Economy Business and Finance News

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.   Read more

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.   Read more

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.   Read more

The debate rages on about Greece's EU future.
Greece Exit (GREXIT) - A Boon or a Bane?
Date: 24 January 2015

Greece joined the Eurozone as its 12th member in 2001 but was the first to be bailed out in 2010 ever since the Eurozone crisis in 2009.   Read more

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.   Read more

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.   Read more

Experts are suspicious about the TTIP goals.
Calculating the Risks and Rewards for the U.S.-EU Transatlantic Trade and Investment Partnership (TTIP)
Date: 23 January 2015

Negotiations between the European Union (EU) and the United States (US) on the Transatlantic Trade and Investment Partnership (TTIP) are currently dragging on without a clear time target—no wonder in view of the highly complex topics on which to agree.   Read more

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.   Read more

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%.   Read more

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.   Read more

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.   Read more

Will a Syriza win be a setback for Greece?
The Greek Election is Closer and so is a Possible Syriza Victory
Date: 22 January 2015

The European Central Bank’s decision to spend 60 billion euro a month to buy sovereign debt in order to fight deflation and revive the crumbling Eurozone coincides with a snap Greek parliamentary election on January 25.   Read more

1.1 Trillion is a lot of euros.
Will ECB Asset Purchases Work Like in the U.S. and U.K.?
Date: 22 January 2015

By allowing the European Central Bank (ECB) to start buying debt issued by its member states, the Eurozone is copying a strategy now associated with the earlier return to growth in the US and UK.   Read more

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.   Read more

Optimism abounds in the Philippines, though challenges remain.
The Philippines Appears Poised Economic Growth in 2015
Date: 22 January 2015

The economy of the Philippines hit some rough patches in 2014. The outlook for 2015, on the other hand, is fairly strong.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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).   Read more

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.   Read more

Many questions remain about the potential fallout from the ECB meeting.
A Primer for the ECB Meeting and What it Means for the Markets
Date: 21 January 2015

1. What is the ECB going to do? The ECB is widely expected to announce that it will accelerate and broaden its efforts to expand its balance sheet.   Read more

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.   Read more

Challenges persist for Muslims in France.
Paris attacks reveal exclusion of French Muslims
Date: 21 January 2015

While nothing excuses the terrorist killings in Paris, the French state can no longer turn a blind eye to the marginalization of Muslims.  Read more

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.   Read more

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.   Read more

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.   Read more

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".   Read more

President Obama hopes to leave a legacy of bilateral success with China.
Should China Expect Confrontational Policies from Washington?
Date: 19 January 2015

In 2013, the Sino-US relations ended with concern over strategic mistrust. In 2014, bilateral relations were characterized by a sense of optimism. While bilateral trust may endure through the Obama era, challenges will ensue thereafter.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Market participants will be very busy this week.
Has the Market Expectation Pendulum Swung as Far as it Can?
Date: 18 January 2015

The investment climate has become more treacherous.  Weak wage growth and disinflationary headwinds are making market participants question likelihood of a Fed rate hike around mid-year.   Read more

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.   Read more

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.   Read more

Market participants are still assessing the SNB decision.
After the SNB Decision, the Reverberations Continue
Date: 17 January 2015

Saying the US dollar had a good week even though it lost 18.5% against the Swiss franc may be a bit like the old joke about asking Mrs. Lincoln, "besides that, how was the play?"   Read more

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.   Read more

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.   Read more

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.   Read more

Hanoi has handled recent maritime disputes with aplomb.
Could Vietnam Become a Proxy for Others in Maritime Disputes?
Date: 16 January 2015

Vietnam’s diplomacy saw many successes in 2014, but also faced many challenges. In early May, the country saw the worst maritime tension with China since their 1988 naval clashes in the South China Sea (SCS).   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Is it premature to dismiss Prime Minister Hun Sen’s reform efforts as cosmetic?
Observers are Skeptical of Cambodia's CPP Reform Efforts
Date: 15 January 2015

Cambodia had a year of political reform in 2014, and observers are sceptical about how much change it will bring. But it might be premature to dismiss Prime Minister Hun Sen’s reform efforts as cosmetic.   Read more

Taiwan's political future rests more and more with the younger generation.
The Larger Role Played by Taiwan's Younger Generation
Date: 15 January 2015

