chinese renminbi. Nevertheless, the Australian dollar needs to devalue by a further 15 percent in the coming years if the Australian economy is to continue operating at close to full employment. 

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Surprising Central Bank rate decisions pepper the Emerging Markets news.

Emerging Markets Status Update: Central Bank Surprises

Date: 23 January 2015

Over the last week, Hungary (+8.8%), Russia (+7.2%), and Chile (+5.7%) have outperformed in the EM equity space as measured by MSCI, while the Philippines (-0.9%), Czech Republic (-0.6%), and UAE (-0.1%) have underperformed.  To put this in better context, MSCI EM rose 3.6% over the past week while MSCI DM rose 2.2%. 

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Market trends that existed before the ECB announcement persist.

Politics Joins the ECB's Monetary Policy Party with Elections in Greece and Italy

Date: 23 January 2015

It is not about the data today though there has been a slew of data that in other times would have moved the market.  The flash HSBC China PMI reported above expectations at 49.8 from 49.6 in December, but still shows that the manufacturing sector of the world's second largest economy is slowing.  Eurozone's flash PMI was also a bit better than expected, consistent with 0.2%-0.3% quarterly GDP. 

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How much will a degree help in starting a business?

The Value Of A Graduate Degree In Starting A Business

Date: 22 January 2015

A lot of people make the claim that the true value of higher education is in the intangible skills and lessons a student picks up along the way. I'd tend to agree, with the caveat that it strongly depends on the specific type of education. But along these lines, one area in which the concept seems to be particularly applicable these days is in entrepreneurship. 

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Low prices are hurting the oil and gas patch, and some more than others.

Uneven Negative Effects of Low Oil Prices

Date: 22 January 2015

U.S. oil and gas rig counts dropped to their lowest level in over four years, falling by an additional 74 units for the week ending on January 16. The lower count provides fresh evidence that low oil prices are forcing drillers to pare back operations and slash spending. 

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China's slower growth rate may be their 'new normal'.

The Dynamics of a Slower Growth China

Date: 22 January 2015

The Chinese economy is widely perceived to have entered a ‘new normal’ — annual GDP growth has slowed to between 7 percent and 7.5 percent from the double-digit levels of previous years. This was something that policymakers expected: an inevitable result of economic restructuring. 

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ECB plan details are known today, but the effects will take a while to be known.

The Benefits of Lower Interest Rates Over a Currency War

Date: 22 January 2015

Today is all about the ECB.  The press claims to have access to people or documents that have the ECB buying 50 bln euros of bonds a month.  The duration of the program is not clear. There was a conflict in the media.  Some claimed that the program would last a year.  Others claimed it would last until the end of 2016. 

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Vietnam seems to be in China's shadow when making foreign policy decisions.

Are Vietnam's Diplomatic Successes Overshadowed by China?

Date: 21 January 2015

US–Vietnam military relations have improved remarkably in recent years but talk of an enhanced alliance between Washington and Hanoi overlooks important geopolitical and historic nuances. Defence relations between the two countries turned a page in the early 2000s, when both countries moved beyond the legacy of the Vietnam War. Both countries began to actively explore new ways to work together. 

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Sirisena's come from behind win was a bit of a surprise.

Is Maithripala Sirisena's Win Good News for Sri Lanka?

Date: 21 January 2015

Two months before the Sri Lankan presidential elections, few thought that President Mahinda Rajapaksa would lose. There was no formidable opponent from the opposition to challenge him, and, since his re-election after the war victory in 2009 for a second term in 2010, his party had won all the Provincial Council elections held on a staggered basis. 

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The Rio+20 theme is green economy for sustainable development.

Asia Goes Green with Sustainable Investments

Date: 21 January 2015

The concept of “green growth” has been connected to the “green economy for sustainable development and poverty reduction,” which is the first theme of the Rio+20 United Nations Conference on Sustainable Development (UNCSD). 

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Investor's may need to try hard to focus on the long-term.

Have Investors Lost Their Bearings?

Date: 21 January 2015

Many investors appear to have lost their bearings.  It is as if the proverbial rug has been pulled from beneath their feet.  Last week's bolt from the blue by the Swiss National Bank is simply the latest in a string of significant surprises. 

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The ECB meeting is the main event for this week.

Waiting for the ECB

Date: 21 January 2015

The European Central Bank meets tomorrow, and that is the main event of the week.  The price action today is dominated by other central banks.  The market is still struggling to find a new balance after the Swiss National Bank's surprising move last week. 

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Was the SNB forced into floating the franc?

Did the Swiss National Bank have a Choice?

Date: 20 January 2015

Currency wars have been predicted for years. Outright monetary battles were last seen during the Great Depression of the 1930s, when governments competed to devalue their currencies to gain market advantage. But since the return to floating exchange rates in the 1970s, the risk of renewed competitive manipulation has hovered over the monetary system like a dark cloud. 

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Shanghai's FTZ reforms should propagate throughout the country.

Shanghai FTZ Reforms Moving Toward Targets

Date: 20 January 2015

Since the release of the Shanghai Free Trade Zone blueprint in September 2013, plans for similar reforms in the rest of China have emerged — and are to be implemented within the next three years. 

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Australia's economy has been underperforming its peers.

Can the Right Reforms Boost Australia's Underperforming Economy?

Date: 20 January 2015

For some time now, Australia’s economy has been underperforming its peers.  Since the end of 2012, Australia’s real GDP has grown at an annual rate of 2.3 percent, 0.1 percentage points less than that of the United States, and 0.2 percentage points less than those of the United Kingdom and Canada, and 0.3 percentage points less than that of New Zealand. 

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Dollar strength should persist through other Central Bank announcements.

The ECB and BOJ's Easing Mode Benefits the Dollar

Date: 20 January 2015

The US dollar's strength is a product of both the expected trajectory of Fed policy and the fact that ECB and BOJ are still in aggressive easing modes.  Both sides of the equation are being driven home.  The Wall Street Journal's Hilsenrath, recognized to be well sourced at the Federal Reserve, reaffirms that it is on track to raise rates later this year.  Next week, the FOMC will likely continue to recognize that it can be "patient". 

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China has been slow to liberalize financial market mechanisms.

Why are Chinese Officials Accelerating Financial Market Reforms?

Date: 19 January 2015

In late 2013 the Chinese authorities put together a reform agenda for the financial sector, focusing on reducing entry barriers, liberalising market mechanisms and improving financial regulation. This could be the final frontier of China’s financial reform, which — according to the plan — should make critical progress by 2020. 

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China takes 40% of Taiwan's exports.

China is Taiwan's Largest Export Market - Is that OK?

Date: 19 January 2015

In the past decade and a half, despite some ups and downs, economic and then political relations between Taiwan and mainland China have gone from strength to strength. The election of Chen Shui-bian as President of Taiwan in 2000 saw a period in which political relations were tense, even though trade shares multiplied rapidly. Chen was pro-Taiwan independence. The turning point came when Chen, nonetheless, lifted the ban on direct trade with the mainland in 2001 and with Taiwan’s and China’s accession to the WTO at the end of 2001. 

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P2P banking is one of many technological banking developments.

Banking Developments in 2015

Date: 19 January 2015

The Banking Industry has evolved tremendously over a period of time. Nowadays, modern banking sector is doing away with its traditional methods and shifting focus to a more advanced and digitally connected network. 

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A preview of the Emerging Markets

A Preview of this Week's Events Among the Emerging Markets

Date: 19 January 2015

After an eventful few sessions, EM assets this week will be wedged between a US holiday on Monday and expectations ahead of the ECB meeting on Thursday. Bar any unexpected developments, we doubt there will be a lot of conviction for trades in the near term. 

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The BOJ, BOC and ECB all meet this week.

Central Bank Meetings Dominate This Week's Economic Events

Date: 19 January 2015

This will be an eventful week.  There are three major central bank meetings:  BOJ, BOC and ECB.  The ECB is widely expected to announce a wider bond-buying program that will include sovereign bonds.  January 25 Greece holds national elections in which Syriza is maintaining a small lead. 

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The ruling Kuomingtang (KMT) suffered defeat by an unprecedented margin.

Taiwan's Surprising Election Results

Date: 18 January 2015

The results of Taiwan’s local elections, held in November, came as a big surprise to many not only in Taiwan. The ruling Kuomingtang (KMT) suffered defeat by an unprecedented margin. The results were a sharp reversal from those of the 2012 presidential election, won by the KMT. 

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An ageing and diverse population is being met very well by New Zealand

Ethnic Diversity is a Striking Characteristic of Today's New Zealand

Date: 17 January 2015

New Zealand obviously does not enjoy the economic growth rates of Southeast Asia, let alone China. Nonetheless, indications were during 2014 that New Zealand could sustain long-term growth of 3 percent per annum without supply constraints and inflationary pressures. The thought was that the limit was little more than 2 percent. 

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Will the umbrella movement make a return engagement?

Don't Write Off Hong Kong's Umbrella Movement Just Yet

Date: 17 January 2015

The Hong Kong Umbrella Movement, the city’s first significant and sustained extra-legal protest, provided a number of valuable lessons for the future. The civil disobedience campaign began at the end of September 2014, but did not achieve its primary goal of universal suffrage for the upcoming Chief Executive elections. 

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Kenya's vibrant economy poised for growth in 2015.

Falling global oil prices sparking Kenya’s economy to a vibrant growth

Date: 16 January 2015

Global oil prices are experiencing a free fall with the ultimate bottom resistance point predicted at $40 per barrel. Increased supply from all leading world oil producers is termed to be the core reason why we are experiencing the downward slide of the “black gold” prices. The ripple effect this has on the global economy has been accurately predicted to be a fall in fuel prices; which then leaves millions of consumers with additional savings to spend. 

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Few believe a Greek exit from the euro would be non-disruptive.

Is a Greek Exit from the EMU Still Possible?

Date: 16 January 2015

The Greek election is on January 25.  Syriza, the leftist party that seeks to negotiate more aggressively with the Troika and roll-back some of the austerity imposed appears to be maintaining its lead of 2-3 percentage points.  Even though it may win a plurality, heading up the next government is a different story.  That requires a majority of parliament. 

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Fallout continues in the wake of the SNB's move.

What to Make of the SNB's Move to Abandon the Franc Cap

Date: 16 January 2015

The market is still trying to make sense of yesterday's bombshell by the Swiss National Bank to abandon its franc cap, affirmed as an integral part of central bank's monetary policy a few short days ago.  Not only did this take market participants by surprise, but also apparently the IMF and the ECB. 

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Stricter controls will keep cities from expanding into farmland.

China Takes Steps to Separate City and Farmland

Date: 16 January 2015

China recently announced strict controls to stop big cities expanding on to neighbouring farmland. The Minister for Land and Resources Jiang Daming justified these controls by claiming that good farmland has been ‘eaten by steel and cement’. To safeguard food security, land on the outskirts of cities will be ‘permanent basic farmland’ that can be used only for cultivation. 

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The global tussle over oil continues unabated.

The Oil-Go-Round Keeps Spinning

Date: 15 January 2015

The price of oil has steadied in recent days after making new lows on Tuesday.  The March WTI futures contract approached its 20-day moving average earlier today (~$52.30) for the first time since late November.  This was a new selling opportunity as it has reversed lower.  We are looking for lower prices and it would not surprise us to see the price of WTI fall to the late-2008/early-2009 lows in the $32-33 area. 

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The Emerging Markets status update

An Emerging Markets Status Update

Date: 15 January 2015

The Reserve Bank of India (RBI) started the easy cycle with a bang. The decision by the Swiss National Bank to remove the cap on EUR/CHF could have some negative impact on Hungary and Poland. 

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The SNB eliminates a franc cap and India cuts rates.

Swiss and Indian Central Bank Surprises Rile Financial Markets

Date: 15 January 2015

Seemingly, out of the blue, the Swiss National Bank abandoned its cap in the Swiss franc (euro floor) and moved deeper into negative interest rates.  This has seen the Swiss franc rocket higher against the euro and dollar.  It sent the euro briefly below $1.1600. 

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South Korea's democracy faces internal and external challenges.

South Korea's Liberal Democracy is Under Threat

Date: 14 January 2015

It is not hard to list the domestic and international challenges for South Korea for 2015. There are many. At the end of 2014, South Korea faces economic slowdown, an ageing population, worsening socio-economic inequality, rising youth unemployment, mounting household debt and a real-estate market slump. The list of diplomatic tasks includes sluggish or worsening relations with Kim Jong-un’s North Korea, soured relationships with Abe’s Japan and coping with the dilemmas of China–US dynamics. 

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The EMU tide may be turning to favor debtors over creditors

Are EMU Debtors Getting the Upper Hand Over Creditors?

Date: 14 January 2015

The key axis in Europe is between creditors and debtors.  Each pushes their own interests.  The regime of austerity in Europe indicates that the creditors have had the upper hand.  However, two developments in the last two days suggest the tide is turning. 

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Low oil prices are good for only so long

Is Global Economy slipping on Oil Prices?

Date: 14 January 2015

Oil prices have raised concerns across the globe.  But the story of oil glut is not new. In 1980s, world price of oil rose at US$35 per barrel but fell to below US$10 per barrel by 1986. At that time the oil price collapse benefitted USA, Europe, Japan and the third world nations since they were oil- consuming countries. 

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Broad discretion for the ECB comes from the ECJ decision

Implications of the the ECJ Decision for the ECB

Date: 14 January 2015

The most important development today was the preliminary indications by the European Court of Justice that the ECB's Outright Monetary Transaction initiative was "in principle" consistent with the ECB mandate.  Even though the opinion by the Advocate General Villalon is non-binding, the signal is important. 

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Euro authorities will ignore the currency and Greece at their own peril.

Saving the Euro and Greece Should be Europe's Top Priority

Date: 13 January 2015

Greece is again making headlines, and markets are concerned the euro crisis is back. Actually, the crisis never left. It is just that for a little while both the authorities and the markets chose to cherish the delusion that policies and institutions were set in place that would shore up Europe’s troubled currency union. How wrong they were.

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Thailand's deep south is becoming a security crisis.

Thailand's Deep South is in a Deadly Struggle

Date: 13 January 2015

A quiet but increasingly deadly struggle is taking place in Thailand’s deep south. But why has the security crisis in the three southernmost insurgency-affected provinces of Yala, Pattani and Narathiwat proved so intractable and drawn out? 

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The euro, and even bitcoin, were touted as dollar alternatives.

Dollar Rivals Have Yet to Materialize

Date: 12 January 2015

The two main knocks against the US from global investors have been largely addressed.  The US budget deficit has been reduced from 10% of GDP to less than 3%.  The current account deficit has been halved.  Nevertheless, many observers, including some Americans themselves still think that the US is in an irreversible decline that affects all great powers. 

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Slow and steady growth defined Vietnam's economy in 2014

Steady as She Goes, Vietnam's Economy Improves

Date: 12 January 2015

The Vietnamese economy has stabilised but is growing below trend. In 2014, the economy relied principally on manufactured exports. The government seems to be pushing on with structural reforms of state-owned enterprises (SOEs) and the banking sector. But it remains to be seen whether its current efforts will be sufficient to restore economic growth in time for the country to transform itself into a high-income industrialised economy in the longer-term future. 

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A preview of the Emerging Markets

A Preview of this Week's Events Among the Emerging Markets

Date: 12 January 2015

EM is starting the week facing several familiar cross-currents.  The dollar is strengthening again, oil prices are still falling, but equities are moving higher.  This constellation seems to suggest a continuation of our call further weakness in EM, but for Asian assets to outperform in the short-term. 

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Market participants have a busy week ahead.

A Global Market Update, Economic News and Politics

Date: 12 January 2015

In thin Asian trading, with the Japanese markets closed for holiday, the US dollar's pre-weekend losses extended.  However, European participants took advantage of that pullback to buy more dollars.  A similar reversal of sentiment was evident in the equity markets. 

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Global challenges are mounting early in 2015

Updating the Big Stories Early in 2015

Date: 12 January 2015

The greatest risk to the divergence theme is not that the BOJ and ECB would abandon their unorthodox monetary policy.  It was that the consensus would swing against ideas that the Federal Reserve would raise rates near mid-year. 

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Singapore went from economic strength to economic strength in 2014

Interpret Singapore's Healthy Economy with Caution

Date: 12 January 2015

On the usual measures of economic prosperity, Singapore went from strength to macroeconomic strength in 2014. Real economic growth was between 2.5 and 3.5 percent for the year. The IMF forecast the world economy in October to have grown at 3.3 percent. Singapore continued to grow in importance as an ASEAN hub for RMB-denominated financial services, named for the ninth year running, the best global location for business and enterprise. 

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International pressures are taking their toll on Mongolia's economy

External Forces are Creating Mongolian Economic Headwinds

Date: 11 January 2015

The economy expects to grow by 7 percent in 2014. This is a healthy pace. But the majority of this growth has come from the mining sector, which experienced a significant boost from the production ramp up in the first phase of the Oyu Tolgoi project. 

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Currency movement was dramatic from the end of 2014 to present.

Tremendous Currency Movement from the end of Last Year into the New Year

Date: 10 January 2015

The US dollar turned in a mixed performance during the first week of the New Year.  It fell against the Antipodeans and yen but rose against the other major currencies. The dollar's performance against emerging market currencies was similarly mixed.  It rose against most but fell against the major non-restricted currencies, like the Turkish lira, the Mexican peso, and the South African rand.  Most importantly, the dollar finished the week on a soft note, and we expect this to continue into the week ahead. 

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The U.S. jobs report and other economic news from around the globe.

World Economic News and the U.S. Jobs Report

Date: 9 January 2015

The US dollar is slightly softer amid last minute position adjustments ahead of the US jobs data.  After the outsized 321k increase in nonfarm payrolls in November, expect a more trend-like report today. 

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The next move for the U.K. after Oil's price collapse.

U.K. Implications with $50 Oil

Date: 8 January 2015

Predicting oil price movements is as risky as exploring for oil itself. The average price for crude fell 10.3% from the start of 2014 to the date of the Scottish independence referendum on September 18. It fluctuated over this period – but few, if any, were predicting any major move in either direction in the months to follow. 

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Emerging Markets - where are they now?

Emerging Markets Status Update

Date: 8 January 2015

Over the last week, Russia (+10%), China (+1.7%), and the Philippines (+0.3%) have outperformed in the EM equity space as measured by MSCI, while Colombia (-7.0%), Hungary (-6.7%), and Czech Republic (-5.4%) have underperformed.  To put this in better context, MSCI EM rose 0.2% over the past week while MSCI DM fell -1.4%. 

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Vietnam shined in 2014 and now it's leaders hope to capitalize in 2015

Vietnam is on a Roll that Should Continue in 2015

Date: 8 January 2015

For Vietnam’s leadership, 2014 was another year of growing into a role as an increasingly active international player, both diplomatically and economically. Two events — the Haiyang 981 oilrig incident and TPP accession negotiations — gave Vietnam a place in the spotlight and shed light on a continued path for 2015. 

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Providing simple rights to CDS sellers would benefit lenders and borrowers

CDS Sellers Could Benefit from Having Lender's Rights

Date: 7 January 2015

In 2009, US trucking company YRC Worldwide faced ruin as it struggled to restructure its debt. With tens of thousands of jobs at stake, the Teamsters union, led by James Hoffa, accused some YRC bondholders of sabotaging restructuring negotiations by purchasing credit default swaps (CDS) on their debt. 