It has been widely argued that the defeat of Taiwan’s ruling Nationalist Party’s (KMT) in the ‘nine-in-one’ local elections revealed nationwide disillusionment with the government.   Read more

Malaysia's GLC's are crowding out private investment.
The Power of Malaysia's Government-Linked Companies
Date: 14 January 2015

Malaysia’s government-linked companies (GLCs) are, relatively speaking, among the most extensive and powerful in the world in terms of capitalisation, market presence and socio-political mandate.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Redistributing wealth between shareholders and CEO's benefits few.
Does Maximizing Shareholder Wealth Accomplish Anything Else?
Date: 13 January 2015

Modern capitalism has a massive structural flaw in one of the cornerstones of its existence. The corporations which form the predominant business structure and which are the main instrument for dividing wealth have been operating on a false premise.   Read more

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.  Read more

Larger cities may be out of a migrant's reach, but not smaller ones.
China's Rural to Urban Migrants Follow a Moderately Easier Path
Date: 13 January 2015

The household registration (‘hukou’) system in China, originally adopted in 1958, was finally put on the national reform agenda in July 2014. But how significant are the reforms?   Read more

Economic data and now corporate earnings add to the economic news slate.
U.S. Earnings Season Begins; Sweden, China and Japan also in the Economic News
Date: 13 January 2015

Brent oil is off another 3% today, taking its decline since the end of last year to 20%.  This is overshadowing other macro-economic forces.  With the Federal Reserve among the least likely central banks to respond, the dollar is firm, even if within recent ranges.   Read more

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?   Read more

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.   Read more

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.   Read more

Violating Indonesian waters pays a heavy price
Indonesia Asserts that Natuna and its Gas Reserves are in their Waters
Date: 12 January 2015

The mutuality of Asia’s economic interests centring on deepening economic integration is a potential foundation for building an Asian economic community that encompasses the ASEAN 10 plus their six neighbours, Japan, South Korea, China, India, Australia and New Zealand.   Read more

It appears the US study on China's nine-dash line contains flaws
China's nine-dash line Interpretation Heats Up with US Study
Date: 12 January 2015

The US State Department’s analysis of China’s nine-dash line, which it released in advance of China’s Position Paper on the South China Sea arbitration case with the Philippines, is in part conceptually and legally flawed.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Central Asian migrants are grappling with twin concerns
Kyrgyzstan’s Migrants Wary on Russian Economy, but Excited by Closer Ties
Date: 9 January 2015

It is the holiday season in Kyrgyzstan and thousands of laborers have come from Russia to celebrate with their families. But this year, some are unsure if they will return in spring, the traditional migration season.   Read more

Impact investing in Africa can fuel sustainable development
Fueling sustainable development in Africa through Impact Investing
Date: 9 January 2015

The impact investing space is growing in Africa and could be the trigger this developing continent needs for faster sustainable development.   Read more

Bangladesh is making progress in gender equality.
State Control of Grameen Bank Would Set Back Bangladeshi Gender Equality
Date: 9 January 2015

Increasing state control over Grameen Bank will not serve Bangladesh’s best interests. And it will be detrimental to the nation’s progress on gender equality.   Read more

A year of solid progress in Malaysia could stall in 2015
Challenges Mount for Malaysia's Government in 2015
Date: 9 January 2015

After a year of solid achievement on the economic front, Malaysia’s leaders will face difficult circumstances as they implement reform in 2015.   Read more

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.   Read more

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.   Read more

Sometimes the noise is too much for the signals.
Separating the Signals from the Noise - and There is a lot of Noise
Date: 8 January 2015

The markets are an incredible aggregator of information.  However, because of a tsunami of information, sometimes investors have difficulty in distinguishing the signal from noise.   Read more

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%.   Read more

The U.S. economy seems mostly resistant to Europe's woes, so far.
Dollar Strength, ECB QE and Aussie Economic News
Date: 8 January 2015

The combination of the outright deflation in the Eurozone and the seemingly immunity of the US economy to the poor global developments has encouraged investors to extend the dollar's gains.   Read more

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.   Read more

Pakistan's list of issues is long and does not have a clear order of priority
Pakistanis May Deserve a Better 2015, but it's Unlikely it Will Happen
Date: 8 January 2015