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Abe will likely need to be more realistic on matters in 2015

Komeito's Rise Signals a Japanese Political Shift to the Center

Date: 7 January 2015

The emphatic victory of Shinzo Abe and his Liberal Democratic Party (LDP) in the December 2014 lower house election masks a quiet power shift toward liberal-centre forces, away from nationalist right-wing forces. What this shift portends is a crucial question for the direction of Abe’s administration. 

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Officials fear Eurozone deflation for various reasons, but are they real?

Are Euro Area Deflation Fears Well-Founded?

Date: 7 January 2015

There are two main reasons why officials fear deflation.  First, it creates stress for debtors, and through that channel creditors.  Second, is that deflation could set off a downward spiral in demand as consumers hold back purchases, expecting lower prices. 

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Tensions are high in 2015 over a possible Greece-less EU

The Potential for a 'Grexit' - or Not?

Date: 7 January 2015

After Greek elections, Brussels and Berlin can no longer shun the issue of debt relief. Before the New Year, the Hellenic parliament rejected the nominee of Prime Minister Antonis Samaras for president. In accordance with the Greek constitution, a general election will follow on January 25. 

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Politics should dominate Vietnam in 2015 leading to 2016 elections.

Vietnam's Political Landscape in 2015

Date: 6 January 2015

Vietnam will begin 2015 on a fairly sound economic footing. The national economy has largely recovered from Hanoi’s ill-advised efforts to mitigate the impact of the 2009 Great Recession. That sobering experience exposed structural weaknesses which, left unfixed, could condemn Vietnam to languish in a middle-income trap, unable to realise the potential of its relatively young and well-educated population. 

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Indian's will have to wait and see if Modi switches to a new script.

India's Modi Ruling with an Old Playbook, but with Style

Date: 6 January 2015

The story of 2014 in India was the story of Narendra Modi’s rise from chief minister of Gujarat to prime minister of India. Son of a tea stall owner and once associated with the 2002 massacre of Muslims on his watch as chief minister, Modi electrified the electorate during a six-month campaign. 

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Some puzzle pieces point to a potential oil crisis in 2016

Are There Already Signs of an Impending Oil Crisis?

Date: 6 January 2015

Low oil prices today may be setting the world up for an oil shortage as early as 2016.  Today we have just 2% more crude oil supply than demand and the price of gasoline is under $2.00/gallon in Texas.  If oil supply falls too far, we could see gasoline prices doubling within 18 months.  For a commodity as critical to our standard of living as oil is, it only takes a small shortage to drive up the price. 

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A synopsis of what may come in 2015 for the world's largest economies

A Preview of What May Come in 2015

Date: 6 January 2015

2015 might be a very important year for many economies across the globe. Last quarter of 2014, saw many fluctuations in the economic indicators of different countries. While US ended 2014 with a good performance, Russia faced double trouble with falling currency and oil prices. 

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The fallout from low oil prices is spreading

Low Oil Prices, for too Long, May be a Bad Thing

Date: 6 January 2015

Oil prices are tumbling with Brent approaching $51 and WTI near $48.5.  This follows yesterday's announcement by Saudi Arabia of deeper discounts next month for the US and Europe.  This was a further confirmation that it adheres to its market share strategy. 

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Are 'fast-track' negotiations the only path to a trade deal?

Do Global Trade Deals Hinge on 'fast-track' Tactics?

Date: 5 January 2015

With the resounding Republican victory in November’s midterm elections, most pundits are despairing that Congress and President Barack Obama will find any areas for cooperation in the coming two years. If there is a potential bright spot of mutual interest, though, many believe it must be in international trade. 

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The Emerging Markets status update

A Preview of the Emerging Markets

Date: 5 January 2015

EM has started the year by extending many of the trends present towards the end of last year. The ruble is on the defensive along with Brazilian assets, while the Shanghai Composite continues to rally. The continued fall in oil prices will also ensure that the trading dynamics of importers vs. exporters will remain intact. But soon, we will be reaching the point in which secondary impacts will start to be counted as well. For example, the potential boost to the US economy from lower oil prices could counter some of the negative effect of lower energy exports for Mexico. 

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Xi Jinping is spearheading a diplomatic offensive

'Xiism' May be China's New Ideology

Date: 5 January 2015

It became clear in 2014 that Xi Jinping was the dominant leader of China. Even President Obama recognised this at the end of the year, stating that no recent Chinese leader had consolidated power as quickly as Xi since Deng Xiaoping. 

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Snap election may mean a third presidential term in Sri Lanka

Sri Lanka's Snap Election and Economic Reform

Date: 5 January 2015

Sri Lanka’s president, Mahinda Rajapaksa, has called a snap mid-term election on 8 January 2015, two years ahead of schedule, in a bid to win a third term in office. What was largely expected to be a one-horse race has quickly become a close run proposition, with the surprise entry of Maithripala Sirisena —the General Secretary of the president’s own Sri Lanka Freedom Party (SLFP), no less — as the common opposition candidate. 

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Are euro-politicians dragging the euro down?

Is the Falling Euro Merkel and Draghi's Fault?

Date: 5 January 2015

In very early Asian markets, participants responded to Draghi's sovereign bond buying hints, and Merkel's seeming willingness to let Greece leave EMU by sending the euro to a low of $1.1865, according to Bloomberg.  The thin conditions exacerbated the move, but the single currency has not been able to resurface above the $1.1980 area since. 

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Major investment themes remain intact at the start of the new year

The Strong Dollar, Low Energy Prices and Central Bank Moves Muddy Investing Waters

Date: 5 January 2015

The investment climate is being shaped by four forces: 1.  De-synchronized business cycle with the US ahead of the pack  2.  The prospects of sovereign bond purchases by the ECB, amid political uncertainty sparked by Geece's snap election  3.  The continued drop in energy prices is a stimuluative writ large but poses challenges for oil producers and the leveraged eco-system that has been built on the premise of high oil prices forever.  4.  Rather than a race to the bottom, as many saw it previously, several emerging market countries are resisting further depreciation of their currencies.

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First the WTO, next up is the AEC for Laos

Laos Commits to Realizing the AEC

Date: 3 January 2015

The accession of Laos to the World Trade Organization in 2013 was the latest in a series of steps towards achieving economic integration. The next milestone in its integration agenda is the establishment of the ASEAN economic community at the end of 2015. 

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Modi rose to power in an amazing political turnaround

Can India Capitalize on a Landmark 2014?

Date: 3 January 2015

India had a landmark year in 2014. A new political, cultural and economic reality is emerging.  The trend of political fragmentation that started with the general election in 1989 and saw a succession of coalition governments over the next 25 years reversed. 

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China needs junior partners with influence, like Russia

China's New Diplomatic Strategy Receives Support from Putin

Date: 3 January 2015

China is working to make the international order suit its interests better and put China front and centre in global affairs. Xi Jinping’s new diplomatic focus on multilateral diplomacy includes giving new profile to existing arrangements where China can lead, such as the BRICS and Shanghai Cooperation Organisation (SCO). He is also pushing his own initiatives, such as the Asian Infrastructure Investment Bank, while pursuing economic reform and military modernisation. 

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How do you measure the capacity of a state?

Measuring ASEAN State Capacity

Date: 3 January 2015

An embarrassing fact about ASEAN governments avoided in public policy discussions is that the capacity of most ASEAN states is quite limited — much more limited than they, and the international community, generally wish to admit. Until there is recognition of limited state capacity, it will be hard to understand the implications for public policy. 

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The KMT faced criticism for a host of economic woes

Taipei Should Look Within to Solve its Problems

Date: 3 January 2015

Politically and economically, 2014 proved to be an extremely bad year for President Ma Ying-jeou and his ruling Kuomintang (KMT) party. Economic stagnation and public discontent over worsening social disparities continue to plague Taiwan. Mass demonstrations indicate that Taiwan’s citizens have much more pressing concerns than Taiwan–China relations. 

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Constitution delivery missed, Nepal enters 2015 with guarded optimism

Nepalis Face an Uncertain, but Hopeful 2015

Date: 3 January 2015

A real political and economic turnaround could be just around the corner for Nepal in 2015.  The election to the Constituent Assembly on 19 November 2013 — that went off peacefully and with great voter turnout — saw Nepalis reject the myopia-infested politics of the Maoists who had come above ground after waging ten years of insurgency against the state. 

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The benefits of a stronger dollar in 2015 depend on your point of view

Movin' On Up - The Dollar is Poised to Continue its Ascendance

Date: 3 January 2015

The US dollar is poised to extend last year's rally.  The US economy is at least several quarters ahead of most of the other major economies.  Barring a major surprise, the Federal Reserve will likely hike rates around the middle of the year, while the economies in Europe and Japan need more stimuli. 

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Greece's potential EMU exit is fundamentally political, not economic.

Investor's Political Blind Spot on Greece

Date: 3 January 2015

The Greek political drama is overshadowing the Russian crisis and the plunge the price of oil.  A review of old and new media coverage suggests that many observers are repeating the same mistake they made 2-3 years ago. We were one of the few analysts that did not expect Greece to leave the monetary union then, and we expect it to remain in the union now. 

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The gap between the U.S. and other high-income countries remains.

New Year, Same Divergent Theme for the Dollar

Date: 3 January 2015

The US dollar began the New Year with strong gains against both major and emerging market currencies.  Comments from the BOJ's Kuroda and ECB's Draghi underscore the divergence between the US and other high-income countries.  The former discussed other tools useful to help achieve the BOJ's 2% inflation target. 

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Today's markets, the ones that are open, will be choppy in thin trading

The Dollar's Last Hurrah in 2014

Date: 31 December 2014

The US dollar is trading with a slightly heavier bias as the last minute position adjustment takes a toll. The dollar-bloc and Scandi's are doing somewhat better and sterling is a few ticks higher, while the euro and yen are straddling yesterday's closing levels in moribund activity. Several markets in Asia, including Japan and Korea, and Europe, like Germany, Italy, Switzerland, and Sweden for closed today for the holiday. 

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Brick and Mortar retailers have to step up their game for shoppers

Online Shopping versus Brick and Mortar Retailers - Fight!

Date: 30 December 2014

Department stores and other brick-and-mortar retailers registered another lackluster holiday shopping season, while online sales have remained upbeat since Cyber Monday. As more consumers spend a larger share of their dollars online, does this signal the days of shopping at department stores and shopping malls are numbered? 

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The job-killing accounting change depends on who you ask.

A Job-Killing Corporate Accounting Change?

Date: 30 December 2014

A modest change in an accounting rule is normally too much inside baseball to attract notice. But a proposal by the institutions that set accounting standards for publicly traded companies is prompting criticism from Congress and corporate America, backed by estimates that the change could kill millions of US jobs. 

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Foreign viewpoints of Ukraine differ greatly as do their investments

Foreign Direct Investment in Troubled Ukraine

Date: 30 December 2014

Domestic policy crisis, Crimea’s loss, war in the south-east of Ukraine, and Russia’s aggression amid the lack of any thorough economic reforms and a single decision making unit built-up in Kyiv have triggered Ukraine’s loss of direct foreign investment in the first nine months of 2014. Over this period, Ukraine has lost 16.6% of all direct foreign investments raised to the economy from the date of independence. 

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Abe's government takes steps to 'internationalize' Japan's universities

Japan's New Measures to Globalize their Universities

Date: 30 December 2014

Look at any global ranking of universities worldwide and Japan’s ‘big-name’ universities will feature in the top 100. University of Tokyo, for example, ranks well within the top 50 universities in the world for science and technology and sits at number nine among universities in Asia for overall performance in the QS rankings. 

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The Chinese wine industry is exploding, surpassing Australia

They Make Wine in China? Why Yes, They Do

Date: 29 December 2014

China’s wine industry has exploded in recent years, with the number of wineries more than doubling over the past decade, propelling the country past Australia to become the world’s 7th-largest producer. What is driving this fast-paced growth and is the quality of Chinese wine improving? 

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Using the price of oil as an economic weapon

Conspiracy Theories and the Price of Oil

Date: 29 December 2014

The oil price drop that has dominated the headlines in recent weeks has been framed almost exclusively in terms of oil market economics, with most media outlets blaming Saudi Arabia, through its OPEC Trojan horse, for driving down the price, thus causing serious damage to the world's major oil exporters – most notably Russia. 

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Even Myanmar's first census in 30 years was a learning experience

Myanmar's Democratic Transition is a Learning Process

Date: 29 December 2014

The story of Myanmar’s transition to a more democratic political system, and a more productive economy, is far from over.  Myanmar had a big year in 2014. The country held its first census in 30 years. The lead-up to the national count was plagued by criticism and uncertainty. 

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China's Xi Jinping has a lot of work to do in 2015

China's Challenges, though Daunting, are Surmountable

Date: 29 December 2014

As we count down the days and now the hours towards the beginning of 2015, what preoccupies most soothsayers of the outlook for the global economy in the coming year is the shape of the Chinese economy. Nudging the United States as the world’s biggest economy in real terms — measured in purchasing power parity it already accounts for 16 per cent of global output — anxiety about how long its growth rate, at more than twice the global average, might continue at this pace is on the rise. 

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A likely Syriza victory spells trouble for the Eurozone

Greek Election Fallout and European Asset Values

Date: 29 December 2014

The failure of Greek Prime Minister Samaras to secure sufficient votes in the third and final parliamentary attempt to select a new president has sparked a sell-off in European stocks and peripheral bonds.  Up until now, the contagion from Greece has been remarkably limited. 

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Technical indicators point to a bull market continuation in 2015

Technically, the Bull Should Continue into 2015

Date: 28 December 2014

The US dollar closed higher against all the major currencies during the holiday-shortened week. The lack of liquidity may have exaggerated the weakness of Swedish krona and Norwegian krone, the poorest performing major currencies.  Both lost about 1.5% against the greenback. 

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Switching to renewable energy is loaded with challenges for ASEAN

The Renewable Energy Alternative for ASEAN

Date: 27 December 2014

The view of the Southeast Asian region is an oasis of socioeconomic development. But the region’s vibrant economic growth has led to a corresponding increase in energy consumption, an issue recognised by ASEAN as a key shaper of the post-2015 agenda. 

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Has the ruble found a floor?

The Ruble's Slide Begins to Claim Banking Casualties

Date: 26 December 2014

The dramatic slide in the value of the rouble has claimed its first banking casualty. The Russian Central Bank, to the tune of US$530m, is bailing out Trust Bank.  The emergency liquidity line’s intent is as life support for one of modern Russia’s more established banks. 

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A note or two about the markets on Boxing Day.

Thin Trading and Closed Markets on Boxing Day

Date: 26 December 2014

In thin trading conditions, the major currencies are little changed.  The euro is straddling the $1.22 area.  It has held above the low seen earlier this week near $1.2165.   Since the low, the reaction high has been limited to the $1.2250 area.  For the third consecutive session, the dollar held above the JPY120 level.  It had reached a high earlier this week near JPY120.80. 

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A great review of 2014 and where the world's largest economies are going.

World Economy 2014

Date: 26 December 2014

2014 witnessed slow growth in the world economy. It tested economies of emerging markets and advanced economies. Economies like Eurozone, Japan and Russia saw some major financial shocks. On the other hand, when compared to 2013, advanced countries like USA improved their growth and raised their employment rate. 

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Modi's confidence-building is working in India

India's Modi Faces Challenges but Inspires Confidence

Date: 26 December 2014

India’s economy, which has languished in middling growth for the past few years, is on the mend under new Prime Minister Narendra Modi.  After experiencing real GDP growth of less than 5 per cent in 2013-14, the Indian economy is expected to grow at nearly 5.5 per cent in 2014–15 and then record growth rates in the 6 to 6.5 per cent range until about 2018. 

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Beijing can claim a battle victory, but what about the war?

With Occupy Central Over - Is Beijing Winning or Losing Hong Kong?

Date: 26 December 2014

On the morning of 11 December, in front of hundreds of cameras, police cleared the main protest site in Hong Kong. Ten 10 weeks of the pro-democracy Occupy Central movement, that at its peak attracted over 10,000 protesters, ended. Beijing can now happily claim a hard-won victory.  However, in reality, Beijing is losing Hong Kong. 

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SAARC is dragging its feet on economic integration

South Asian Countries Should not Wait for SAARC

Date: 25 December 2014

Since its inception in 1985, there have been questions about the effectiveness of the South Asian Association for Regional Cooperation (SAARC) to promote economic integration in South Asia. One of the biggest impediments to SAARC’s progress has been the continued conflict between India and Pakistan. 

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2014's main events were surprises and it can happen again in 2015

Will 2014's Divergence Theme Remain Intact in 2015?

Date: 24 December 2014

The most important events in 2014 were not anticipated.  At the end of 2013 and early 2014, parallels between 1914 and 2014 were focused on the disputes in the South China Sea, not Russia seeking to secure its sphere of influence in central Europe.  Expectations were that US Treasury yields, the key benchmark for global capital markets, would increase as the Federal Reserve slowed its purchases.  Instead, 10-year Treasury yields fell 115 bp and hit 1.85% in mid-October and were still trading a lowly 2.15% in early December. 

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Where will the LDP's opposition come from in 2018?

Japan's Tattered Political Opposition to the LDP a Blow to Democracy

Date: 24 December 2014

Prime Minister Abe’s decision to call a snap election paid off big time for him and for the Liberal Democratic Party (LDP). The LDP and its coalition partner the Komeito emerged from the election with its two-thirds majority in the lower house intact. In addition, Prime Minister Abe came out of it certain of reelection as LDP president next September and having every reason to believe that he will remain at the helm of the Japanese government until 2018. 

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Left unchecked, Asia's nutritional health may be in jeopardy

Asia's Next Potential Economic Crisis May Be Nutritional

Date: 24 December 2014

An important nutrition and health transition is unfolding alongside Asia’s economic transformation. Continuing income growth and changing patterns of food consumption among Asian economies are creating unintended effects on nutrition and health. These developments, if left unmanaged, will have long-term adverse impacts on health care budgets, labour productivity and economic activity. 

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Abe's opposition seems to have disappeared

The Promise of Something Better if Abenomics Works

Date: 23 December 2014

The 2014 Japanese election result was no more or less than a victory for the political status quo. All it did was reaffirm the Liberal Democratic Party’s (LDP) predominance and the opposition parties’ collective weakness. 

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Pakistan's new government has made little to no economic improvements

Pakistan's Energy Crisis is only Part of the Economic Malaise

Date: 23 December 2014

Prime Minister Nawaz Sharif inherited an economy in poor shape when his government came into power in 2013. The Pakistan Muslim League Nawaz (PML-N) government launched an economic plan in September 2013, with the financial and technical support of the IMF, to reverse the deteriorating macroeconomic picture. 

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There is market movement, but not much as the holiday approaches

A Tone of Consolidation Ahead of the Holiday

Date: 23 December 2014

The US dollar is narrowly mixed. The euro is pinned in a quarter cent range above $1.2220. The dollar is higher against the yen for the fifth consecutive session. It may be the first session since December 8 where the dollar spent the entire session above JPY120. 

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Cheap oil is only one of the global trade trends to watch in 2015

Important Global Trade Trends for 2015

Date: 22 December 2014

2015 has been designated the International Year of Light and the International Year of Soils by the United Nations. Marsala is the official pantone color of the year. On the Chinese calendar, 2015 is the year of the goat. What will 2015 mean for the world of global trade and supply chain? 

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Is there enough support to keep South Stream alive?

Is Russia's South Stream Pipeline Out of Gas?

Date: 22 December 2014

After seven years of planning, the South Stream pipeline that would carry gas from Russia to Europe via Bulgaria has been cancelled. After a long-running battle with the EU over the need for the pipeline and who would control it, Vladimir Putin announced that the project was over, in its planned form at least. 