Pakistan is in a state of discord. Its civilian governance structure is becoming corrupt and oligarchic. Its façade of democratic order belies a more tawdry reality characterised by money, patronage and cronyism, in which parliament exists to enhance the privileges of the few.   Read more

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.   Read more

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.   Read more

Mongolia's 2014 included foreign policy turmoil and economic crisis
Mongolia's 2014 Was Supposed to be Relatively Quiet
Date: 7 January 2015

It was meant to be a relatively quiet year for Mongolia. There were no parliamentary or presidential elections and most observers expected that some of the economic troubles Mongolia has been facing would be resolved.   Read more

The future price of oil is anyone's guess and there are many guesses.
Oil Price Trajectory Variables to Consider in 2015
Date: 7 January 2015

As we ring in the New Year, let us take stock of where we are at with the oil markets. Last year proved to be a momentous one for the oil markets, having seen prices cut in half in just six months.   Read more

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.   Read more

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.   Read more

Luxembourg tax laws at the center of latest report
LuxLeaks Scandal Reveals International “Race to the Bottom”
Date: 7 January 2015

Countries are competing to lower their tax rates to please the corporate giants, but the result is a massive collective loss of revenue. Only international coordination can wipe out the practice and defeat the negative influence of the Big Four accounting firms.   Read more

Malaysia makes a good case study for global value chains and SME
Small and Medium Enterprises (SME): Why Internationalization Matters
Date: 6 January 2015

Regionalism in Asia led by global value chains (GVCs) and free trade agreements (FTAs) has increasingly put the spotlight on small and medium-sized enterprises (SMEs). As one of Asia’s success stories in internationalization, Malaysia offers interesting insights.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Sri Lanka's President has been slipping in the polls
What are Sri Lanka President Rajapaksa's Election Chances?
Date: 5 January 2015

Two years before an election was due, President Percy Mahinda Rajapaksa of Sri Lanka has called an early poll for 8 January, seeking an unprecedented third term in office made possible by his revision of the constitution.   Read more

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.   Read more

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.   Read more

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.  Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Japan's declining population is a serious problem
Should Japan Look Beyond its Borders to Stem the Population Slide?
Date: 2 January 2015

Japan’s declining population is a serious problem. Unless the nation can devise policy strategies either to arrest the decline or deal effectively with its impacts, in the long run Japan will find its path to sustained economic growth blocked.   Read more

Low oil prices may work to undermine the Malaysian economy
Malaysian Economy Potentially Threatened by Falling Commodity Prices
Date: 1 January 2015

World oil prices are falling precipitously. For an oil exporter like Malaysia, that is definitely bad news. Unless the country can diversify its economy, it may find it difficult to navigate its way through the economic challenges it faces on its way to higher income status.   Read more

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.   Read more

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?   Read more

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.   Read more

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.   Read more

Next year will easily be one of Pakistan's toughest
Pakistan's Economic Malaise and Guarded Optimism
Date: 30 December 2014

Pakistan in 2014 was characterised by a mixture of ongoing malaise and, in some instances, guarded optimism.   Read more

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.   Read more

The world's major currencies swing more on news in thin markets
Spain Surprises, the ECB Money Supply and Chinese Monetary Policy
Date: 30 December 2014

The approaching New Year thins market participation.  This makes for some choppy price action.  The result is weaker equity markets and a softer US dollar.  The greenback is lower against the euro and sterling.   Read more

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?   Read more

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.   Read more

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.   Read more

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.   Read more

Despite challenges, China is not necessarily on the brink of collapse
Reasons Why Betting on a Collapse in China may be Unwise
Date: 29 December 2014

George Orwell once observed ‘Whoever is winning at the moment will always seem to be invincible’. Not long ago, many in the West declared that China would soon be the number one economy in the world.   Read more

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.   Read more

Six things to ponder during the final week of 2014
Thoughts to Mull in the Last Week of the Year
Date: 28 December 2014

We identify six key issues for investors in the holiday-shortened week ahead.   Read more

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.   Read more

Some of India's States Lag Far Behind
Uneven Economic Development Among India's States
Date: 27 December 2014

A handful of India’s regions have marched ahead economically, leaving others behind.   Read more

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.   Read more

The existing currency accord can solve some of today's imbalances.
Calls for a New Global Currency Accord - What About the Existing One?
Date: 27 December 2014

At best, it is the holiday season when hopes and wishes abound.  It may be as it was for Ebenezer, "an undigested bit of beef, a blot of mustard, a crumb of cheese, a fragment of undone potato."  At worst, it is spiked eggnog and the peppermint schnapps.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

The looming AEC deadline has been called overambitious, among other things.
Four Pillars of the AEC and the Looming Implementation Deadline
Date: 25 December 2014

The ASEAN Economic Community (AEC) is unlikely to come into being by its December 2015 deadline due to its overambitious design and apathetic implementation. But there are still plenty of things that ASEAN can do to prepare for when the AEC is eventually launched.   Read more

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.   Read more

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.   Read more

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.   Read more

The holiday-shortened week consolidates dollar gains and sterling losses
Investors Reign(deer) in Gains and Losses During a Holiday-Shortened Week
Date: 24 December 2014

The US dollar’s gains scored yesterday in the wake of a strong upward revision in Q3 GDP to 5% pared slightly today in extremely thin market conditions.  The euro sold to a new 28-month low (~$1.2165) yesterday and is struggling to re-establish a foothold above $1.22.   Read more

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.   Read more

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.   Read more

The mess that is Russia, China and Oil will be difficult to untangle
The Gordian Knot that Binds Russia, China and Oil
Date: 23 December 2014

As the year winds down, a Gordian knot tying Russia, oil prices and China together is receiving a great deal of attention.  Let us see if we can unravel some of the confusing twists and turns.   Read more

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.   Read more

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?   Read more

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.   Read more

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.   Read more

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.   Read more

Jokowi's election was a tough democratic test for Indonesia
More Thoughts on the Economic Prospects for Indonesia
Date: 22 December 2014

We begin the 2014 ‘year in review’ series, looking at developments in Asia over the year past and the prospects for the year ahead, with a look at how Indonesia is travelling and the prospects for its economy.   Read more

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.   Read more

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.   Read more

Top 5 Global Economic News Events for the Week
Global Economic and Market Preview
Date: 21 December 2014

Shaping the holiday week, we identify five general points that we expect to underpin the US dollar and equities.   Read more

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.   Read more

The new Chinese Coast Guard, better late than never?
China's Coast Guard - Smooth Sailing or Rough Seas for its Neighbors?
Date: 20 December 2014

The establishment of the China Coast Guard (CCG) in 2013 created a huge stir. Neighbouring countries may see the CCG as a major instrument for China to reconfigure maritime power structure in the region.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

The EU Summit, and Russia, face many challenges
Russia, Juncker's Investment Scheme and Greece
Date: 18 December 2014

The EU Summit starts today. There are three important issues: Russia, Juncker's investment scheme, and Greece.   Read more

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%.   Read more

The Fed's monetary policy will still be data-driven.
Some Additional Thoughts on the Fed Statement, plus a Swiss National Bank Surprise
Date: 18 December 2014

The Swiss National Bank surprised the market by announced a negative 25 bp rate on sight deposits and lower the 3-month Libor range to -0.75% to 0.25%.  Our heuristic approach to the Federal Reserve is that the policy thrust emanates from the core leadership consisting of Yellen, Fischer and Dudley.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.’   Read more

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."   Read more

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.   Read more

Western sanctions and plunging oil are decimating the Russian economy
Russian Economy Pays High Price for ‘Dutch disease’
Date: 17 December 2014

A nation catches ‘Dutch disease’, when it relies heavily on a single commodity and fails to diversify its economy. Structural weaknesses have combined with falling oil prices and sanctions to derail the Russian economy.   Read more

Do Chinese business raids present conflicting economic reform objectives?
Surprise Raids in China Part of an 'Anti-Monopoly Campaign'
Date: 16 December 2014

Surprise raids by Chinese government officials on the offices of major multinationals in China to catch out monopolistic business activity have created perceptions of bias against foreign firms in the enforcement of the anti-monopoly law.   Read more

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.   Read more

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.   Read more

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.   Read more

China's above world trend growth rate stays in place
How Long Can China's 'Catch-Up' Growth Rate Persist?
Date: 15 December 2014

Those in the business of long-run GDP projections expect Asia, and particularly China, to keep growing above world trend rates for some years.   Read more