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The Emerging Markets status update

A Preview of the Emerging Markets

Date: 22 December 2014

EM currencies stabilized after the FOMC meeting last week.  Yet the Fed clearly signaled that it remains on track to start hiking rates around mid-2015.  While Yellen’s guidance was taken as dovish (tightening won’t be at a predictable, “measured” pace), we still feel the looming Fed tightening cycle remains negative for EM.  Furthermore, commodity prices remain soft.  This and the upcoming turn in the US interest rate cycle should maintain downward pressure on EM currencies through H1 2015. 

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Japan's energy plan framework changed after the tsunami and earthquake

Japan's Strategic Energy Plan Challenges

Date: 22 December 2014

The Great East Japan Earthquake, the tsunami and the subsequent nuclear power plant accident in Fukushima on 11 March 2011 changed Japan’s energy future drastically. The revised Strategic Energy Plan, which the Japanese Cabinet approved in April 2014, outlines a new conceptual framework for Japan’s energy policy. 

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Currencies orbit the dollar while Russia, China and Greece's troubles continue

Global Currency Movement and other Economic News

Date: 22 December 2014

The holiday-shortened week has begun.  Some causes of consternation have eased.  Oil prices are firmer after the pre-weekend recovery.  The Russian rouble, where the focus has been greater than the exposure, has continued to recover following signs that China may be willing to offer it more assistance.  It is up 5.4% to bring its two-day recovery to 9%.  Rosneft spurred pressure on the rouble trying to secure $7 bln for debt repayment.  After it made the payment, the selling pressure on the share price and the rouble eased considerably. 

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Can Jokowi capitalize on optimism in Indonesia?

Economic Reality Versus Optimism in Indonesia

Date: 21 December 2014

A greater sense of optimism prevails in Indonesia about the economy in 2015 than a year ago, even though the reality is now more challenging. Growth is slowing, business costs are on the rise, and key economic vulnerabilities persist. In simple terms, the new government of President Joko Widodo (Jokowi) has been dealt a difficult hand of cards. 

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Investors bullish on the dollar are again on the right side of the trade

Bullish Dollar Bets Paying Off Again

Date: 21 December 2014

The powerful divergence theme re-emerged and effectively ended the dramatic correction throughout the capital markets. The FOMC statement strengthened conviction of a mid-2015 lift off, even if the pace of tightening may be somewhat slower than previously anticipated. At the same time, the Swiss National Bank's decision to move to negative interest rates, partly in anticipation of the ECB expanding its asset purchases as early as next month, underscores that Europe remains well behind the US in the credit cycle. 

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ASEAN members have been slow to adopt cyber policies

ASEAN Internet Penetration is Uneven, but Growing Fast and needs Direction

Date: 20 December 2014

ASEAN is at the moment drifting aimlessly in cyberspace. But it could take advantage of its own rapid growth in internet penetration and the harsh cyber-security lessons of other nations, to create an inclusive, coordinated and adaptive ASEAN Cyber-Resilience Blueprint — one that could be an international exemplar. 

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Cyprus - Who is to blame for the mess?

For Cypriots, a Glimmer of Hope?

Date: 19 December 2014

The nightmare for Cyprus started in March 2013. The country’s banking sector faced a sudden squeeze. The two biggest players – Bank of Cyprus and Marfin Laiki Bank – were in danger of a collapse which would have sparked a huge negative shock for the island’s economy. 

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Russia is facing many challenges, some out of their control

Russia - Caught in a Perfect Storm

Date: 19 December 2014

2015 might not be a very pleasant one for Russia. The country faces the worst of financial failures since 1998. The Ukraine conflict, exclusion from G8, western sanctions; a high inflation, falling GDP growth and rising unemployment had already been heating the economy. But with the falling oil prices and domestic currency losing its value, Russia got caught in a perfect storm. 

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Does the UK have a Moral Obligation to Hong Kong?

Will the UK Play a Part in Hong Kong's Future?

Date: 19 December 2014

China’s foreign ministry recent barring of a British parliamentary delegation from entering Hong Kong in response to pro-democracy protests has raised significant questions on the UK’s role in Hong Kong. 

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Only skilled workers are targeted for free movement among ASEAN countries

The AEC Needs to Include Unskilled Labor Migration Provisions

Date: 19 December 2014

By the end of 2015, the ASEAN Economic Community (AEC) expects to establish a single market and production base in the region. With an ASEAN overall workforce of more than 300 million people, the AEC will have strong implications in terms of labour migration and human resource development. 

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Currencies move among economic news and events

Global Currency Movement and other Economic News

Date: 19 December 2014

For many investors, today marks the end of the year, but it is ending on a favorable note. The combination of the FOMC meeting and the SNB adoption of negative interest rates underscored the dollar and equity bullish divergence theme. 

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Effects from the removal of U.S. sanctions will take time to see

A Cuban Economic Boom? Not so fast.

Date: 18 December 2014

The restoration of full diplomatic relations between the US and Cuba, announced simultaneously by Barack Obama and Raúl Castro yesterday, is a huge political breakthrough. The benefits to the Cuban economy, however, will be more gradual. 

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Abe was supposed to have some party oppostion

What Happened to Japan's Political Opposition?

Date: 18 December 2014

Last Sunday’s general election in Japan has returned Prime Minister Shinzo Abe’s Liberal Democratic Party (LDP) and its ally, the New Komeito, with a two-thirds majority in the lower house of the Diet. That the LDP would get a majority of seats was expected, as various polls had shown since Abe unexpectedly announced snap elections in November. Now the LDP holds 291 seats and New Komeito 35 in the 475-seat lower house. 

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Rural China is solving issues that the central government can't, or won't

'Middle China's' Informal, Private Economy is Thriving

Date: 18 December 2014

‘Benghai’ was changing. Returning to my old office, my home for ten years of fieldwork in rural China, it was clear something was amiss. Gone was the grizzled caretaker, listlessly following his mop around the ground floor of the four-storey building. In his stead was a bank of impossibly cheerful uniformed women in their early twenties. Their smiles could signify only one thing: real estate. 

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The Emerging Markets status update

An Emerging Markets Status Update

Date: 18 December 2014

Over the last week, Colombia (+9.5%), Mexico (+1.9%), and Chile (+0.1%) have outperformed in the EM equity space as measured by MSCI, while Hungary (-9.6%), Turkey (-7.3%), and Russia (-5.8%) have underperformed.  To put this in better context, MSCI EM fell -1.0% over the past week while MSCI DM fell -0.2%. 

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The Fed will eventually raise rates, but when?

Will the U.S. Fed Need to be 'Patient' for a 'Considerable Period'?

Date: 18 December 2014

The Federal Reserve upgraded its assessment of the labor market, and changed the future guidance from "considerable time" to "can be patient in beginning to normalize the stance of monetary policy."  The statement also draws a distinction between market-based measures of inflation expectations, which have fallen, and survey-based measures, which are stable.  We expect Yellen to indicate that the change in wording is not a change of intent. 

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A Syriza win in Greece would be a serious set back

Implications of a Syriza Win in Greece

Date: 17 December 2014

The Greek economy, after five years of recession, has nearly reached the top of the hill it has been climbing. But there is a real threat that in just a few months it will roll back down again. 

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Where are the highly skilled immigrants going?

Data Show an Alarming Drop in Highly Skilled Immigrants to the U.S.

Date: 17 December 2014

The United States has always been known as a nation of immigrants and a top destination for scientists and other highly skilled professionals. That ability to attract the world’s most educated and innovative people to its shores has often been credited with powering the US economy. 

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Reforms for the TTIP are necessary so that no one loses is a priority

EU and US Trade and Investment Partnership a Second-Best Approach

Date: 17 December 2014

Like the Trans-Pacific Partnership, the Regional Comprehensive Economic Partnership, and the Free Trade Area of the Asia-Pacific, the Transatlantic Trade and Investment Partnership (TTIP) between the European Union (EU) and the United States (US) is a second-best approach to trade and investment liberalization compared to a global agreement. 

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The furor over 'comfort women' will likely not abate soon

Japan's 'Comfort Women' Debate Casts a Long Shadow

Date: 17 December 2014

The Japanese media has been set alight by the debate on Japan’s use of ‘comfort women’ — a euphemism referring to the women used for sex by the Japanese Army in World War II. The furore began in August when Asahi Shimbun, Japan’s premier liberal newspaper, admitted that a source used in a number of articles it published on comfort women had fabricated his story. 

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Closer ties with ASEAN would benefit Australia

Australia - More ASEAN, Less U.S./China

Date: 17 December 2014

Things just haven’t clicked the way they should have in the Australian–ASEAN relationship. We seem far removed from the time when as Australia’s Foreign Minister I had no counterparts anywhere in the world with whom I felt more close and comfortable. And from when, at one of the Cambodian peace conferences, having stumbled inadvertently into an ASEAN foreign ministers’ coffee meeting, my apologies were waved aside with the words ‘Come on in. You’re one of us.’ 

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Russia's crisis worsens as the blame shifts to the West

Russia's Slippery Slope

Date: 17 December 2014

Winston Churchill famously said of Russian foreign policy that it was "...a riddle, wrapped in a mystery, inside an enigma."  What people leave out is what followed.  Churchill offered an answer:  "... perhaps there is a key. That key is Russian national interest." 

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What will the Fed say?

The U.S. FOMC Statement is on Many Minds

Date: 17 December 2014

The US dollar's recovery that began yesterday continues today.  The euro reached the 50% retracement objective of its slide since mid-October (~$1.2565) and now is more than a full cent lower.  The dollar's slump against the yen ended just above the JPY115.50 level, also a key technical retracement level.  The dollar's high today was JPY117.50. 

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Currencies move among economic news and events

Pressure on the Dollar, Possible Capital Controls in Russia, and other Global News

Date: 16 December 2014

The US dollar extended recent losses against the euro and yen.  Oil prices continue to swoon.  The price of Brent oil has fallen below $60 and WTI approached $54.  While most emerging market currencies are higher today, a notable exception is the Russian ruble.  Very early Tuesday in Moscow, the central bank hiked the key interest rate to 17% from 10.5%.  This follows about five days after the central bank hiked by 100 bp. 

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Lima is Climate Change Reform's Latest Best Chance

Will the Lima Conference Break the Climate Change Stalemate?

Date: 15 December 2014

For quarter of a century, global climate change talks have suffered from a stalemate between major advanced nations and large emerging economies. Since Lima’s climate conference could not resolve it, it deferred the divide to Paris 2015.  Recently, world’s leading nations gathered in Lima, Peru, for the 2014 U.N. Climate talks. The procedural objective was to develop the foundation for a new climate agreement that could be signed in Paris in December 2015 and that would take effect by the 2020s. 

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Japan's foreign aid charter is changing to reflect the times

Japan's Foreign Aid Program Turns 60

Date: 15 December 2014

2014 marks the 60th anniversary of Japan’s foreign aid program. The nation was still receiving World Bank aid when Tokyo began a modest foreign aid program through joining the Colombo Plan in 1954. Today, as one of the world’s largest donors, Japan is placing an increasingly explicit emphasis on foreign aid for the national interest. 

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South Korea's Park aims to keep middle-power status in the region

Maintaining South Korea's Middle-Power Status

Date: 15 December 2014

Are South Korea’s relations with China and Japan warming?  During the ASEAN Plus Three Summit in Myanmar in November, South Korea’s President Park Geun-hye proposed a trilateral summit with China and Japan. 

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New measurements of China's economy may mean a monetary policy change

Reasons for Adjustments to China's Monetary Policy

Date: 15 December 2014

Developments in the coming days will likely push the People's Bank of China into easing monetary policy the near-term.  Many have been looking for a follow up move since the PBOC surprised the market on November 21 by cutting interest rates for the first time in two years. 

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A Preview of the Emerging Markets

What's Up? - in the Emerging Markets

Date: 15 December 2014

EM currencies remain soft ahead of the FOMC meeting Wednesday.  The Fed is widely expected to modify the language in its forward guidance, which would be consistent with the first rate hike that is expected around mid-2015.  This would be unequivocally negative for EM.  Indeed, lower commodity prices and the looming turn in the US interest rate cycle are likely to maintain downward pressure on EM currencies well into next year. 

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Investors will have a busy week sorting news and data

Key Global Economic News Help the Dollar and U.S. Equities

Date: 15 December 2014

As the 24-hour session has progressed, the US dollar and equities have stabilized and turned higher.  Indeed as US traders prepare to return, stocks and the dollars are trading near session highs.  Oil prices are also trading higher.  Core bonds are a bit heavier, and the US 10-year yield has moved back above 2.10%.  News that Libya declared force majeure at two of its oil terminals appeared to have turned the oil market around.  It had continued to fall in the early hours the UAE warned it was prepared for oil prices to slump to $40 a barrel. 

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Big events this week include the U.S. Federal Reserve meeting

The Fed Meets, Oil Prices Plunge, Abe Wins and Greece is the Word

Date: 15 December 2014

The fundamental issue confronting investors is about supply and demand.  In recent weeks, as energy prices and other industrial commodity prices fell, investors focused on supply.  The stimulative effect of falling prices and the likely policy response by some major central banks, such as the ECB, and possibly the BOJ, was good for equity markets and weighed on the euro and yen. 

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Are the right people in charge in Ukraine?

Ukraine's Economy and the Technocrat Elite

Date: 12 December 2014

Ten years ago, it was received wisdom in western academic, business and policy circles that Ukraine was an archetypal “captured state” – a state owned and run almost entirely by a small, insecure and fabulously rich elite.  Of course, despite the cloak of academic respectability, the complaint from the West was not so much that the Ukrainian state was captured, but rather that it had been captured by the wrong people. 

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The AEC deadline is looming and likely won't be met by all members

The AEC's December 2015 Deadline - Too Soon?

Date: 12 December 2014

In 2007, the 10-member Association of Southeast Asian Nations (ASEAN) bloc adopted the goal of creating an integrated economic region—termed the ASEAN Economic Community (AEC)—by December 2015. However, concerns have been expressed that the regional integration project’s 2015 deadline will be missed due to an overly ambitious timeline and too many ill-thought-out initiatives. 

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OPEC's 2015 forecast is for continued weak demand

Plunging Oil and OPEC's 2015 Forecast

Date: 12 December 2014

The demand for oil in 2015 will drop to its lowest level since 2002 because of an oversupply of crude and stagnant economies in China and Europe, according to OPEC's latest forecast. And that's just one of several sour estimates.  

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Will any of the JIP's agricultural reforms leak into the LDP

Agriculture Reforms Unlikely to Come from Japan's LDP

Date: 12 December 2014

Only one party contesting this week’s Japanese election is advocating agricultural reform and it is not the LDP.  The party in question is the Japan Innovation Party (JIP). Its manifesto contains a series of measures that amount to a textbook prescription for agricultural reform. 

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Xi Jinping is the Chair of his government's internet policy group

China's Ambition versus Reality in the Digital Age

Date: 12 December 2014

In February 2014, Chinese President Xi Jinping was appointed Chair of the Central Cybersecurity and Informatization Leading Group, an agency which coordinates China’s cybersecurity and ‘informatisation’ policies. The move reflected deep dissatisfaction within the leadership of the pace of innovation in the country. Xi’s appointment reflects China’s willingness to change this — but only to an extent. 

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Oil and the Dollar Dominate the Global Growth Challenges

Global Challenges are Mounting as Oil Continues to Slip

Date: 12 December 2014

The US dollar is trading within yesterday's ranges against the major currencies. The Canadian dollar is the main exception. It is pushing lower still, with the greenback pushing a little beyond CAD1.1550. The main development today is the continued drop in oil prices. 

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Two noteworthy news items were the budget deficit and t-bill yields

The U.S. Budget Deficit and a T-Bill Yield High

Date: 11 December 2014

The markets have been more tumultuous than usual in recent days.  There were two important developments for investors, but many likely missed.  First, yesterday the US reported the November budget deficit.  Second, the US one-year T-bill rate hit a three-year high yesterday of nearly 23 bp. 

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The Emerging Markets are busy as are the Frontier Markets

A Review of the Emerging Markets

Date: 11 December 2014

Over the last week, Singapore (+1.5%), Hungary (+1.3%), and Malaysia (+0.1%) have outperformed in the EM equity space as measured by MSCI, while UAE (-12.7%), Russia (-10.5%), and Colombia (-9.3%) have underperformed.  To put this in better context, MSCI EM fell -4.2% over the past week while MSCI DM fell -2.0%. 

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The ECB needs to be more flexible

Notes on the Second ECB TLTRO Participation

Date: 11 December 2014

Today we learn of the participation of the second opportunity to borrow funds from the ECB under the Targeted Long-Term Repo facility.  Recall that this year's access was limited to 7% of a bank's loan book (loans to households and businesses excluding mortgages).  Next year's access is somewhat linked to growth of that loan book. 

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Market stabilization factors are fighting the big moves

Market Participants Attempt to Smooth Big Moves

Date: 11 December 2014

The markets have been subject to large moves in recent days.  Some, including the dollar, were counter-trend moves.  Some, like oil, were accelerations of the existing trends.  There have been a number of surprise developments today, including the less dovish Reserve Bank of New Zealand and the 25 bp cut from Norway's central bank.  The markets are trying to stabilize, and the dollar's correction appears to have exhausted itself. 

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How are the BRICS in 2014?

A 2014 Health Report on BRICS

Date: 10 December 2014

In 2001, the term BRIC was coined by Jim O'Neill, formerly with Goldman Sachs, who had used the acronym in his thesis on emerging markets of Brazil, Russia, India and China. With inclusion of South Africa in 2010, BRICS was formed. It started to reflect the strength of the emerging markets across the globe. 

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Is raising Japan's consumption tax the answer?

Calls for Abe to Raise Japan's Consumption Tax

Date: 10 December 2014

Japan’s Prime Minister Shinzo Abe dissolved the lower house of the Diet on 21 November and called a snap general election on 14 December. At the same time, Abe announced that he would postpone the second hike of the consumption tax rate from 1 October 2015 to 1 April 2017. 

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Can Indonesia's new President boost growth and reverse income inequality?

Joko Widodo's Great Opportunity for Indonesian Economic Policy Reform

Date: 10 December 2014

Economic performance in post-Suharto Indonesia has been inferior to that achieved during the previous three decades, with economic growth slower and income inequality increasing. With the recent election of a new president, now is a good time to focus on improving the quality of economic policymaking. 

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Japan has a demographic challenge that could be an opportunity

Will Japan Seize a Demographic Opportunity?

Date: 10 December 2014

Japan is ageing; shrinking population will cause serious problems for the country throughout the 21st century. Although the fertility rate has recovered to 1.39, this is still very low by international standards. 

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The South China Sea is an important place for U.S. policy

U.S. Policy Supports Freedom of Navigation in the South China Sea

Date: 10 December 2014

The South China Sea is not the central strategic element in the overall US–China relationship. It was clearly not a centrepiece of the November 2014 Obama–Xi summit in Beijing. Climate change, North Korea, Iran, Taiwan, trade, intellectual property theft and cyber security are more important bilateral issues. 

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The upcoming Greek election could determine EU membership

Will Greek Politics Trump Principles in Upcoming Elections?

Date: 9 December 2014

Many global investors limited to investment grade markets or developed markets, as defined by MSCI have no direct exposure to Greece.  Nevertheless, recent developments in Greece are worrisome to investors.  Many fear that the political challenges in Greece could lead to its ultimate exit from the monetary union and default. 

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The dollar reverses course against the yen, but for how long?

A Rare Dollar U-Turn, but Persistent Themes Remain Intact

Date: 9 December 2014

What can't go up forever apparently will not and today has seen a couple violent moves.  The dollar, which has risen by more than 10% against the yen since the BOJ surprised with a 5-4 vote to accelerate its already aggressive monetary easing on October 31, rose to new multi-year highs yesterday just shy of JPY122 only to sell off to almost JPY119.50 today.

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Modi charts a course for the Indian diaspora, state and local goverments

Prime Minister Narenda Modi's Diplomatic Path within India

Date: 8 December 2014

India’s Prime Minister Narendra Modi is seeking new ways to enhance India’s global diplomacy. Modi is pursuing two paths largely overlooked by analysts of India’s foreign policy: to connect with the Indian diaspora and to encourage links with subnational governments at state and city levels. 

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How will the LDP do in Japan's election?

A Very Short Campaign in Japan is Underway

Date: 8 December 2014

As the official election campaign rolled out last week, the media are still trying to get a handle on what the upcoming Japanese election is all about. This is ‘the election Japan didn’t need to have’ or the election ‘that’s not about anything in particular’, except securing Prime Minister Abe’s and the Liberal Democratic Party (LDP) survival in the longer term. 

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Abe will likely win, so say the odds

Abe's Calculated Move to Stretch a Political Career

Date: 8 December 2014

The incumbent Liberal Democratic Party (LDP) seems to be cruising towards a victory in the snap election to be held on 14 December. But beware of interpreting this as a ringing endorsement of Prime Minister Shinzo Abe. Instead, the likely result shows just how weak Japanese politics has become. 

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Bangladesh has made progress, but has a ways to go

Should the Progress in Bangladesh Come as a Surprise?

Date: 8 December 2014

Bangladesh’s economy has recorded remarkable economic performance in the new millennium, though its per capita income has remained low. Even more spectacular has been the steady improvement in its levels of many social development outcomes. Popular commentaries have drawn comparisons with India and Pakistan in highlighting the significance of Bangladesh’s development achievements. 

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The Emerging Markets Review

This Week in the Emerging Markets

Date: 8 December 2014

Falling commodity prices and better US economic data are the biggest macro drivers for EM, overriding just about all idiosyncratic variables – perhaps with the exception of the weaker yen for Korea. We note that aside from the huge fall of over 40% in the price of Brent oil from its highs, iron ore is down about 50% this year. Brazil, China and India are the biggest EM producers of iron ore. 

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China and Japan release disappointing economic data

China and Japan's Economic Data Does Not Impress

Date: 8 December 2014

The new week has begun with two macro-economic disappointments.  First, after the recent capex data, economists had expected Japan's 0.4% quarterly contraction in Q3 to be largely revised away.  However, the actual report came out worse, showing slightly deeper contraction (-0.5%).  Moreover, this was due primarily to the downward revision in business spending to -0.4% from -0.2%.  The consensus had expected an upward revision to 0.9%. 

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The financial markets have a lot to digest in the coming week

Some Things to Think About in the Coming Week

Date: 7 December 2014

Developments in the week ahead will be understood within the context of last week's developments.  The most important of these are the strength of the US jobs report and cuts in growth and inflation forecasts by the European Central Bank and the Bundesbank. 

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Will the latest RCEP meeting result in a new paradigm?

Will Meaningful Changes Come from the Latest RCEP Negotiations?

Date: 6 December 2014

What will it take to change the way Asia thinks about trade strategy?  As the negotiators of the RCEP agreement are meeting in New Delhi, India, from 1–5 December 2014, attention is turned to the question of whether this mega-regional represents a ‘new paradigm’ of regional trade agreements or not.

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Differing strategies between China, Japan and South Korea challenge their FTA

Complicated Geopolitics Challenge an Asian FTA

Date: 6 December 2014

The fifth round of the China–Japan–South Korea Free Trade Agreement (CJK FTA) negotiations concluded in Beijing on 5 September. The three countries hope the negotiations will finish in 2015, but this partly depends on the progress of the Trans-Pacific Partnership (TPP) negotiations. 

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Electronic banking is the way forward for most customers

The Digital Connection Between You and Your Bank

Date: 5 December 2014

Banks have evolved over a period of time and have tried their best to remodel themselves with changing times and remain in sync with their customers’ needs. With practically everything online from buying books to getting air tickets, banks are trying hard to live up to the customers’ expectations that are mostly technology driven. 

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Fallout and reaction to the U.S. jobs report and other economic data

The Dollar, ECB, Yen, and Oil Remain Firmly Entrenched in the News

Date: 5 December 2014

The US dollar changed little against most of the major currencies but is taking another step up against the yen.  The failure of the Democrat Party of Japan to mount a serious challenge to Abe, despite the quite divided public support for Abenomics, is leading to surveys that the LDP and Komeito coalition will retain the super-majority they now enjoy.   This has been the latest excuse to push the yen lower.

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The job report isn't what it used to be

A Backstory on the U.S. Jobs Report

Date: 5 December 2014

If there was one report to count on to shake up markets, it was the monthly US jobs report.  Part of the issue was that of all the economic data that the US reports, economists had the greatest difficulty in forecasting the monthly change in non-farm payrolls. 

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Changes and developments among the Emerging Markets

An Emerging Markets Review

Date: 5 December 2014

Over the last week, Czech Republic (+2.1%), the Philippines (+1.9%), and Poland (+0.1%) have outperformed in the EM equity space as measured by MSCI, while Brazil (-8.5%), Russia (-7.8%), and Malaysia (-6.9%) have underperformed.  To put this in better context, MSCI EM fell -2.5% over the past week while MSCI DM fell -0.4%. 

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India could stand to review its bilateral investment treaties

India's Bilateral Investment Treaties Leave Room for Abuse

Date: 4 December 2014

In December 2013, despite an ongoing official review of its existing agreements, the Indian government signed a bilateral investment treaty (BIT) with the United Arab Emirates. Information on the deal was recently made public by the Ministry of Finance after persistent efforts by civil society groups. 

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No new initiatives by the ECB

Expectations Met by ECB Inaction

Date: 4 December 2014

The ECB has not announced any new initiative.  It stands ready to do more next year, but there was no specific mention of sovereign bond purchases.  There was no tweaking of the second TLTRO which will launched next week.   The staff did cut the forecasts for growth and inflation, but Draghi acknowledged that the forecasts do not incorporate recent drop in energy prices. 

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Hyman Minsky's view on the oil market would be interesting

The Oil Market - What Would Minsky Do?

Date: 4 December 2014

During the Great Financial Crisis, Hyman Minsky, was rediscovered.  Minsky's insight was that long periods of steadily rising asset prices encourages financial engineering and leveraged bets that assume a continued rise in asset prices.  The so-called Minsky moment comes when the asset prices stop rising and even fall.  The virtuous cycle turns vicious. We are now all familiar with how that narrative played out in the housing markets in numerous countries.  The question we pose is whether similar forces are unfolding in the oil market. 

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Falling oil prices could create the next financial crisis

Oil, Junk Bonds, and Maybe the Next Financial Crisis

Date: 4 December 2014

The oil and gas boom in the United States was made possible by the extensive credit afforded to drillers. Not only has financing come from company shareholders and traditional banks, but hundreds of billions of dollars have also come from junk-bond investors looking for high returns. 

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ECB meets, but what will they decide?

Mario Draghi Takes Center Stage

Date: 4 December 2014

The ECB meeting or more precisely, the press conference is the main event of the day, and possibly of the week and month.  ECB President Draghi and Vice President Constancio have expressed heightened urgency to boost inflation as fast as possible. 

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Several companies are investing large sums in the Montney

The Montney Shale is Heating Up in the Cold of Canada

Date: 3 December 2014

What does it take to build up a new region for oil and gas development? Obviously, the resources have to be in place and economically recoverable. But it is not as easy as just sticking a drill into the ground and pumping out oil and gas. 

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Brazil is out of a recession for now

Brazil's Cautionary Tale of Economic Woe and Recovery

Date: 3 December 2014

If Brazil has ever suffered from a financial turmoil, it mostly has been more of a contagion effect like the 1997 Asian Crisis and 1998 Russian Crisis.  It has been considered one of the strongest emerging markets and a large contributor towards global growth. 

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A lack of Bitcoin trading may be by design

What's Next for Bitcoin?

Date: 3 December 2014

Throughout 2014, financial traders around the world have been enthusiastically taking to bitcoin as a new area for speculation. Analysts, commentators and investors have all ensured that 2014, for investments at least, may well be remembered as the year of the bitcoin. 

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Outdated regulations and customs procedures are holding back the Philippines

Philippine Economic Growth Hinges on Needed Reforms

Date: 3 December 2014

The forthcoming ASEAN Economic Community (AEC) could help drive economic reform in the Philippines. But policymakers will have to embrace what could be difficult reforms and realise that ignoring them would raise the threat of being bypassed (again) by investment and foreign capital seeking opportunities in the Philippines. 

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Myanmar's current regime as a unified entity is shaky

Could Myanmar's Democratic Future be in Jeopardy?

Date: 2 December 2014

With one year remaining before Myanmar’s general election there is growing concern, both internationally and domestically, that the reform process is at best beginning to stagnate and at worst rolling back in some critical areas. 

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China's rise on the international stage has mixed reviews

China's International Relationships and How They are Playing in Asia

Date: 2 December 2014

One day in June 2013, President Xi Jinping and his wife and First Lady Peng Liyuan touched down in Trinidad and Tobago. As the pair embarked the aircraft and strode down the gangway, there was something unmistakably ostentatious — a swagger even — in Peng’s turquoise attire and Xi’s matching tie. It marked a shift in China’s approach to international relations. 

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Are countries depreciating their currencies to boost growth?

Currency Depreciation as Monetary Policy

Date: 2 December 2014

The latest surge of currency war stories follow the unexpected decision by the Bank of Japan to dramatically increase its Qualitative and Quantitative Easing at the end of October.  It was the same week that the Federal Reserve announced the end of its asset purchase operations.  Since the BOJ's decision, the yen has depreciated by 8.3%. 

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Four central banks meet during a light economic news week

Central Bank Meeting Week Continues

Date: 2 December 2014

The Reserve Bank of Australia was the first of four major central banks that meet this week.  The Bank of Canada meets tomorrow, followed by the BOE and ECB on Thursday. 

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China's SOE's face new challenges

China's State Owned Enterprises Face New Challenges

Date: 1 December 2014

The relationship between the state and economic enterprise is a central choice that governments have to make in all economies. The role of the state and state-backed or state-owned enterprise in Asia’s economic modernisation is a question of special interest. 

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The OPEC cartel is no longer the same heavyweight

OPEC Forced to Change its Tactics

Date: 1 December 2014

OPEC is a cartel but it is a strange species in the sense that it only accounts for about 40% of oil production.  In the past exerted its influence by cutting production, as in 2008, and driving up prices.  Now it faces a different challenge.  New supply has come on the market, which threatens the cartel's position. 

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Currencies move among economic news and events

Monday Market Moves and More

Date: 1 December 2014

The US dollar is mostly softer as North American participants prepare to return from what, for many, was a long weekend. The greenback had initially moved higher, hitting JPY119.15 while the euro slipped to $1.2420.  The proximate cause was the continued fall in oil prices and news that Moody's cut Japan's credit rating to A1 from Aa3. However, the dollar shed its gains in the European morning. Falling equity markets sent the dollar to almost JPY118, and the euro recovered to almost $1.2480. 

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Three investment themes explain many countries economic condition

Three Investment Themes Perpetuate and are Strengthening

Date: 1 December 2014

Throughout the last few months, we have identified three forces that are shaping the investment climate:  the economic and monetary divergence that favors the US, the decline in commodity prices, and a slowing of China. These forces remain intact.  If anything, they have strengthened and reinforced each other. 

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Chinese economic growth is not state dominated

Misconceptions about China's Economic Growth Sources

Date: 30 November 2014

Virtually every dimension of China’s economic success over the past three-and-a-half decades can be attributed largely to the rise of markets and private businesses. Private firms account for almost all the growth in employment, most of the expansion of output and investment in manufacturing, and in recent years for over half of the growth in exports. 

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The upcoming week features several central bank meetings

Currency Movement and a Review of the Upcoming Week

Date: 30 November 2014

The US dollar has been consolidating for the past couple of weeks, and that phase appears to be ending.  Next week's economic data and events will likely underscore the divergent theme, which works in the dollar's favor. 

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Thai's Prayuth looks nearby and abroad for economic partners

Economic Development on the mind of Thai Prime Minister Chan-o-cha

Date: 29 November 2014

The recent state visit by Thai Prime Minister Prayuth Chan-ocha to Cambodia represented part of the Thai military government’s uphill diplomatic battle to build and strengthen its legitimacy abroad. This visit occurred amid mounting diplomatic pressures from Europe and the US, calling for a rapid return to democracy. 

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Emerging markets highlights include China, Malaysia, and Nigeria

Emerging Markets Over the Last Week

Date: 28 November 2014

1) Oil prices have taken another sharp leg down.  2) The People’s Bank of China surprised the markets with rate cuts last Friday.  3) Malaysia cut fuel subsidies just days after Indonesia’s new President Joko Widodo took similar measures. 4) Nigeria devalued the naira, moving the peg rate and widening the band around that rate to +/- 5% from +/- 3% previously. 5) Joaquim Levy will be the new Finance Minister for Brazil. 

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The financial markets digest OPEC meeting results and the Eurozone reacts

OPEC Meeting Fallout, Japan and Eurozone Repercussions

Date: 28 November 2014

OPEC's decision to roll-over existing quotas sent oil prices sharply lower, pushed European bonds and stocks higher, and generally gave the U.S. dollar a boost.  Today's theme is more consolidative in nature.  At the same time, the dollar's firmer tone against the yen helped lift the Nikkei while European stocks and bonds are struggling to extend yesterday's advance. 

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Important information for market participants on Black Friday

OPEC's Meeting Results and Eurozone Inflation Numbers

Date: 28 November 2014

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.  Next, the drop in oil prices will exacerbate the Eurozone concern about price stability that characterizes low inflation.

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State-owned enterprises are competing for global investments

Competition for Global Investment Coming from State-Owned Enterprises

Date: 27 November 2014

State-owned enterprises have played a relatively minor role in the era of investment-driven globalisation that began in the 1970s. As recently as 2007, when annual flows of foreign direct investment by multinational enterprises reached a record US$2 trillion, state-owned enterprises were sitting on the sidelines, accounting for only 3–4 per cent of international mergers and acquisitions, the main vehicles multinational enterprises use to acquire and control international operations. 

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Japan's snap election is only part of Abe's challenges

Shinzo Abe's Challenges Go Beyond the Upcoming Election

Date: 26 November 2014

When Abe dissolved the lower house on 21 November 2014 and called a snap election for December, top leaders in the Liberal Democratic Party (LDP) and New Komeito identified keeping 270 seats as the low-water mark, which would represent a loss of 56 seats. 

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Sri Lanka is interested in a strategic relationship with China

Sri Lanka Becoming China's New Best Friend?

Date: 26 November 2014

A sea change is occurring in Sri Lanka’s strategic orientation. Recent developments suggest that Sri Lanka is becoming China’s new best friend and security partner in the eastern Indian Ocean. This would represent a major change in Sri Lanka’s foreign policy and could have significant consequences for regional security. 

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A little history lesson to explain the economic reality in Japan

History Helps Explain Japan's Current Woes

Date: 26 November 2014

Japan's economy and its lost decades are no more news to us. When Japan was hit by its first real estate collapse, little did it know that its revival would take forever. Many criticized the reforms that were taken and many critics suggested ways to fix the problem of deflation that faced the country. 

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OPEC's market share and influence is waning

OPEC's Existential Crisis

Date: 26 November 2014

In the middle of November, the CEO of Vodafone Vittorio Colao warned of a "prisoner's dilemma" in the efforts to offer bundled television and broadband services. 

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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

Date: 26 November 2014

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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Fracking has created a huge demand for a specific sand

The Demand Surge for 'Frac Sand'

Date: 25 November 2014

When it takes up to four million pounds of sand to frack a single well, it’s no wonder that demand is outpacing supply and frack sand producers are becoming the biggest behind-the-scenes beneficiaries of the American oil and gas boom. 

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The 'Invest in Europe' initiative will be highly leveraged

Expanding the ECB Balance Sheet Will Take Time

Date: 25 November 2014

EC President Juncker is set to unveil a new investment program.  It sounds good:  a fiscal complement to the monetary policy stance of the ECB.  Expectations are running high that the ECB will move to more aggressively expand its balance sheet, record low bond yields in many euro area countries, and negative 2-year yields in at least five countries and below 5 bp in another three countries. 

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China's global leadership aspirations come into focus

China Aims High

Date: 25 November 2014

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?

Date: 25 November 2014

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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There is some news like U.S. GDP revision, but overall a light news day

The Economic Data Stream Flows On

Date: 25 November 2014

The U.S. dollar remains within recent ranges against the euro, yen and sterling.  The antipodean currencies fell, and that is where the movement is today.  The main impetus is from a downgrade in the Reserve Bank of New Zealand's inflation expectations, and momentum players selling the Aussie on the break of $0.8600. 

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A new day for Australia and India in diplomatic relations

Modi Breaks a Trend and Visits Australia After the G20 Summit

Date: 24 November 2014

Seven Indian prime ministers from across the political spectrum and spanning three decades have come and gone without paying a state visit to Canberra, a record broken only now with Prime Minister Narendra Modi’s recent visit to Australia following the Brisbane G20 Summit. 

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China flexed its muscles at APEC with FTAAP

FTAAP Revival is China's Signature Trade Initiative

Date: 24 November 2014

The 2014 APEC leaders’ summit witnessed a string of successes in Chinese trade diplomacy. Key among these successes was the endorsement of China’s signature trade initiative as APEC host: the realisation sooner rather than later of a Free Trade Area of the Asia Pacific (FTAAP). 

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Eurozone and Asian economic data highlight emerging market news this week

A Preview of this Week's Events Among the Emerging Markets

Date: 24 November 2014

If markets can now add to the continued rally in equity prices, we should get a supportive environment for EM assets in the near-term. Longer-term, we are not as constructive. The Fed rate hike looms ahead, while we remain skeptical that China growth will respond in any significant manner to the latest rate cut. 

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Euro steady while the dollar stays strong

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

Date: 24 November 2014

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. 

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The interconnected world of politics and economics

One Cannot Separate Politics and Economics

Date: 23 November 2014

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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This week begins a new market phase without QE3+

The Dollar Appears to be Back on Everyone's Wish List

Date: 23 November 2014

A new phase in the markets began this month.  The Federal Reserve ended its QE3+ purchases.  The Bank of Japan unexpectedly and dramatically stepped up its asset purchases under its QQE operations.  The government's largest pension fund announced aggressive portfolio diversification plan. 

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

Global Summits, Global Hopes

Date: 22 November 2014

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. 

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The Hong Kong protests haven't been followed by much progress

Hong Kong Stalemate Still Firmly in Place

Date: 22 November 2014

After weeks of protests, the protracted stalemate in Hong Kong doesn’t appear to be over. While the Occupy Central movement has brought together civil society groups to protest for democratic change, the movement lacks active participation from the political side. Progress cannot be made unless the Occupy Central movement engages with the political community. 

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Russia the latest power to pivot to Asia

Russia's Focus is now a Pivot to Asia

Date: 21 November 2014

The United States’ “pivot to Asia” has been intensely discussed over the last years. But recently, a new pivot model has come up: the Russian Federation’s pivot to Asia. This article analyzes this topic from an economic perspective by asking: Is the Russian economy really about to shift its focus thus far centered on the European Union (EU) to Asia? 