A global financial transaction tax - dead or alive?
Is a Global Financial Transaction Tax a Sound Solution?
Date: 15 December 2014

The Brisbane G20 Summit offered civil society groups an opportunity to renew demands for a financial transaction tax (FTT). But in the end it proved a missed opportunity to build international cooperation on financial reform.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.    Read more

China's response to the Philippines is due December 15
China-Philippine South China Sea Dispute Approaches a Critical Point
Date: 12 December 2014

The ongoing disputes between the Philippines and China in the South China Sea are about to reach a critical point.   Read more

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.   Read more

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.   Read more

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.   Read more

Are banks still 'too big to fail' and will taxpayers always be the rescuers?
The Federal Reserve Could Redefine 'Too Big to Fail'
Date: 11 December 2014

A month after America’s banks witnessed their largest quarterly revenue increase since 2009; Federal Reserve announced that it would increase capital requirements for eight of the largest banks across the country.   Read more

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.   Read more

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%.   Read more

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.   Read more

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.   Read more

Taiwan and its neighbors should be wary of complacent behavior
Hong Kong, Macao, and Taiwan Should Address Structural Reforms
Date: 10 December 2014

The old growth engines of Hong Kong, Macao and Taiwan are decelerating. The new ones are predicated on deeper economic ties with China.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Low oil prices are causing cracks in Norway's oil-based economy
Early Signs of Cracks Showing in Norway's Economy
Date: 10 December 2014

New oil projects are being scrapped in Norway amid falling production and low oil prices.    Read more

Order in the markets seems to have derailed a bit
Market Order Seems to have Broken Down, at Least Temporarily
Date: 10 December 2014

Whatever order there was in the global capital markets has broken down.  They did not stabilize in Asia, but there is an attempt underway in Europe.   Read more

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.   Read more

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.  Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

China's swap lines expose misunderstandings about their use
Could Currency and Funding Mismatches be on the Horizon?
Date: 8 December 2014

The quarterly report by the Bank for International Settlements does not say it in so many words, but its warning of possible currency and funding mismatches illustrates why the much ballyhooed Chinese swap lines are misunderstood.   Read more

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.   Read more

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%.   Read more

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.   Read more

Diverging growth rates and interest rate differentials remain the major theme
There are No Outward Signs of an Abating Dollar
Date: 7 December 2014

The US dollar remains king.  It continues to receive support through the divergence in growth and interest rate differentials.   Read more

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.  Read more

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.   Read more

Malaysia is experiencing an education crisis
Malaysia's Education System Performance not Matching the Investment
Date: 5 December 2014

The Malaysian government should look to civil society for support in strengthening the nation’s education system.   Read more

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.   Read more

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.  Read more

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.   Read more

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%.   Read more

The dollar trend is intact, moving higher on the jobs report
The Dollar Moves Up on Another Strong U.S. Jobs Report
Date: 5 December 2014

The strength of the US employment report is seeing the dollar jump across the board.  The divergent theme is out in relief.   Read more

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.   Read more

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.   Read more

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.   Read more

The view of the European meltdown from key EU members
Key EU Members' View of the European Economic Crisis
Date: 4 December 2014

Europe's economic crisis is slowly but steadily eroding the political systems of many countries on the Continent. New actors are emerging and threatening the supremacy of the traditional players.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

The religious right is at the center of Abe's LDP
Religion's Place in Japan's Liberal Democratic Party
Date: 3 December 2014

With the snap election in Japan on 14 December looming, Japanese voters may not realise exactly what they are bargaining for if they re-elect an Abe-led Liberal Democratic Party government as expected.   Read more

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.   Read more

Fischer and Dudley suggest a 2015 rate hike could still happen
Fed Governors Comment that a Mid-2015 Rate Hike is Still 'Reasonable'
Date: 3 December 2014

Comments by Fischer and Dudley underscore the divergence theme; reaffirming the signal by Fed leadership that a mid-2015 rate hike is still "reasonable".  The disinflationary impulse from the drop in energy prices is temporary.  Instead, they emphasized the growth implications.   Read more

Abe and Jinping met at APEC to relationship build
Strengthening China and Japan's Relationship
Date: 2 December 2014

The meeting between Prime Minister Shinzo Abe and President Xi Jinping at the 2014 APEC summit was a temporary relief for both amid rising bilateral tensions over the last two years.   Read more