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New Zealand's opportunity with the AIIB is not without risks

New Zealand Has a Great Opportunity with the AIIB

Date: 21 November 2014

The AIIB presents an opportunity for New Zealand to amplify its impact in the region. Though not a member of the AIIB, New Zealand is in a prime position to help manage future Pacific projects that attract AIIB backing. New Zealand’s small size and relative lack of geopolitical alignment allow it to pursue partnerships with both the US and China, while experience working in the Pacific makes its input on projects valuable. 

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The most recent Bangladeshi election was partisan per election watchers

Bangladesh Breaks from Tradition with Recent Election

Date: 21 November 2014

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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Global Economic News and Currency Movement

Draghi and Aso Speak, and Other Global Currency News

Date: 21 November 2014

Official comments have injected volatility into the foreign exchange market.  As we anticipated, Japanese officials pushed back against the seemingly free-fall in the yen sparked by the aggressive BOJ action and the diversification of the government pension funds.  In the European morning, at a banking conference in Frankfurt, the ECB's Draghi expressed a sense of urgency that heightens the risk of fresh action as early as next month.

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South Koreans and their rights in Cyberspace

A Cyberspace Lesson from South Korea

Date: 20 November 2014

Over 3 million South Koreans have downloaded a Germany-based smartphone messenger app, Telegram, while 400,000 users of Kakao Talk — the nation’s most widely used messenger app — terminated their account, in protest against government attempts to crackdown on dissenters. 

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Japan's recession could have a long-lasting impact

Has Japan Entered a Third Lost Decade?

Date: 20 November 2014

Japan’s recession is not paving way for sustained growth. It is prolonging new debt and liquidity and thus deteriorating fiscal discipline.  In the last quarter, Japan’s economy fell into recession. In the West, it was characterized as “unexpected.”  The realities are precisely the reverse. With its third ’lost decade,’ Japan has entered an era of massive monetary expansion that it not adequately supported by the fundamentals of its economy. 

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Emerging market news from around the globe

The Latest in the Emerging Markets

Date: 20 November 2014

In equity markets this week, Russian (+1.8%), Turkey (+1.6%) and Taiwan (+1.3%) outperformed. South Africa (-2.7%), Argentina (-2.3%) and China (-1.3%) underperformed.  In the local currency fixed income space, longer-dated yields rose the most in Colombia (+6 bp), Poland (+6 bp) and Malaysia (+5 bp), and fell the most in Turkey (-37 bp), Brazil (-33 bp) and South Africa (-15 bp).

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An abundance of economic data will keep the markets busy

Eurozone Divergences, Weak Commodities and China Slows Down

Date: 20 November 2014

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. 

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FOMC minutes lacked drama as currencies moved to other data

Thoughts on the Fed, Economic Data and Currency Action

Date: 20 November 2014

The FOMC minutes were not very surprising. The FOMC is not in any hurry to raise interest rates before the middle of next year at the earliest.  The FOMC statement did not drop the "considerable period" phraseology to describe the time between the end of QE and the first rate hike.  However, the minutes show it was a point of discussion and a compromise was achieved to emphasis the data dependency of the Fed's actions. 

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Abenomics may only be part of the snap election's decision

Did Abenomics Fail Shinzo Abe?

Date: 19 November 2014

The decision by Japan’s Prime Minister, Shinzo Abe, to call a snap election barely two years into a four-year term demonstrates a degree of political flexibility other world leaders can only envy. 

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Abbott reaches out to Jinping at APEC and the G20 summit

Australia's Abbott Reaches out to Jinping - Twice

Date: 19 November 2014

Forget shirt-fronting Russian President Vladimir Putin. Australian Prime Minister Tony Abbott’s most challenging task in the summit season was breaking an uncomfortable silence with Chinese president Xi Jinping. And he had to do it twice: first at the APEC meeting in Beijing and again at the G20 in Brisbane. 

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The run on the yen continues as the markets react to Japan

Economic News and Shifting Currencies

Date: 19 November 2014

The run on the yen continues.  The US dollar and euro are at new multi-year highs against the yen.  The BOJ confirmed its JPY80 trillion monetary base target unexpectedly adopted at the end of last month.  Last month's seemingly last minute decision was based on a very un-Japanese 5-4 vote.  Today, three of the dissents accepted the fait accompli; one did not (Kiuch). 

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Is Cameron Focusing on the Correct Economic Indicators?

Did Cameron's Comments Portend Another Financial Crisis?

Date: 18 November 2014

Taken at face value, David Cameron’s warning this week about risks in the global economy sounds like it might be wonderfully prescient.  Here’s the country’s economic chauffeur, carefully checking his instrument gauges, and sure enough, sees the same signs today that should have given us warning of the crisis of 2007-08.  Time to apply the brakes. 

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The Stock Connect Link is a big opportunity for China

The Stock Connect Link Between China and Hong Kong

Date: 18 November 2014

A direct link has been established between Hong Kong and Shanghai’s stock exchanges. The so-called Stock Connect means investors in Hong Kong can now buy shares listed on the Shanghai Stock Exchange via their local brokers and vice versa. 

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Oil's decline has meant long accumulation

It Shouldn't be a Surprise that Speculators are Long Oil

Date: 18 November 2014

Oil prices have declined for the better part of the past five months.  The unexpected contraction in the Japanese economy in Q3 underscores that the strong supply growth is taking place amid weakening demand.  OPEC's meeting is still ten days away.  Remember that OPEC oil is mostly the heavy sour variety, while the US shale product is mostly light sweet.  This means that even if OPEC can agree and implement a cut in output, it may not have as much impact on the US benchmark WTI as it may appear. 

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International economic influences leave the dollar mixed

International Forces Leave the Dollar Mixed

Date: 18 November 2014

The overall theme today appears to be one of consolidation, encouraged by European data, which included a slightly higher than expected UK CPI and a considerably better German ZEW survey.  Japan's Prime Minister Abe has not disappointed the market, delaying the sales tax hike and calling for elections next month. 

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Can the U.S. and China follow through on climate change?

Factors Explaining China's Engagement on Climate Change

Date: 17 November 2014

The joint Chinese–American announcement of emissions targets brings the world a big step closer to meaningful post-2020 action on climate change. Barack Obama in his Brisbane speech made it clear where the two superpowers see things going: ‘If China and the United States can agree on this, then the world can agree on this’. 

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Successes and new cooperation fall out of the latest G20 summit

The Successes of the G20 Summit

Date: 17 November 2014

Overall, the economies of Asia are a bull element in global recovery and long-term development. The advanced countries, although less so now the United States, remain a drag on the world economy with no sign that Europe is likely to emerge from stagnation any time soon. 

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How will APEC top 2014 in the years ahead?

2014 has been a Big Year for APEC

Date: 17 November 2014

The APEC summit has only just ended, but like the return of hazy skies over Beijing, clouds of uncertainty surrounding the regional forum have again drifted overhead. 

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Would a proposed response framework work in Asia for an Ebola outbreak?

A Proposed Framework Could Help Asia Deal with an Ebola Outbreak

Date: 17 November 2014

Southeast Asia is no stranger to epidemics and is a hotspot for emerging disease threats. There have been serious economic and health-sector impacts from zoonoses including Nipah virus infections, SARS and highly pathogenic avian influenza (commonly known as bird flu). 

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Around the world in many Emerging Markets

A Preview of this Week's Events Among the Emerging Markets

Date: 17 November 2014

There were few notable developments out of the G20 meeting that would directly impact EM markets.  However, the escalating tensions with Russia made evident in the meeting have increased to the point that it could again lead to spillover effects. 

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Japan's GDP surprise, a warning from the BOE and Europe's dealings

Even More Economic News and Currency Reaction

Date: 17 November 2014

The US dollar is mostly higher to start the week, with two exceptions. The first is the yen.   The New Zealand dollar is the other exception, helped by a strong retail sales report (1.5% in Q3 vs. consensus of 0.8%).

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The dollar's bull run is quite powerful

The Strong U.S. Dollar Trend Continues

Date: 17 November 2014

It is beyond dispute.  The US dollar is in a powerful bull run.  There are two main drivers, and their ability to dominate the price action varies according to the news stream.  The first is constructive economic news from the US that reinforces ideas that the Fed will likely raise rates next year. 

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A busy week awaits market participants

Let's Review: Plus a Preview of this Week's Events and Markets

Date: 17 November 2014

The investment climate rests on three legs:  the divergence that is characterized by the de-synchronized business cycle, the decline in commodity prices and a slowing of China.   Data that underscores these factors appear to have stopped having much significance for investors. 

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The sterling and yen moved on economic data overseas

International Data Moved Foreign Currencies This Week

Date: 14 November 2014

The main theme this week has been the heavy tone of both sterling and the yen.  The yen's weakness stems from the aggressive easing by the BOJ and the stepped up buying of foreign assets by Japanese investors.   Sterling has been trending lower since peaking four months ago.  We have noted how well sterling has been tracking the shift in interest rate expectations.

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A review of where things stand in the Emerging Markets

The Latest in the Emerging Markets

Date: 13 November 2014

Over the last week, UAE (+5.5%), Hungary (+3.3%), and Hong Kong (+2.5%) have outperformed in the EM equity space as measured by MSCI, while Colombia (-2.7%), Mexico (-2.1%), and Egypt (-1.2%) have underperformed.  To put this in better context, MSCI EM rose 0.5% over the past week while MSCI DM rose 0.6%. 

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The largest banks in the world receive a hefty fine for Forex fixing

The Biggest Banks Pay For Foreign Exchange Market Fixing

Date: 13 November 2014

Suppose you’re in the supermarket shopping for groceries. While you’re strolling the aisle with your cart, a shadowy figure looms over your shoulder and changes the prices on the items you want to buy before you get a chance to pick them up. 

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Cambodia's growth can be spurred several ways

Spurring Cambodia's Growth

Date: 13 November 2014

After the global recession in 2009, Cambodia’s economy recovered steadily with its GDP growing at an average rate of 7 percent per year in 2010–13. It is expected to maintain its growth rate of 7 percent this year. 

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Hollande's economic plan may be thwarted by his low approval rating

French President Hollande's Economic Plan in Jeopardy

Date: 13 November 2014

France is in a difficult position.  It has not had a sufficient spur to reform, despite the platitudes by both Sarkozy and Hollande.  The fall of the Berlin Wall was a great spur to Germany, though it took it a few years to realize it.  A capital strike against the periphery by both creditors in the Eurozone and international investors forced the periphery to adopt policies they would not have otherwise. 

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Asia stands to benefit from new U.S.-China move on climate change

U.S.-China Move on Climate Change Critical to Asia

Date: 12 November 2014

A set of reports by the Intergovernmental Panel on Climate Change (IPCC), the last of which was released on November 2, 2014, sets the scene for governments to renew their efforts on the issue through ambitious commitments for a comprehensive climate agreement in Paris in December 2015. 

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What is the Asian 'region' and what could it be?

Defining the Asian 'region' a Challenge at APEC

Date: 12 November 2014

With considerable pomp and circumstance – and at considerable expense – it fell to China to host the annual APEC summit this year. If it lives long in the memory at all, the meeting will probably be remembered for a handshake between Xi Jinping and Shinzo Abe; a greeting that seemed to take place in an emotional vacuum stripped of the warmth that sometimes accompanies human interactions. Outside of diplomatic niceties though, there was a telling reminder of how hard it remains to build anything approaching a viable consensus in the region. 

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Maritime security is the next phase of U.S.-Vietnam relations

The Latest Step in Improving U.S.-Vietnam Relations

Date: 12 November 2014

The United States partially lifted its decades-old ban on weapons sales to Vietnam on 2 October 2014. This was one of the most significant steps in improving relations between the two former enemies since they normalised diplomatic ties nearly two decades ago. 

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The Modi government is focusing on employment opportunities for millions

India's Restrictive Labor Laws Challenge Investors

Date: 12 November 2014

Investors find labour laws in India restrictive. Although progress has been made since reforms began in 1991, the labour market is still subjected to around 250 labour rules at the central and state level. India, a democracy, has found it harder than China — where labour laws are more flexible and business friendly — to undertake important reforms. 

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International events seem to be driving the dollar

International Events Leave the U.S.Dollar Mixed

Date: 12 November 2014

The consolidative tone that has been a general feature of the foreign exchange market continues today, leaving the US dollar broadly mixed.  Even though the Fed's new Labor Market Conditions Index improved more than expected, the performance of the Fed funds and Eurodollar futures indicate little impact on expectations for the first rate hike.  This is to highlight that the main drivers of the dollar are not developments in the US but Europe and Japan. 

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Clear challenges exist for the upcoming G20 summit in Brisbane

G20 Summit 2014 - A Preview and History Lesson

Date: 11 November 2014

To understand this week’s G20 Summit being held in Brisbane, Australia, and measure its success, requires a sense of the history of economic crisis and change. Recurring crises have shaped global institutions across the interwar gold standard, the Bretton Woods postwar order, the G7 of the 1970s and the expanded G20 of today. 

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China's economic growth slowed, but not enough to cause concern

China's Growth Rate Slowed, But Not Dramatically

Date: 11 November 2014

The global economy breathed a sigh of relief last month with the release of China’s third quarter growth numbers. The result of 7.3 percent was down from 7.5 percent in the previous quarter but came in a touch above consensus forecasts. The result was sufficiently robust for worries about a hard landing to retreat significantly. 

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Japanese investment activity was furious and international pre-BOJ QQE surprise

Japanese Investment Activity Pre-BOJ Surprise QQE

Date: 11 November 2014

The Bank of Japan surprised the markets on October 31, and probably surprised itself just as much.  The BOJ meeting was initially to update macro forecasts, but it soon became clear to Governor Kuroda that inflation expectations were being slashed.  This reportedly pushed Kuroda into action. 

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Currency news abounds from around the globe

A Slumping Yen Trumps a Better Dollar Bid

Date: 11 November 2014

While the US dollar has come back bid today, the real story is the drop in the Japanese yen.  The yen is off almost 1% against the US dollar and nearly as much against the euro. 

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Dollar technicals move in with a lack of economic data

The Dollar Pullback Amid Foreign Economic News

Date: 10 November 2014

The US dollar is extending the pullback seen before the weekend.  There does not appear to be shift in fundamental considerations.  The October jobs report confirmed the trend improvement in the US labor market continues, and will still most likely lead to a Fed rate hike in the middle of next year.  Meanwhile, it is clear that the ECB will most likely take additional measures to ensure the expansion of its balance sheet.  The BOJ is just beginning the acceleration of its balance sheet expansion. 

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As usual there is a lot to look forward to this week

A Thought about the Week Ahead Times Twelve

Date: 9 November 2014

1.  The Federal Reserve upgraded its assessment of the labor market in its statement at the end of last month.  It noted that the "under-utilization of labor resources was gradually diminishing".  There was nothing in the October jobs report that will challenge that assessment.  The Fed's new labor market conditions index will be released at the start of the week and the JOLTS report on Thursday. 

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How well is Abenomics Doing?

An 'Abenomics' Scorecard

Date: 9 November 2014

The December 2012 election gave Japan’s Liberal Democratic Party control of both houses of the Diet as the electorate sought positive, decisive, energetic leadership out of the malaise of the past two decades. Shinzo Abe offered himself as that leader, with Abenomics as his program. 

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Will ASEAN take its own position or remain a neutral covenor

Clear Challenges Exist at the Next ASEAN Summit

Date: 8 November 2014

On 12 November 2014, ASEAN leaders will gather in Naypyidaw, Myanmar’s new capital, for their twice-yearly summit.  High on the ASEAN agenda for this November’s summit is, of course, the South China Sea. 

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Oilfield Services is a lucrative part of the US oil boom

U.S. Oil Boom Driven in Part by Oilfield Services

Date: 7 November 2014

The shale revolution’s sweet spot is oilfield services, the lower-risk backbone of the American oil and gas boom that pays off regardless of a play’s economics.  Behind the stardom of the explorers and producers who have put themselves on the revolutionary shale map and absorb most of the risk—are the service providers who make up a highly lucrative market segment. 

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China's role in APEC post-summit

China's Place in Asia Post-APEC

Date: 7 November 2014

On 10 November 2014 a summit of the Asia-Pacific Economic Cooperation (APEC) forum will convene in Beijing, followed in rapid succession by the East Asia Summit in Naypyidaw and the G20 in Brisbane.  Much of what will be said and done at these events will implicate the tectonics of nascent global governance set in motion by China’s campaign for greater influence in Asia. 

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The price of oil eases further on supply/demand issues

The Supply/Demand Equation and Oil's Price Drop

Date: 7 November 2014

Oil prices are down again, and have dropped for five of the past six sessions.  The proximate cause for yesterday's drop was news that OPEC had cut its demand forecasts through 2035, except for next year.  In addition, Libya indicated that it would soon resume operations of its largest oil field. 

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The dollar had a good week and other currency news

A mixed U.S. dollar Pre-Jobs Data and other News

Date: 7 November 2014

The US dollar is narrowly mixed as the market awaits for North American jobs data to close out the week.  It has been another good week for the greenback.  It has appreciated against all the major and emerging market currencies. 

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U.S. Economic Outlook Helps Push SPY Higher

U.S. SPDR S&P 500 ETF Rally Continues

Date: 6 November 2014

The S&P 500 ETF (SPY) is up more than 10 percent over the last 20 days, representing one of the biggest advances in a comparable period. This comes after the U.S. Federal government continued to report impressive economic data, which signifies increased optimism for economic recovery. 

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Where the Emerging Markets Stand

A Review of the Emerging Markets

Date: 6 November 2014

Over the last week, Egypt (+5.1%), India (+2.1%), and Peru (+1.3%) have outperformed in the EM equity space as measured by MSCI, while Russia (-7.3%), Brazil (-4.9%), and Korea (-4.0%) have underperformed.  To put this in better context, MSCI EM fell -1.6% over the past week while MSCI DM rose 0.8%. 

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The euro receives no help from Draghi and the ECB

Draghi's Comments Offer No Surprises

Date: 6 November 2014

Contrary to the leaks, ECB President Draghi stuck to his intent that the ECB's balance sheet move back toward the 2012 levels.  He clearly confirmed that this was unanimous.  This was the first time, such a reference was made in the introductory remarks, which gives it more gravitas. 

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Can TPP progress be made at APEC 2014?

APEC and the Trans-Pacific Partnership

Date: 6 November 2014

The race is on between the United States and China to dominate the rules-setting game for trade by being the first to be able to announce plans for a free trade area in the Pacific Rim. China hopes to use its position as chair of APEC this year to propose that a feasibility study on a Free Trade Agreement for the Asia-Pacific (FTAAP), first mooted in 2006, be pursued. In other words, negotiations towards an FTAAP would commence, for all practical purposes. 

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Can demand for 'dim sum bonds' be reinvigorated?

The Appetite for 'Dim Sum' Bonds is Beginning to Wane

Date: 6 November 2014

The offshore renminbi bond market has boomed since the Chinese authorities first allowed domestic banks to issue them in Hong Kong in June 2007. But appetite for the paper — popularly known as ‘dim sum bonds’ — is starting to wane as access to onshore markets becomes easier. To stay relevant, the dim sum market must develop further. 

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The ECB and BOE are not expected to change course

The ECB and BOE Meet Today, but What Will Change?