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.   Read more

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.   Read more

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%.   Read more

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.   Read more

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.   Read more

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.   Read more

Emerging Markets Preview of Economic News
A Preview of this Week's Events Among the Emerging Markets
Date: 1 December 2014

With the broader dollar appreciation trend losing steam in last several weeks, the fall in oil prices has become the main external variable determining EM performance.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Right-leaning revisionists are yet another of Abe's challenges
Revisionists Threaten to Isolate Japan
Date: 29 November 2014

Since Prime Minister Shinzo Abe’s return to power in December 2012, Japan’s diplomatic relations with South Korea has continuously worsened.   Read more

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.   Read more

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.   Read more

Trade experts offer little hope of TPA passing during Obama's term
Obama, the TPP, and Help from - Republicans?
Date: 28 November 2014

Are the stars aligning for both passage of a trade promotion authority bill by Congress and approval of the Trans-Pacific Partnership agreement?   Read more

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.   Read more

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.  Read more

Family succession is becoming a huge issue in China
Failing to Find Family Successors Could Threaten China's Economy
Date: 27 November 2014

China is facing a new economic crisis, and it is not about mounting local debt or even a rapidly slowing property market. The crisis in the making is about family business succession in the world’s second-largest economy.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Chinese diplomacy has many subtleties that must be understood
Recent Summits Expose China's Diplomatic Subtleties
Date: 24 November 2014

Much energy has been expended on projecting the impact of the rise of Chinese economic power on its political and military might and the strategic contest with the United States.   Read more

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).   Read more

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.   Read more

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.   Read more

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?   Read more

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.   Read more

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.   Read more

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.   Read more

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?   Read more

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.   Read more

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.   Read more

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.  Read more

Exports to East Asia are creating a 'global mall'
The East Asian 'Triangle Trade' has been a Huge Success
Date: 20 November 2014

Over the past decades, East Asia has been the most successful region in the world in building up cross-border supply chains and has subsequently become described as “Factory Asia” (Baldwin 2008).   Read more

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.   Read more

Territory dispute not quite over and there are economic ramifications
Thai-Cambodia Relations Holding Back Economic Development for Both
Date: 20 November 2014

Domestic uncertainties in Thailand and Cambodia have hindered progress along the heavily militarised border and the Preah Vihear temple dispute.   Read more

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.   Read more

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).  Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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).   Read more

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.   Read more

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.   Read more

Abe has made many advancements for his country during his tenure
Will Abe's Momentum Carry Over to the Next Japanese Leader
Date: 18 November 2014

On 17 December 2013, Prime Minister Shinzo Abe issued Japan’s first National Security Strategy (NSS). The document declares that Japan will make a more ‘proactive contribution to peace’ based on the principle of international cooperation.  Read more

Jinping and Abbott have an MoU on a FTA
The Potential for Australia and China's Free Trade Agreement
Date: 18 November 2014

The past week has seen big breakthroughs in Asia Pacific economic diplomacy. At the APEC summit, Xi Jinping and Shinzo Abe broke the diplomatic ice in the China–Japan relationship.   Read more

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.   Read more

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.   Read more

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’.   Read more

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.   Read more

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.   Read more

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).   Read more

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.   Read more

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%).  Read more

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.   Read more

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.   Read more

Jersey a UK tax haven
Luxembourg's Tax Haven - Different than the U.K.?
Date: 14 November 2014

The revelation of the leaked Luxembourg tax files and the related reporting of the extent of the tax avoidance industry in the UK should come as little surprise.   Read more

India is set to deal with the end of the QE by the Fed
India Looking Beyond the end of QE in the U.S.
Date: 14 November 2014

India was one of the hardest hit of the emerging markets after the US Federal Reserve first hinted it would cut back its quantitative easing program in May 2013.   Read more

Signs point to optimism for India's future
India's Medium-Term Outlook Encouraging, Long-Term Prospects Look Promising
Date: 14 November 2014

The perception about India has changed dramatically in recent months.  There was widespread disenchantment with the lackadaisical leadership of the previous government that lacked a coherent economic strategy and vision to reinvigorate growth.   Read more

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.  Read more

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%.   Read more

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.   Read more

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.   Read more

Low oil prices forcing companies to slow spending
Oil & Gas Industry Spending Finally Slowing
Date: 13 November 2014

With oil prices low and showing no sign of an immediate rebound, the industry is beginning to pull back on spending.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

The Thai–Cambodia dispute over the Preah Vihear temple
The Challenge of the Intra-ASEAN Thai-Cambodia Conflict
Date: 11 November 2014

The Thai–Cambodia dispute over the Preah Vihear temple (called Phra Viharn in Thailand) is one of the worst intra-ASEAN conflicts on record.   Read more

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.   Read more

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.   Read more

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.   Read more

Myanmar should take advantage of its ASEAN chairmanship
ASEAN Chairmanship is a Golden Opportunity for Myanmar
Date: 10 November 2014

The 25th ASEAN Leaders’ Summit will be held in Naypyidaw this week back-to-back with related meetings of the East Asia Summit and other groups, bringing world leaders to Myanmar.   Read more

Kuroda surprised the financial markets with more quantitative easing
Under Governor Kuroda, 'Abenomics' is Facing More Scrutiny
Date: 10 November 2014

The Bank of Japan sent a new shock-wave through financial markets last week when Governor Haruhiko Kuroda announced another massive round of monetary expansion (Quantitative Easing or QE).   Read more

Emerging Markets Preview of Economic News
Emerging Market Assets Lacking a Defined Direction
Date: 10 November 2014

Emerging market assets, in general, are lacking a defined direction. The fall in commodity prices seems to be stabilizing, for now at least, but the impact of the large level shift is still to be felt globally.   Read more

Can the Swiss 'Save Our Gold'?
Referendum Passage for Swiss 'Save Our Gold' Initiative Unlikely
Date: 10 November 2014

The euro has slipped to its lowest level against the Swiss franc since late 2012.  It has come within about 20 pips of the floor that the SNB has imposed at CHF1.20.  The referendum at the end of the month is capturing the attention of market participants.   Read more

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.   Read more

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.   Read more

The dollar fundamentals are supportive while the technicals get stretched
Supportive Fundamentals Exist While Dollar Technicals Stretch
Date: 9 November 2014

The underlying driver of the foreign exchange market is the divergence between the US and the other high-income countries.  This was underscored in the past couple of weeks.   Read more

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.   Read more

Modi's Look East Policy - So Far, So Good
Modi's Look East Policy Approach is Finding Traction
Date: 9 November 2014

Active interest by India’s new leadership has provided an adrenaline shot to the flagging discourse on South Asian regionalism.   Read more

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.   Read more

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.   Read more

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.   Read more

APEC is 25 years old
An APEC History Lesson and its Potential Future
Date: 7 November 2014

APEC leaders will meet in Beijing in November, 25 years after the APEC process was launched in Canberra in 1989. Some early hopes have been met, while others have been dashed.   Read more

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.   Read more

The dollar reaction to U.S. jobs data
U.S. Jobs Data and the Dollar Reaction
Date: 7 November 2014

US jobs data was largely in line with expectations, and the key take away is the divergence between the US on one hand and Europe and Japan on the other.   Read more

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.   Read more

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.   Read more

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%.   Read more

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.   Read more

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.   Read more

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.   Read more

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.  Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

The paradox between the 'China Model' and concepts in international society
Will Embracing the 'China Model' Threaten Jinping's Diplomatic and Economic Goals?
Date: 4 November 2014

Xi Jinping has tackled serious domestic and foreign policy challenges since he assumed leadership in November 2012. He has put great effort into an astonishingly large-scale domestic anti-corruption campaign and has invested diplomatically in enhancing China’s image as a major country and leader in the region.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

EUR/GBP/DXY/JPY Average Least Volatile Months 1994-2014
Forex Volatility Levels Have Crept Higher
Date: 3 November 2014

In March of this year, forex volatility was about as lifeless across GBP, DXY, EUR and JPY as it had been for the past five years: pretty much matching a low in October 2012.   Read more

The Asian Infrastructure Investment Bank and Washington's Viewpoint
Washington's Reaction to the Asian Infrastructure Investment Bank
Date: 3 November 2014

If you want to understand the negative reaction of the United States to the Asian Infrastructure Investment Bank (AIIB), you also need to understand how the United States thinks about the World Bank and Asian Development Bank (ADB).   Read more