Date: 6 November 2014

The ECB meets today and is not expected to change policy. It may be difficult for Draghi to take fresh initiatives now.  The Bank of England meets today and is not expected to change policy. And as we like to point out, when it does nothing, it says nothing.

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Free trade between Asia Pacific countries is a struggle for APEC

The Free Trade Challenges Facing APEC

Date: 5 November 2014

If the APEC meeting can agree on the proposed regional free trade plan and a reasonable implementation schedule, it would take a leap into faster regional growth and prosperity.  The Asia-Pacific Economic Cooperation (APEC) forum on November 10-11 will take place amidst the rebalancing of China, the United States and the integration of Southeast Asia, which is causing substantial system friction. 

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Time for India to Strengthen its Relationship with Japan

Can India's Modi Strengthen the Relationship with Japan?

Date: 5 November 2014

Since taking office, Prime Minister Narendra Modi has made efforts to entice foreign investment into India and to establish closer ties with Japan. Warm diplomatic gestures between Modi and Japanese Prime Minister Shinzo Abe have garnered considerable attention, with some commentators arguing that Modi’s recent visit to Japan marks the beginning of a new Indo-Japanese relationship aimed at countering China’s growing influence in the region. 

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New Global Challenges Face Old U.S. Leadership

Does U.S. Leadership Need to Change to Meet New Global Challenges?

Date: 5 November 2014

Foreign policy is a search for and an attempt to impose order on an unruly world. That task has become more difficult in recent years, with an ever-lengthening list of threats, challenges and destabilising factors. The rise of Asia in the global system also requires a paradigm shift in thinking about global governance. 

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Is the ECB a house divided?

Draghi Operating a Divided ECB

Date: 5 November 2014

The ECB meeting has gained extra significance given last week's developments.  The Federal Reserve ended its asset purchase program, which it did not call quantitative easing, but rather credit easing.  It also offered a constructive assessment of the labor market.  Their concern about the decline in inflation expectations, measured by the break-evens, was minimal. 

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Low oil prices are good for only so long

Further Ramifications of Low Oil Prices

Date: 4 November 2014

The drop in oil prices since mid-year has been a significant development even though the broader ramifications for world growth, prices and policy are only now being worked out. 

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President Widodo faces a strong opposition in parliament

Could a Hostile Parliament Be Good for Indonesia's Jokowi?

Date: 4 November 2014

There is good news and bad news about the recent string of victories of the ‘Red and White’ coalition in the Indonesian parliament. The good news is that unlike previous Indonesian presidents, President Joko Widodo — popularly known as Jokowi — will have to face a critical and probably hostile parliament. This is also the bad news. 

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National Commercial Bank's IPO second biggest behind Alibaba

Saudi Arabia's National Commercial Bank's Massive IPO

Date: 3 November 2014

Saudi Arabia’s largest lender, National Commercial Bank (NCB) has attracted 215.8 billion riyals (US$58 billion) of bids from about 1.2m investors following its initial public offering. Despite attracting religious controversy for being un-Islamic, the retail portion of the US$6 billion sale was oversubscribed by almost 16 times. 

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Emerging Markets Preview of Economic News

A Preview of this Week's Events Among the Emerging Markets

Date: 3 November 2014

Overall, the investment climate for EM is likely to remain negative in this strong dollar environment.  A weaker than expected official China PMI over the weekend didn't help matters. Indeed, most of the Asian PMI readings out already came in weaker than expected, with Korea and Indonesia coming in below 50. Expect further deterioration in EM sentiment ahead. 

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The Global Markets Appear to be Looking for News

The Current State of the Global Investment Climate

Date: 3 November 2014

There are three elements to the investment climate:  The divergence between the US on one hand and Europe and Japan on the other, the drop in many commodity prices, including oil, and the slowing of the Chinese economy. 

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Asian economics and its geo-political challenges

Geo-political Challenges and Economics in Asia

Date: 3 November 2014

What can economics tell you about the geo-political challenges in Asia? Many strategic thinkers focus on defence capabilities, ideology, politics, environmental threats or history to envisage strategic futures. Economics provides a lens to focus on the fundamental drivers of regional power relations. 

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A Currency Review in the U.S. and Abroad

A Currency Review and Futures Report

Date: 1 November 2014

The US dollar had a good week to close out October.  It was bolstered to new highs against the euro and yen.  It is driven by both positive developments in the US and negative developments in Europe and Japan. 

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Renewable Energy is a Beneficiary of Japan's Feed-In-Tariff

Japan Impresses with its FIT (Feed-In-Tariff)

Date: 1 November 2014

The effects of Japan’s feed-in tariff (FIT) for renewable energy have been impressive. Since 2011, Japan has seen a massive expansion of solar photovoltaics (PV). The size of the domestic market increased from 1GW in 2010 to almost 7GW in 2013. This solar expansion is expected to continue with the 2020 target for PV installations raised from 14GW to 28GW. But the success of renewable energy should not be taken for granted. 

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Good and bad news about recession-led reduced energy consumption

Good News/Bad News from a Recession-Backed Energy Consumption Reduction

Date: 31 October 2014

Readers of the Financial Times would have recently encountered a story that encompasses the paper’s version of bad/good news when it comes to the oil business. According to the author Daniel Yergin, the bad news is that several major oil exporters are suffering from insurrection and civil war, which threatens global supplies. But, there is also good news:

The sum of these risks is trumped by the old-fashioned forces of supply and demand. While there may be a surplus of geopolitical risk in the world, there is an even greater surplus of oil.

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A currency exchange rate confined to a band could hurt PNG's poor

Unintended Consequences of Papua New Guinea's Exchange Rate Policy

Date: 31 October 2014

Earlier this year, Papua New Guinea moved away from a market-based exchange rate. It seemed just a technical announcement at the time. The central bank indicated that the exchange rate would float within a narrow band around the interbank exchange rate. However, this seemingly innocuous announcement has major implications for PNG’s future development. 

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A review of where things stand in the Emerging Markets

An Update on the Emerging Markets

Date: 30 October 2014

1) Indonesian Finance Minister Bambang Brodjonegoro said the government will probably raise subsidized fuel prices before year-end 

2) Dilma Rousseff was re-elected as President of Brazil 

3) Brazil’s central bank delivered a hawkish surprise too on Wednesday, hiking rates by 25 bp to 11.25% 

4) Protests continue to spread in Hungary

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According to the WTO, China has Violated GATT on Rare Earths

How Important to China is the WTO Ruling on Rare Earths?

Date: 30 October 2014

In August, the Appellate Body of the WTO ruled that China’s export duties, quotas, and administration of rare earths, tungsten and molybdenum products violated various provisions of the GATT and the Accession Protocol that China promised to implement when it joined the WTO in 2001. 

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The ECB meets next week, the BOJ this week.

The ECB and BOJ Will Each Meet with New Inputs

Date: 29 October 2014

The market is generally expecting a dovish FOMC statement.  The BOJ is still to meet this week.  Here too the market expects a dovish stance, and we are less sanguine.  The ECB meets next week.  It has more to chew on with today's Q3 Bank Lending Survey. 

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There is other news around the globe besides the Fed statement

Some Global Market News While Investors Wait on the Fed

Date: 29 October 2014

Although there had been some jitters, investors have come around and expect the Federal Reserve to announce its commitment to end QE today. We expect the statement to reflect that the centrist core (Yellen, Dudley, and Fischer) remains in control. 

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Alibaba goes where after its IPO?

Now What? - The Post-IPO Future for Alibaba

Date: 29 October 2014

Chinese e-commerce giant Alibaba has a track record of breaking records. It not only operates the world’s largest online business-to-business platform, but also the world’s largest online consumer marketplace. 

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Part of the Global Supply Chain for Luxury Brands

Luxury Brand's Supply Chains are Customized and Global

Date: 28 October 2014

More and more global luxury brands such as Gucci, Louis Vuitton, and others are promoting themselves as Lifestyle brands, spanning many products including fragrance, home collections, apparel, paint, wallpaper, foods, and many other products.  In this environment, the supply chain and logistics task becomes even more complex, as it involves delivering and fulfilling product and service support to deliver a lifestyle “vision” around the world. 

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This will be another busy week in the emerging markets

The Week Ahead in the Emerging Markets

Date: 27 October 2014

Global risk-off sentiment and the reelection of Dilma Rousseff as the Brazilian president is setting EM off on the back foot to start the week. However, the lack of large moves in the dollar could mean that negative sentiment will be contained to equity markets. 

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Yet another busy week for market participants.

Global Economic and Market Preview

Date: 26 October 2014

The week ahead is eventful.  Investors will learn of the results of review and stress test of European banks.  The Federal Reserve meets, as do three other central banks (Bank of Japan, Sweden's Riksbank and the Reserve Bank of New Zealand.  Important elections were held in Ukraine and Brazil over the weekend. 

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The Week that was in Currencies

Currency Review and other News from the Markets

Date: 25 October 2014

The US dollar gained on most of the major foreign currencies last week, but the overall tone, leaving aside the yen, was largely consolidative in nature.  The greenback was soft in the first half of the week but recovered in the second half. 

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Life Satisfaction Plateau Above a Specific Level of GDP Per Capita

Is There a Better Economic Growth Measure than GDP?

Date: 24 October 2014

The “economic problem” of today is firmly in the driving seat of policy with higher economic growth the ultimate goal of many policymakers. But is growth of the economy – producing more goods and services (usually measured as the percentage change of GDP) – a good indicator of well-being or the quality of life? 

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Spending on Infrastructure Could Help Thailand's Economy

Help for Thailand's Economy Can Come via Infrastructure Spending

Date: 24 October 2014

Since Thailand is currently undergoing national reform, public spending should be geared towards repositioning the country’s economic fundamentals while honouring long-term fiscal stability. Infrastructure improvement is a must for Thailand to fully benefit from its geographical advantage at the heart of ASEAN. 

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Ebola in NYC and Mali, Brazil's Election and EU Politics are in the News

A Focus on Currencies, Brazil's Election, EU Politics and Ebola

Date: 24 October 2014

The headlines about a NY doctor testing positive for Ebola yesterday took off some of the enthusiasm for risk takings. Mali also confirmed its first case of Ebola.  Intra-EU politics is set to heat up again after it demands more funds from the UK and the Netherlands. Tonight will be the last debate ahead of Sunday’s much awaited presidential elections in Brazil. 

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The latest news from the emerging markets

What's Happening in the Emerging Markets?

Date: 23 October 2014

India’s equity index continues to outperform following Prime Minister Modi’s decision to end fuel subsidies on diesel.  On Friday, Moody's cut Russia by a notch to Baa2 and kept the outlook at negative.  Russian state oil company Rosneft is reportedly seeking over RUB2 trln from the Wellbeing fund.  South Africa's mid-term budget review was positive.  Petrobras had its credit rating cut by Moody’s. 

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The Renminbi Lags the Dollar and Euro, but is Growing Globally

China Presses on with Renminbi Internationalization

Date: 23 October 2014

There is a positive trend in RMB as a reserve holding, but it is still small compared to other global currencies. Financial markets are still not as deep and liquid as those in developed countries, and are much less than those with global currencies. While the accomplishment is impressive, the RMB is still far from being a full-fledged international currency. 

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The sentiment in the U.S. markets is only slightly less fragile

Market Sentiment Remains Fragile

Date: 23 October 2014

Last week's drama was not the beginning of something as the pessimists and cynics would have it.  Our inclination that it was the end of something--that the pendulum had swung unreasonably far unreasonably quickly--is panning out  

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Could an Asian Infrastructure Investment Bank Rival the World Bank?

An Asian Infrastructure Investment Bank's Time May Have Come

Date: 22 October 2014

The proposed Asian infrastructure bank could galvanize growth in emerging Asia and boost lingering global recovery.  According to Western media, the Asian Infrastructure Investment Bank (AIIB) is to rival the World Bank and the Asian Development Bank (ADB).  In reality, the idea of the AIIB was put forward more than a year ago; not to undermine either the World Bank or the ADB, but to deliver the promise that both have failed to deliver – sustained growth in emerging Asia.

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As the price of oil falls, the pressure rises for U.S. drillers

U.S. Oil Drillers Under Pressure from Low Oil Prices

Date: 22 October 2014

Slumping oil prices are putting pressure on U.S. drillers. The number of active rigs drilling for oil and gas fell by their most in two months, according to the latest data from oil services firm Baker Hughes. There were 19 oil rigs that were removed from operation as of Oct. 17, compared to the prior week. There are now 1,590 active oil rigs, the lowest level in six weeks.

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Asia's Estimated Energy Demand until 2035

A Future with a Low-Carbon Asia

Date: 22 October 2014

The pattern of energy supply and demand that has prevailed over the last 3 decades is undergoing transformation, with great consequences for Asia’s energy security and regional cooperation. The two factors driving this transformation are the rise of the Association of Southeast Asian Nations (ASEAN), the People’s Republic of China (PRC), and India as major energy consumers, and the impressive additions to oil, gas, and coal output. 

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Can the ECB include corporate bonds in its asset purchases?

The ECB May Add Corporate Bond Purchases

Date: 22 October 2014

The targeted long-term repo operations had not even been launched when the ECB announced its intention to buy asset-backed securities and covered bonds.  It then began to buy covered bonds before the conclusion of the Asset Quality Review and bank stress tests. 

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'Womenomics' is a cornerstone of Abe's economic policy

Japan PM Shinzo Abe's Economic Strategy Includes "Womenomics"

Date: 22 October 2014

‘Womenomics’ is a key pillar of Prime Minister Shinzo Abe’s economic growth strategy. In 2013, just 64 per cent of Japanese women aged 15–64 were participating in the labour force — a low rate by OECD standards. As Japan’s labour force is already in decline, it is wasteful that women, and particularly those who have a higher education, have been underutilised. 

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Prison reforms in place need improvement so says Republicans and Democrats

Democrats and Republicans unite in calls to rebuild brutal US penal system

Date: 22 October 2014

The US has a quarter of the world’s prisoners, but only 5% of the world’s population, so the “tough on crime” approach of the past 40 years has not worked. It has left a trail of social and economic destruction, creating broken families, alienating working-class black communities and producing high levels of recidivism. The time for reform is now. 

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The recent protests in Hong Kong add to a murky economic future

Hong Kong's Cloudy Economic Future

Date: 21 October 2014

Hong Kong’s lingering turmoil suggests that its economic future is not assured.  Recently, the Chinese People’s Daily accused Washington for colluding with Occupy Central protest organizers to try and foment a “color revolution.” In the West, the charge has been downplayed.  Today, Hong Kong must cope with political, economic and external risks. 

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Ireland is more than just a tax loophole

After Ireland's Phase-out of its Controversial Tax Scheme

Date: 21 October 2014

Ireland is to phase out its controversial “double Irish” tax scheme. It follows international criticism and the European Union’s investigation into the legalities of Apple and Ireland’s tax arrangement, and a long-term fascination with whether the country is akin to a tax haven for multinational companies. But endless focus on Ireland’s corporate tax rates makes it seem that this is the sole reason for the high levels of foreign investment. 

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Who is getting help from Indonesia's Fuel Subsidies?

Indonesia Fuel Subsidies' Unintended Consequences

Date: 21 October 2014

Despite having won the president and vice-president posts respectively, Joko Widodo and Jusuf Kalla will possess little control, if at all, on the formulation of the next Indonesian budget for fiscal year 2015–16. One particular issue that concerns the new administration is the large portion of funds for energy subsidies, particularly fuel subsidies. 

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An Emerging Markets Week Preview

This Week in the Emerging Markets is Busy Again

Date: 21 October 2014

Emerging market assets have started off the week mixed, with few clear signals to follow. The major currencies also appear directionless at the moment; though eurozone flash PMIs on Thursday could help put the spotlight back on weakness there. 

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Are U.S. business schools over-emphasizing success?

Should the Value of U.S. Business Schools be Redefined?

Date: 20 October 2014

In our current economic situation, there needs to be new clarity and a re-definition of what business schools are for, taking us back to basics. Business schools should be judged and valued on their relevance and what they contribute to business and to economies. 

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Can Japan's security policy coexist with Northeast Asian stability?

Northeast Asian Stability and Japan's Security Policy

Date: 20 October 2014

On 1 July 2014, the Abe government made a cabinet decision to reinterpret the Article 9 peace clause of Japan’s constitution to recognise the exercise of collective self-defence under limited circumstances. While the scope of the proposed changes are an evolution rather than a revolution in Japanese security policy, especially due to the tough negotiations with Abe’s coalition partner New Komeito, furor and misconception have surrounded the move. 

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The Federal Reserve and Another Taper-Tantrum

U.S. Treasury Rally on the Second 'Taper-Tantrum'

Date: 19 October 2014

The prospects that the Federal Reserve would begin slowing its purchases sparked a market meltdown in 2013. The "taper tantrum", as it was dubbed, destabilized the capital markets. Now it is as if the markets have had a second tantrum, but this time US Treasuries rallied. 

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A U.S. Market Review and Where it May Lead

A Currency Review, Futures Report and other U.S. Market News

Date: 19 October 2014

After wild swings at midweek (October 15), the US dollar spent the last two sessions of the week consolidating.   While we expect the Federal Reserve will not be distracted by the recent market turmoil, or the softening of some market-based measures of inflation expectations, and will announce the finishing of its asset purchases, we recognize that Bullard's comments cast a greater element of doubt.  This doubt may prevent a resumption of the dollar's uptrend. Broad consolidation is more likely in the days ahead.

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The SCO is looking to Expand for Security and Trade Purposes

Shanghai Cooperation Organisation Goes Beyond Security to Include Trade

Date: 17 October 2014

China recently reaffirmed that it backs India and Pakistan becoming members of the Shanghai Cooperation Organisation (SCO). At the 14th meeting of the Council of Heads of States of SCO on 12 September, Chinese President Xi Jinping called for full membership for SCO observers, including India and Pakistan. 

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Mr. Kuroda is attempting to defeat deflation fears in Japan

Will Kuroda's 'can do' approach succeed for Japan's economy?

Date: 17 October 2014

Under the leadership of Governor Haruhiko Kuroda, the Bank of Japan (BOJ) in March-April 2013 did a 180-degree turnaround: it declared that it had the monetary policy wherewithal to end Japan’s chronic, mild deflation and secure a rate of inflation of around 2 per cent and announced bold monetary action to that end. For BOJ-watchers this was revolutionary stuff — and it was coming from establishment Japan. 

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The Technical Outlook for the Dollar

Getting Technical with the Dollar

Date: 16 October 2014

If the worst of the market panic is behind us, it is worthwhile exercise to see what the charts are saying about the dollar. One advantage of technical analysis is that the fundamental causes and considerations behind the large moves need not be determined. 

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The Emerging Markets Review

An Update on the Emerging Markets

Date: 16 October 2014

OPEC members have started a price war. India's inflation data spelled some relief.  The Bank of Korea cut rates again.  Hungary's Fidesz scored another victory. The Russian Central Bank announced another repo.  Brazil's presidential second round was a dead heat. 

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Slower growth in the U.S. is not the end of the world

U.S. Economic Suspicions are Proving Correct

Date: 16 October 2014

The market is a fickle mistress.  At the end of September, and at the start of this month, we pushed against the hawkish read of the Fed’s dot-plots.  We resisted talk of a Fed hike in Q1 15.  We explained that the Fed’s policy signal emanates from the Troika of leaders, Yellen, Fischer and Dudley.  We warned that the US economy had lost some momentum at the end of Q3 and into Q4.  We had wrongly anticipated a softer employment report, but our larger economic suspicions are proving correct. 

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Vietnam should take steps to avoid a middle income trap

Vietnam Middle Income Trap Could Happen with a FDI-based Economy

Date: 16 October 2014

The Vietnamese economy has experienced a downturn in growth since 2008. In the past five years, the growth averaged about 5.5 per cent a year and is not expected to be much higher in the coming years. For a country of per capita income of about US$2000, that rate of growth is low. 

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Spox FX AUD, GBP, and EUR retracing recent gains

Looking beyond rate rises as 2015 looms

Date: 15 October 2014

Despite a point in mid-week when it looked like the dollar might finally be in for a real correction, the dichotomy of economic performance between the US and most of the rest of the world appears to be growing once again. 

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The markets have yet to stabilize

Market Stabilization has Yet to be Achieved

Date: 15 October 2014

The US equity market was unable to sustain early gains yesterday and, although several Asian markets posted minor gains, Europe is seeing red again today.  US equities are called lower as well.  The European bond market rally continues, except for Greece, where the 10-year yield rose to about 70 bp over the past five sessions. 

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The economic cost of the Ebola outbreak is a great unknown

Economic costs of Ebola rising as people shun human contact

Date: 15 October 2014

The World Bank says the disease’s economic cost could be US$32 billion over two years, with the mining sectors badly hit. But many of the most damaging effects are on a microcosmic scale as citizens in Liberia, Sierra Leone and Guinea, shun their families, friends and communities. 

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Energy Companies That Met Their Demise

Energy Companies not to Big to Fail

Date: 14 October 2014

Running a multi-billion dollar energy company isn't easy. Just ask the executives in the corner suites of some of the energy companies that have gone bust over the years. 

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Could the Red and White Coalition Give Jokowi Trouble?

Indonesia's Jokowi Could be Plagued by the Red and White Coalition

Date: 14 October 2014

Many commentators assumed following Indonesia’s 9 July presidential election that members of defeated candidate Prabowo Subianto’s six-party ‘Red and White’ coalition would not want to be locked out of government and would seek to realign themselves with president-elect Joko Widodo (‘Jokowi’). 

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Economic Events in the Emerging Markets

Economic News from the Emerging Markets in the Coming Week

Date: 13 October 2014

A better mood in equity markets and a softer dollar at the start of the week gives us some hope for a bounce in EM assets, even if short lived. While the focus remains on major markets for now, several local stories - mostly of which political - will continue to play a large role in country-specific performance. 

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Myanmar's Acceptance of Foreign Banks is Promising

Foreign Banks Granted Licenses to Operate in Myanmar

Date: 13 October 2014

On 30 September the Central Bank of Myanmar (CBM) announced the names of the nine foreign banks that are to be awarded licenses to operate in the country. It was a keenly awaited decision that, as with the telecommunications licenses last year, was conducted via a generally well-regarded selection process presided over by a German consultancy firm, Roland Berger. 

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Japan's Leader's 'Abenomics' policies can work, but are not a quick fix

More about 'Abenomics' in Japan and it's Potential

Date: 13 October 2014

After two decades of stagnant growth and the Fukushima triple disaster, Japan appears more confident both domestically and internationally. The economy has been inflated, much-needed social change is being discussed with some progress being made, and international diplomacy is once again active. 

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Will Japan's 'Abenomics' provide lessons for other economies?

Lessons from Japan's 'Abenomics'

Date: 13 October 2014

One of the striking things about the past few decades of Japan’s economic history has been the fact that textbook macroeconomics could have predicted most of it. Back in the late 1990s, this was a controversial point of view. Many people spoke about the ‘specialness’ of the Japanese economy, just as they have about the ‘specialness’ of recent monetary policy. This over-complication seems unnecessary. In the political economy of reform, as in macroeconomics, we can learn a lot from the Japanese experience. 

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Global Currency Moves and the Dollar Correction

The Dollar Correction May or May Not Be Over and Other Currency Moves

Date: 11 October 2014

Last week was of two halves.  The dollar correctly lower through midweek and then recovered.  While the dollar's losses were pared, it still managed to fall against nearly all the major currencies.  However, it finished the week on a firm note, and although it appears poised to move higher in the week ahead, it is not immediately clear that new high is imminent. 

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The Hong Kong Protests Economic Impact

The Economic Side of the Hong Kong Pro-Democracy Protests

Date: 10 October 2014

For years, Beijing has feared colour revolutions. Now, it has one on Chinese soil. The Occupy Central movement has morphed into the Umbrella Revolution. Tens of thousands of Hong Kong citizens, including students as young as 13, have taken to the streets to protest against the Chinese central government’s electoral reform package. 

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The Situation Among the Emerging Markets

Emerging Markets Over the Last Week

Date: 9 October 2014

Over the last week, Brazil (+11.8%), Hong Kong (+2.2%), and Peru (+2.0%) have outperformed in the EM equity space as measured by MSCI, while Greece (-4.5%), Thailand (-2.4%), and Korea (-1.9%) have underperformed. To put this in better context, MSCI EM rose 2.0% over the past week while MSCI DM rose 0.5%. 

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Is Supply Having More of an Effect on Oil than the Dollar?

Oil Supply and the Dollar: It's Complicated

Date: 9 October 2014

The US dollar's upside momentum has faded, but oil prices remain depressed.  Many observers try, too hard perhaps, to link the decline in commodity prices in general, and oil in particular, to the appreciation of the dollar.  Yet the situation is considerably more complicated. 

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Will a deal on climate-change be reached by China and the U.S.?

Can China and the U.S. reach a climate-change deal?

Date: 8 October 2014

For many years China and the United States have faced off over climate change. Now, climate change action is one of the few things the two powers can agree on. A new view on the benefits of climate action goes some way to explain this shift. 

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Will the Fed Minutes Change the Dollar's Direction?

How will the Dollar React to the Fed Minutes?

Date: 8 October 2014

Corrective forces continue to grip the foreign exchange market.  Many expect the dollar's downside correction/consolidation to end today.  Technically-inspired short-term participants often see 3-4 day counter-trend moves to be typical of market moves.  Fundamentally-inspired traders expect the FOMC minutes, which will be released in the North American afternoon, to be read by the market participants with a hawkish bias. 

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A Current Look at Uridashi Bond Issuance

The Latest on Uridashi Bond Issuance

Date: 7 October 2014

Marketed to retail investors, Uridashi bonds represent a small slice of the FX market, but we believe that the observed trends in this segment can reflect those of the larger Japan investment community as well. 

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Hong Kong Protests Carry the Spirit of Democracy

Hong Kong Pro-Democracy Spirit Alive and Well

Date: 7 October 2014

Just before midnight on 2 October, CY Leung, Chief Executive of Hong Kong, agreed to negotiations with student protest leaders on the issue of political reform. The protesters, as well as the people of Hong Kong, can be very proud of what they have achieved so far. 

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Mongolia's Approach to Foreign Relations is On Target

Mongolia's Ties to China and the West are Deepening

Date: 7 October 2014

Economic ties with China are deepening and political and military linkages with the West are growing. This diversity of interaction is at the heart of Mongolia’s Third Neighbour approach and is a clear indication the strategy is alive and well. 

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A strong dollar pulls back slightly

Dollar Pulls Back Slightly But Remains Strong

Date: 7 October 2014

Corrective forces continue to take hold of the foreign exchange market. It is long overdue and does not appear to be sparked by fundamental developments per se. Many short-term momentum participants had jumped aboard what had looked (and behaved) a one-way train. Late dollar longs were in weak hands, and once the momentum faltered, were squeezed out. 

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The G20 Summit in Brisbane is Just Over a Month Away

Will Australia Chair a G20 Summit with a Meaningful Outcome?

Date: 6 October 2014

The genesis of the G20 is a tale of two crises. The first — the Asian financial crisis — led to the creation of the G20 as a meeting of finance ministers and central bank governors from 19 of the world’s largest economies plus the EU. The second — the global financial crisis — led then-US president George W. Bush to elevate the G20 to a leaders’ level meeting. 

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India decides a higher coal tax is the path to a low-carbon economy

India's path to a low-carbon economy includes raising the coal tax

Date: 6 October 2014

India’s 2014–15 budget doubled the rate of tax on coal from 50 rupees (US$0.82) to 100 rupees (US$1.64) per metric tonne. Though the additional revenue could accelerate the deployment of renewable energy technologies in India, the increase in coal tax is not an unambiguous step in the ‘right’ direction of lowering the carbon intensity of the Indian economy. 

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Global Economic News and Currency Movement

Global Currency Movement and other Economic News

Date: 6 October 2014

The main theme in Asia and Europe has been a somewhat heavier dollar tone, against the major and emerging market currencies.  There has not been much of a fundamental driver as perhaps a bit of caution in a stretched-market ahead of key levels ($1.25 for the euro and JPY110 dollar-yen). 

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Border issues temper trade between China and India

Stronger India-China Trade Undermined by Border Issues

Date: 3 October 2014

India’s modern relationship with China, beginning in the 1950s when India was the first non-socialist bloc country to rekindle relations, has been volatile — underscored by border disputes, post-colonial bonhomie and Asian solidarity. 

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The U.S. dollar, global economic data and the U.S. jobs report

The U.S. dollar post-Draghi and pre-U.S. jobs report

Date: 3 October 2014

The US dollar regained the upper hand as yesterday's downside correction fizzled out.  Draghi provided just enough details of the asset purchase plans to avoid a rout, but not enough to give hope that this is what will turn the eurozone around.  With Europe's service PMIs released, the market turns its attention to the US employment data. 

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Changes Aplenty in Many Emerging Markets

Changes Abound Throughout Emerging Markets

Date: 2 October 2014

Over the last week, the Czech Republic (+1.0%), India (+0.7%), and South Africa (+0.6%) have outperformed in the EM equity space as measured by MSCI, while Brazil (-7.5%), Russia (-6.6%), and Korea (-4.1%) have underperformed. To put this in better context, MSCI EM fell -3.2% over the past week while MSCI DM fell -1.8%. 

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Draghi's Comments to the Markets Don't Create Much of a Stir

Draghi's Comments End Up Rather Anti-Climactic

Date: 2 October 2014

This seems to be the first time in several months that ECB President Draghi has been rather anti-climactic.   The disappointment or the "sell the rumor buy the fact" scenario we suggested is, in fact, unfolding, and the euro is correcting higher. 

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India's 'smart cities' program faces important challenges

'Smart Cities' in India also need to be Livable

Date: 2 October 2014

India is embracing this push for smart cities. By most estimates the level of urbanisation will reach 50 per cent in India by 2039. To manage this change, India would have to spend US$1.2 trillion in its urban areas over the next 20 years. 

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All eyes and ears on Draghi today

The ECB Meeting and More Economic Events with Global Ramifications

Date: 2 October 2014

The ECB meeting and details about the asset purchase plan is the key event of the day.   However, there is something else happening.  A string of disappointing US data and the sell-off in equities have sparked a bond market rally that again has caught many participants wrong-footed. 

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The ECB has Options for Eurozone Growth

The ECB and its Options for Promoting Eurozone Growth

Date: 1 October 2014

The European Central Bank meets tomorrow.  The focus is on the details of the asset-backed securities and covered bond plan that was announced last month. There are three key issues related to this new initiative:  What instruments will be purchased, how much will be bought, and how long will the purchase program last?

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International Trade Greatly Affected by Dollar Strength

U.S. Dollar Strength and its Impact on International Trade

Date: 30 September 2014

With the ECB meeting and US jobs data the key events of the week, it is understandable the August US trade balance, due out Friday, is not drawing much attention. However, the combination of the growth differentials, favoring the US, and the strong dollar lead to some concerns that trade will act as a drag on GDP. 

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Too Close to Call for Marina and Dilma?

Brazil's Marina Silva losing ground to Dilma Rousseff or Not

Date: 29 September 2014

As new information about the presidential race comes in, we are adjusting our views in two ways. (1) We again consider the tail risk of Dilma winning in the first round, though we still think this is unlikely; (2) The chances of Marina winning are obviously smaller, though we continue to think she has a strong chance.

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Modi Takes to the U.S. Streets During Visit

The American Dream From Modi's View

Date: 29 September 2014

As curtain-raisers to this week’s events in New York and Washington, US Secretary of State John Kerry and US Secretary of Defence Chuck Hagel visited Delhi last month, proclaiming India as an ‘indispensable partner for the 21st century’ and the visit as a ‘transformative moment’ in the relationship. 

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A nuclear deal between Japan and India won't be as easy as a handshake

India's potential nuclear deal with Japan likely won't be easy

Date: 26 September 2014

In recent weeks we have seen the ‘bromance’ between India and Japan reach new heights. Earlier this month, India’s Prime Minister Narendra Modi visited Tokyo amid media hype of a special relationship, and even a de facto alliance, between the two countries. 

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How will Beijing's influence shape Hong Kong's Future?

Hong Kong wrestling with the increasing influence of Beijing

Date: 25 September 2014

On 31 August, when Beijing’s offer of universal suffrage to Hong Kong came with an extremely restrictive framework allowing for only two to three establishment candidates, it was just another sign of the Chinese government taking greater control over its special administrative region. 

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India's Manufacturers in Need of a Boost

Can India's Manufacturing Sector Grow Under the Current Government?

Date: 24 September 2014

To make progress on manufacturing, India must seize the opportunity provided by international production sharing networks, which have propelled other emerging economies of Asia forward. Today, the share of manufacturing in the GDPs of China, Thailand and Malaysia is in the range of 25–35 per cent, while in India it is 15 per cent. 

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Australian housing bubbles up in value

Is Australia’s housing bubble about to pop?

Date: 22 September 2014

If Australia’s property bubble bursts, the consequences would be disastrous for an economy dominated by oversized banks. But Government policies aimed at propping up the market are simply making the bubble bigger. And bigger. 

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Alibaba set to price IPO shares amid investor frenzy

Alibaba set to price IPO shares amid surging investor demand

Date: 18 September 2014

 Alibaba Group Holding the chinese e-commerce giant will sell $22 billion of shares on Thursday, finalizing a two week road show that pulled interest from world-wide investors and will likely be the world's largest initial public offering.

Alibaba shares will be priced after the markets close at 4pm. Thursday and will trade on the New York Stock Exchange on Friday with the ticker "BABA."

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The Demand for Coal in China May Have Reached a Peak

Has China's Appetite for Coal Finally Peaked?

Date: 17 September 2014

A recent report from Greenpeace found that China's coal consumption declined in the first half of this year and new Chinese government data suggests that the country's coal imports have dropped. 

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Japanese School Children Gather in an Optimistic Pose

Surprisingly Optimistic Japanese Youth Face a Bleak Future

Date: 17 September 2014

The youth of Japan appear to face a bleak future — a catastrophic budget deficit, ageing population and collapsing social security system. Despite this, according to data released last year, Japan’s youth are astonishingly positive in their outlook. 

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Indian foreign direct investment in South Asia not realized

Promises of Indian foreign direct investment in South Asia go unfulfilled

Date: 12 September 2014

There have been promises of greater Indian investment in South Asia for a long time. A report produced by the Asian Development Bank (ADB) in 2007 argued that India would play a key role in investing in South Asia and this in turn will stimulate intra-regional trade in the region. The report made special reference to the rapidly growing Indian IT industry and identified it as a potential investor in South Asia.

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BRICS create the New Development Bank to finance emerging economy projects

BRICS creation of the New Development Bank called a landmark achievement

Date: 11 September 2014

The creation of the BRICS New Development Bank (NDB) to finance infrastructure and sustainable development projects in emerging economies is a landmark achievement. Developing nations have lost faith in the current system with its strict conditions on development finance and its inability to insulate countries from financial shocks.

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Coordinated monetary policy and global financial market volatility

The case for coordinated monetary policies helping to curb global financial market volatility

Date: 10 September 2014

Since the onset of the North Atlantic financial crisis (NAFC) in 2008, central banks in the US and the other major advanced economies have pursued highly accommodative monetary policy, including through unconventional policy actions. Policy rates have been near zero in these economies for almost five years, and both short-term and long-term interest rates have touched historic lows.

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Latin America and Asia's Biggest Powers' Interest

Asia's biggest powers being lured to Latin America

Date: 9 September 2014

Considered for most of the twentieth century as the United States’ backyard, Latin America is today a place where other major powers seek to exercise a growing influence and find a steady supply of energy and natural resources as well as markets and investment outlets. 

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Sterling lower in Asia on majority favoring Scottish independence

Sterling gets pounded after YouGov poll shows slim majority favor Scottish Independence

Date: 8 September 2014

Sterling has been pounded by the YouGov poll that showed that those favoring Scottish independence have gained a slim majority for the first time.  It does not matter than other polls have yet to confirm it.  A "yes" vote was widely seen as a high impact event, though calling it a Black Swan probably does not do justice to the long planned event.  The major parties in the UK are expected to announce a new devolution agreement for Scotland to entice the rejection of independence. 

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Indonesian factory workers would hopefully benefit from a new industrial policy.

Can Indonesia's manufacturing sector be helped with a new industrial policy?

Date: 5 September 2014

The World Bank and Asian Development Bank have recently advocated the importance of Indonesia’s manufacturing sector. Manufacturing is considered a key sector for the advancement of the country’s overall economy and as an important source of formal employment. The reality on the ground since the 1997–98 economic crisis, though, reveals a troubling picture about the sector. 

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Myanmar's foreign exchange market reform

Myanmar's foreign exchange market reform has a long way to go

Date: 4 September 2014

In April 2012, by abolishing the official pegging of the Myanmar kyat to the Special Drawing Right (SDR) of the IMF, Myanmar terminated the decades-old de facto multiple exchange rate system and moved to a managed floating exchange system. While noteworthy in its own right, this is merely the first step in an arduous journey of foreign exchange market reform. The Central Bank of Myanmar is now facing two interlinked challenges: establishing the institutions for a formal foreign exchange market and transferring informal market activities into the formal market. 

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G20 Trade Ministers Meet to Discuss Global Growth

Should the G20 have a global growth target?

Date: 3 September 2014

The global recovery is strengthening but remains weak. A global growth target, pursued by the G20, could significantly strengthen this recovery process. But such a macroeconomic target needs to be supported by microeconomic reforms. 

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Mt. Fuji

How long can Japan sustain its Mount Fuji of debt?

Date: 2 September 2014

The highest debt-to-GDP ratio among the world’s rich nations, allied to its ticking demographic time bomb, make Japan’s economic decline inevitable. The only question is whether the fall is gradual, or we see a spectacular crash with global repercussions. 

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ASEAN Banks

Banking integration in ASEAN gathers pace

Date: 1 September 2014

The ASEAN Economic Community, planned to come into effect in 2015, is expected to liberalise goods, capital and skilled labour flows in the ASEAN region. While there has been considerable progress in the area of trade integration, financial integration still lags behind. The ASEAN Banking Integration Framework, which aims to liberalise the banking market by 2020, could help pave the way for further integration and the entry of ASEAN banks into regional banking market 

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Month-end consolidation and adjustments difficult to predict.

US Dollar Consolidating in Month-end

Date: 29 August 2014

The US dollar is consolidating, largely within yesterday's ranges.  Month-end and quarter-end hedge and portfolio adjustments are notoriously difficult to predict.  There is also large option expires today.  Given the EU Summit this weekend, a holiday in the US on Monday, and no fewer than five central bank meetings among the high-income countries next week, the broad consolidative, even in choppy, tone is likely to carry into the weekend.  

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Shanghai Husi Food Company

Blowing the lid off food safety in China

Date: 28 August 2014

In July, Shanghai’s Dragon TV exposed illegal food handling practices by Shanghai Husi Food Co., a major meat supplier to multinational corporations such as McDonald’s and KFC.

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An increase in goal tax is expected to scale India's renewables back up.

Coal Tax Increase Scales Up Indian Renewables

Date: 20 August 2014

India needs economic growth for sustainable development, which in turn requires access to clean, convenient and reliable energy. An estimated 400 million people still lack access to electricity, and blackouts are still common across the country. 

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Russian flag held high a midst unraveling of events in Ukraine.

Russia Counting the Cost of Adventure in Ukraine

Date: 19 August 2014

Despite Russian humanitarian efforts, Ukrainian government is convinced the whole thing is a pretext for Putin to send in armed troops to "protect" the humanitarian mission of the convoy - and no one is too sure how things will pan out.

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Firmer Dollar Against Most Currencies Except the Sterling

Firmer Dollar Against Most Currencies Except the Sterling

Date: 18 August 2014

Amid light new, the US dollar is slightly firmer against most of the major currencies, except sterling.  Carney's comments over the weekend, suggesting that the BOE will not necessarily wait for wages to rise before hiking rates, helped lift sterling after a six-week decline.  

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BRICS countries come together to form international financial architecture.

NDB and AIIB Initiatives Sound Global Finance Wake Up Call

Date: 12 August 2014

 July 2014 marked the seventieth anniversary of the Bretton Woods conference, which laid the foundation for the post-WWII international financial system. The conference established the IMF to stabilize the world economy and the World Bank to finance post-war reconstruction. Both have evolved into pillars of present-day global finance.

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From Tecchi, emerging markets in the week ahead.

Weekly Preview: Emerging Markets Set the Tone

Date: 11 August 2014

With many major idiosyncratic EM risk events now behind us, the general tone will be almost entirely set by the mood in developed markets and ongoing geopolitical events. Still, we think the recent sell-off in global financial markets may have created some opportunities to establish EM trades at better level. Long MXN and INR, for example, seem to offer good short-term opportunities.

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China's city Xi'An expecting growth to slow long term despite early stimulus.

Slower Growth for China on the Horizon

Date: 11 August 2014

China’s growth outlook is the focus of analysts and economic policymakers all around the world. Nobody can afford now to ignore the scale of the economy and its impact on the global growth outlook. China already accounts for more than 12 per cent of world output in nominal terms and that share continues to grow steadily.

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The world economy is deeply affected by geopolitical risks.

Geopolitical Risks Ahead of the Weekend as Falling Yields Weigh on Dollar

Date: 8 August 2014

The key driver of the global capital market is the heightened geopolitical risks ahead of the weekend.  These now include the US air strikes in Iraq, as well as a sense that the situation in the Ukraine is reaching an inflection point.  Putin needs to step up his support for the insurgents in east Ukraine in some fashion, or risk losing that insurgency effort. 

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Mario Draghi finds glimmer of hope in even the worst conditions.

Counting Down the Hours, Waiting for Draghi

Date: 7 August 2014

The US dollar recouped some of the modest losses seen in North America yesterday.  The focus is not, though, so much on the US today.  The Bank of England, and even more important for the markets today, the ECB meets.  Draghi's press conference is the highlight of the remainder of today's 24-hour session.  

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British PM David Cameron announces cutbacks to immigrant benefits.

European politics dances to the drum of the far right

Date: 6 August 2014

Instead of championing the EU and the economic benefits of immigrants, Europe’s mainstream parties are moving further to the right. David Cameron’s clampdown on immigrant benefits was one policy designed to win back votes from far-right party UKIP.

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Economic calm despite a busy week ahead.

Quiet Start to the Week Despite Upcoming Economic Events

Date: 28 July 2014

This is an eventful week, but the economic calendar starts slowly.  The FOMC meeting, first look at Q1 US GDP and the US jobs report, are the highlights.    The capital markets are also off to a slow start.  The US dollar is narrowly mixed.  Against most of the major currencies, the greenback has been confined to about a 15 tick range. 

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All new lows for the Euro in 2014.

Euro Hits All New 2014 Lows

Date: 23 July 2014

The euro slipped through the low of the year and the weekly trend line going back to 2012. However, it found bids near $1.3460 and has recovered a bit.

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Asia’s Economic Strategy Beyond Free Trade Agreements

Asia’s Economic Strategy Beyond Free Trade Agreements

Date: 11 June 2014

The launch of negotiations on the Trans-Pacific Partnership (TPP) (in APEC’s backyard led by the United States) and (later) the Regional Comprehensive Economic Partnership (RCEP) (under the umbrella of ASEAN) is dominating thinking about regional integration. These agreements are designed in part to leverage value out of the plethora of bilateral free trade agreements (FTAs) negotiated over the past 15 years. Yet trans-regional FTAs, like the proposed TPP, are only a small step, incidental to realising the potential of Asian economic integration.

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Western Hypocrisy? – Why Is China Always Chided For Currency Intervention, But N

Western Hypocrisy? – Why Is China Always Chided For Currency Intervention, But Not Europe?

Date: 22 May 2014

Recently, China's yuan has depreciated, and there is some evidence that Chinese officials got the ball rolling and may be continuing to guide the currency lower. This has been the cause of great consternation for G7 policy makers. Yet while the U.S. and Europe often issue statements against Chinese currency intervention, little is done when European officials purposely talk the euro lower.

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5 Developments To Look Out For In Asian Bond Markets In 2014

5 Developments To Look Out For In Asian Bond Markets In 2014

Date: 20 May 2014

This year is shaping up to be another challenging year for bond markets in Asia after a see-saw 2013 which saw prices rise at the start of the year, and then fall back on news that the US Federal Reserve plans to reduce or “taper”its quantitative easing operations.

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Dongguan Factory Strike: A Turning Point For Chinese Labour?

Dongguan Factory Strike: A Turning Point For Chinese Labour?

Date: 19 May 2014

Last month, tens of thousands of Chinese workers staged a massive strike at a shoe factory in Dongguan, lasting over two weeks and involving over 40,000 people. The strike was notable for both for its scale and substance – the workers not only demonstrated significant legal knowledge and political savvy, but also showed a wider sense of workers' consciousness.

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Why Hasn't The US Sanctioned Gazprom?

Why Hasn't The US Sanctioned Gazprom?

Date: 15 May 2014

As tensions between the West and Russia continue to rise over Ukraine, it is notable that no sanctions have yet to be placed on Russia’s state gas giant Gazprom. Given Gazprom's centrality to the Russian economy, it's unlikely that Putin won't react if the company does come in for Western sanctions.

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Why Obama Should Abandon The Asian Pivot

Why Obama Should Abandon The Asian Pivot

Date: 12 May 2014

The U.S. pivot to Asia has undergone considerable challenges ever since it was first announced in November 2011. Ultimately it is highly unlikely to achieve its main aim – to compel China to accept U.S. leadership in the region.

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Why ASEAN Is Mongolia’s Best Chance For A Prosperous Future

Why ASEAN Is Mongolia’s Best Chance For A Prosperous Future

Date: 5 May 2014

Despite its great potential, the Mongolian economy has not developed as well as expected – a trend that can be reversed with sound regional integration. But finding the right economic partners is difficult; and the nation runs the risk of falling behind as an underdeveloped and isolated “white spot” on East Asia’s dynamically advancing economic integration map.

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Bottled Water: The Biggest Marketing Scam Of The Century?

Bottled Water: The Biggest Marketing Scam Of The Century?

Date: 2 May 2014

 In many developed countries around the world, tap water is widely considered to better for you than the bottled variety and subject to more stringent safety checks. Why then do we insist on purchasing something which is up to 300 times more expensive than what comes out of our taps?

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Why Economists Can No Longer Ignore Environmental Issues

Why Economists Can No Longer Ignore Environmental Issues

Date: 29 April 2014

The concept of environmental capital is throughly entrenched in policy dicussions but largely missing from mainstream economic curriculums. This column argues environmental externalities, climate change, and constraints on natural resources will constantly and deeply affect humankind’s future. The teaching of economics, especially growth economics, should stop ignoring them.

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Five Signs That Greece Is On The Road To Recovery

Five Signs That Greece Is On The Road To Recovery

Date: 25 April 2014

The long-troubled Greek economy successfully returned to international bond markets this month with relative success. Having been at the centre of the European debt crisis, how important is Greece’s recovery to the region?

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Why Is India Still The World’s Largest Arms Importer?

Why Is India Still The World’s Largest Arms Importer?

Date: 24 April 2014

Although not the world’s top military spender, India has been the world’s largest arms importer since 2010. The need to modernise has indeed been one major reason for India’s status as top spender on arms imports. But there are other factors at work too.

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The New Geopolitics Of Risk

The New Geopolitics Of Risk

Date: 23 April 2014

The Cold War has not made a comeback. Rather, the geopolitics of new risks is taking off. The Ukraine crisis is just a tip of the iceberg.

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Can Asia Tackle Its Inequality Problem?

Can Asia Tackle Its Inequality Problem?

Date: 22 April 2014

While emerging Asia continues to achieve a stunning performance in poverty reduction, the gap between rich and poor keeps widening too. How sustainable is this poverty reduction in the face of rising inequality?

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Why Central Asia Needs Economic Integration

Why Central Asia Needs Economic Integration

Date: 21 April 2014

Central Asia has for centuries been seen as a neglected Russian “backyard,” but international interest in the region has increased over the last two decades because of its vast stores of energy and natural resources. But to achieve a brighter future the region must pursue economic integration.

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Will Russian Sanctions Compromise Global Energy Security?

Will Russian Sanctions Compromise Global Energy Security?

Date: 17 April 2014

After a series of headline-grabbing statements about the possibility of “switching” European consumers over to American gas, the US media hastened to announce the launch of Obama’s oil and gas offensive against Russia. In reality, the EU is not prepared, neither technically nor in terms of price, to buy its energy resources from the US. It would take at least ten years to adapt even the technically advanced German energy system to work with American gas supply. In a crisis, when it is particularly urgent to see a quick return on an investment, such projects are unrealistic.

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Why Taiwan Needs Regional Integration

Why Taiwan Needs Regional Integration

Date: 16 April 2014

Recent demonstrations in Taiwan against a trade deal with China reflect the public’s deep mistrust with the mainland. Yet Taiwan needs these trade deals to sustain its economy, not just with China, but with the rest of Asia.

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ECB Quantitative Easing: Just A Matter Of Time?

ECB Quantitative Easing: Just A Matter Of Time?

Date: 14 April 2014

Even as ECB officials continue to play down the generalized risk of deflation in region and claim that inflation expectations remain anchored, experts are calling on the central bank to undertake unconventional measures to combat weakness in price pressures that threatens to undermine the euro area’s recovery. The issue is no longer if the ECB will undertake quantitative easing, but when.

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Why Businesses Must Focus On Long-Term Growth

Why Businesses Must Focus On Long-Term Growth

Date: 11 April 2014

Excessive short-termism is always a problem for policy, but the Global Crisis has brought it sharply into focus. This column introduces a report that discusses how a shift to longer-term solutions is necessary and possible. A key message is that businesses as well as governments need to take a longer-term view. The report identifies ways to overcome the current impasse in key economic, climate, trade, security, and other negotiations.

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Singapore’s Impotent Immigration Policy

Singapore’s Impotent Immigration Policy

Date: 10 April 2014

The large influx of foreign workers into Singapore has begun to cause tension between immigrants and locals. The obvious solution for the Singaporean government, would be to drastically decrease the number of foreign workers. But here there is a problem: its development model relies on foreign workers.

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Can Bangladesh Live Up To Its Economic Promise?

Can Bangladesh Live Up To Its Economic Promise?

Date: 8 April 2014

Thanks to its strategic geopolitics, Bangladesh is now being courted by both China and the United States. It is a historical moment when right economic policies, appropriate investment levels and favorable demographics could unleash a period of growth and prosperity. However, with wrong policies, Bangladesh could suffer a new era of stagnation, poverty and fall behind its regional peers.

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Why Unfair Distribution Of Wealth Will Lead To Our Downfall

Why Inequality Will Lead To Our Downfall

Date: 4 April 2014

If America’s distributional game continues to create a few big winners and many who consider themselves losers by comparison, the losers will try to stop the game – not out of envy but out of a deep-seated sense of unfairness and a fear of unchecked power and privilege. Then we all lose.

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Why Russia & The US Must Work Together On Ukraine

Why Russia & The US Must Work Together On Ukraine

Date: 2 April 2014

Despite their current animosities, Russia and the U.S. need each other to maintain influence in Eastern Europe. For different reasons, neither side wants the crisis to continue, and each has a different read on the situation.

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How Will Emerging Markets Retaliate Against Fed Tapering?

How Will Emerging Markets Retaliate Against Fed Tapering?

Date: 1 April 2014

To navigate the U.S. away from the huge monetary stimulus, the Federal Reserve has initiated tapering. But in an integrating world, the emerging economies, especially India, China and Brazil, will see collateral liquidity damage. How will the Fed enforce its mandate? How will central banks in emerging markets react?

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Why A Major War In Asia Is Unlikely

Why A Major War In Asia Is Unlikely

Date: 31 March 2014

The rising tensions between China and Japan over the Senkaku/Diaoyu islands has led some experts to draw parallels with the Sarajevo incident, which sparked off World War I in Europe. Yet while is a significant risk that the conflict will result in a military confrontation, an all-out war is unlikely given economic reasons.

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How Did Brazil’s Economy Go From Promising To Precarious?

How Did Brazil’s Economy Go From Promising To Precarious?

Date: 27 March 2014

This year’s FIFA World Cup and the 2016 Olympics seem to be a coronation of Brazil’s undeniable and startling success. But with the Brazilian presidential elections looming later this year, a surge in street protests and growing economic unrest, will Latin America’s largest nation cope under the international spotlight?

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Why The Yuan Won’t Replace The USD As The World’s Reserve Currency

Why The Yuan Won’t Replace The USD As The World’s Reserve Currency

Date: 26 March 2014

In the eyes of many commentators, the US dollar’s reign as the global reserve currency is under threat from two angles. The first comes from within the US—a permanent deficiency in demand or secular stagnation; and the second from the People’s Republic of China (PRC), and in particular from a fully convertible yuan.

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Russia Looks East As Relations With West Deteriorate

Russia Looks East As Relations With West Deteriorate

Date: 25 March 2014

The standoff over Ukraine has seen Europe and the U.S. warn Russia of economic isolation. But this is unlikely to matter, as it would only accelerate a Russian pivot towards China – with an imminent multi-billion natural gas deal set be a centerpiece of that strategic shift.

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What The ‘Chinese Dream’ Really Means

What The ‘Chinese Dream’ Really Means

Date: 24 March 2014

For a year, President Xi Jinping and Premier have talked about the Chinese dream, while outlining massive reforms to pave the way for the realization of the dream. As the Two Sessions took place in Beijing, China’s leaders took a hard look at the future challenges. Is the Chinese dream still reachable?

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Is There Room For Another International Currency?

Is There Room For Another International Currency?

Date: 21 March 2014

The dollar remains dominant in the global monetary system. The clearest sign for its prevailing status is the dollar’s role as an exclusive currency used in the global oil market. This column suggests that there is room for more than one international currency even in a market as homogenous as the oil one. This is consistent with the view that network increasing returns are not as strong as sometimes supposed, first-mover advantage is not everything, and incumbency is no guarantee for continued dominance.

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UK Economy: Recovery Is Futile If It’s Led By The Finance Sector

UK Economy: Recovery Is Futile If It’s Led By The Finance Sector

Date: 20 March 2014

Whether the UK is in recovery or not depends on who you ask and, more importantly, the political stake they have in the answer. At present, most of the growth is being powered by the finance sector. But what’s the point of a recovery that only benefits the rich and does nothing to address inequality?

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China’s Most Powerful Economic Weapon: Education?

China’s Most Powerful Economic Weapon: Education?

Date: 19 March 2014

China’s students are not only achieving the best results in international educational assessment, but are also receiving the most in educational investment than the rest of the world. Traditionally, Chinese people have been highly appreciative of the role of education in development, and the national obsession with education is also reflected in government policy.

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Why Russia Really Wants Crimea

Why Russia Really Wants Crimea

Date: 18 March 2014

According to some analysts’ estimates, Russia’s incursion into Crimea could cost the country more than $70 billion in economic damage. Yet the determination of Putin to control the breakaway region may be driven by a deeper reason: to gain the wealth of offshore gas and oil reserves; and cut off Ukraine’s hopes of energy independence from Moscow.

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Can Myanmar Avoid Recent Emerging Market Volatility?

Can Myanmar Avoid Recent Emerging Market Volatility?

Date: 17 March 2014

After half a century of isolation, Myanmar’s immediate challenge is to sustain reforms, boost foreign investment and diversify its industrial base. Unlike other Asian tigers, it must cope with a far more challenging international environment.

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Why Russia Fears ‘Losing’ Ukraine

Why Russia Fears ‘Losing’ Ukraine

Date: 14 March 2014

There is a common perception that Russia's move on Crimea shows its strength. A closer examination suggests it is more complicated that it may seem. Like the bully at the school yard, the aggressiveness conceals weaknesses.

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Can Chinese ‘Soft Power’ Win Hearts & Minds In Africa?

Can Chinese ‘Soft Power’ Win Hearts & Minds In Africa?

Date: 13 March 2014

China’s links to Africa have grown from mere trade partnerships, to increased media and educational tie-ups. But unless Chinese media and web services can be counted on to provide information about Beijing’s ventures in Africa independently and accurately, viewership will suffer and the “soft power” offensive will falter.

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Bitcoin Crash: The End Of A Gold Rush?

Bitcoin Crash: The End Of A Gold Rush?

Date: 12 March 2014

Bitcoin, in its present form, has stark similiarites with gold. Both are backed by no one; both are, relative to fiat currency, inconvenient for day to day use; and both lack intrinsic value. As it turns out, another comparison can be made with bitcoin and gold: the collapse of Mt.Gox share similar lessons to the end of the Australian and New Zealand gold rushes in the 19th century.

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Do Children Bring Happiness Or Misery?

Do Children Bring Happiness Or Misery?

Date: 11 March 2014

Study after study has shown that those who live with children are less satisfied with their lives than those who do not. Is there something wrong with these empirical analyses? Or is it that happiness measures are unreliable? This column argues that the results are correct but that comparisons of the wellbeing of parents and non-parents are of no help at all for people trying to decide whether to have children.

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Will New Risks End Nigeria’s Economic Dream?

Will New Risks End Nigeria’s Economic Dream?

Date: 10 March 2014

Only a year ago, Nigeria’s economic dream – to be one of the world’s top 20 economies by 2020 – still seemed reachable. Today, domestic threats are increasing, while the international environment is far more challenging.

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Russia vs. The US: Superpowers Bluff Over Ukraine?

Russia vs. The US: Superpowers Bluff Over Ukraine?

Date: 6 March 2014

Following Russia's military incursion in Ukraine, the US immediately threatened various sanctions against Moscow, including personal travel bans, an ejection from Russia from the G8, and trade and finance measures. In retaliation, a Putin advisor warned that Russia could abandon the dollar as a reserve currency and/or default on loans to US banks. Neither party however can afford any form of action, nor do they have any real influence over each other’s economies.

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India’s Urban Work Boom Is Leaving Women Behind

India’s Urban Work Boom Is Leaving Women Behind

Date: 4 March 2014

India has one of the lowest female workforce participation rate in the world. In urban areas, the ratio is even worse. According to Sher Verick, a senior fellow at the International Labour Organisation, the two main factors keeping women at home are social customs and very low education levels.

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