The next APEC summit has grown in importance for geo-political reasons
The APEC Summit Looms Large for Asian Geo-politics
Date: 3 November 2014

Regional economic cooperation in Asia and across the Pacific was developed around the idea of open regionalism and building the capacity for regional development in the global, multilateral trading system.   Read more

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.   Read more

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.   Read more

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.   Read more

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.  Read more

Is Yellen leading the Fed to be more hawkish?
More Interpretation of the End of the Fed's Quantitative Easing
Date: 31 October 2014

The US Federal Reserve this week has moved one step closer to lifting interest rates by ending its controversial bond-buying program. This begins a long-anticipated process that will take many months to complete: the metamorphosis of a dove into a hawk.   Read more

The rein of the U.S. petrodollar may have a credible threat
Could There be a Credible Threat to the Rein of the U.S. Petrodollar?
Date: 31 October 2014

Recent trade deals and high-level cooperation between Russia and China have set off alarm bells in the West as policymakers and oil and gas executives watch the balance of power in global energy markets shift to the East.   Read more

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.   Read more

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  Read more

Is raising the minimum wage a real solution to a country's economic woes?
Can the Price of a Big Mac in Denmark Explain the Living Wage?
Date: 30 October 2014

Is the notion of paying a higher wage – whether it’s $10 an hour, $15 an hour, or $20 an hour – a potential competitive advantage by a company touting what it does to lift domestic workers out of poverty?   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

World Trade Growth Seems to be Slowing
Slowing World Trade Does Not Have to Mean Less Globalization
Date: 28 October 2014

This Great Graphic is from the Dutch Bureau of Economic Policy Analysis (CPB), and was posted by Steve Goldstein at MarketWatch.  It shows the three-month average year-over-year growth rate of global trade.   Read more

NZ's John Key's continuity in regional affairs is a likely course
New Zealand's John Key Likely to Stay the Course in Regional Affairs
Date: 28 October 2014

New Zealand’s approach to regional affairs is unlikely to change with the recent re-election of Prime Minister John Key. The election, held on 20 September, provided a clear mandate for Key’s National Party.   Read more

The markets get word on the end of QE
The Markets Await the Fed Statement on Quantitative Easing
Date: 28 October 2014

The US dollar is narrowly mixed in quiet turnover.  The historic FOMC meeting that announces the end of QE is finally at hand.  This marks a new phase, post-QE, for monetary policy, and the US economy more broadly.   Read more

Rousseff's Victory Comes with Many Economic Challenges
Brazil's Economic Issues Pose a Great Challenge to Rousseff's New Term
Date: 27 October 2014

Dilma Rousseff has secured her Workers’ Party (PT) its fourth consecutive electoral victory. Winning with just a 3% margin, the fragility of her victory reflects divides in Brazilian society and the economic challenges ahead for the country.   Read more

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.   Read more

China determined to make the next APEC summit a success
The Next APEC Summit Presents Many Challenges for China
Date: 27 October 2014

The APEC summit is just over a week away and all stops are out in Beijing to make it an economic and diplomatic triumph, despite the huge underlying challenges in managing China’s relations with the region.   Read more

Japan's Leader's 'Abenomics' policies may be losing momentum
Japan's Abenomics May Be Losing Steam in its Second Year
Date: 27 October 2014

As the second year of Abenomics progresses, Prime Minister Shinzo Abe’s program of coordinated monetary and fiscal stimulus and structural reform has lost some of its lustre.   Read more

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.   Read more

Will Jinping and Abe Strengthen Ties for Peace and Economic Well-Being?
Economic Growth, as well as Security, Dependent on China-Japan Relations
Date: 26 October 2014

Tensions in the East China Sea over the contested Senkaku/Diaoyu islands dominate manoeuvring around the upcoming meeting between Chinese president Xi Jinping and Japanese Prime Minister Shinzo Abe at the APEC summit.   Read more

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.   Read more

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?   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Can Vietnam be Japan's Plus One?
Japan Tries 'China Plus One' Strategy with Vietnam
Date: 23 October 2014

As Japan seeks to diversify its investments beyond China, an opportunity arises for Vietnam to attract greater international investment.   Read more

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    Read more

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.  Read more

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.  Read more

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.   Read more

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.   Read more

'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.   Read more

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.   Read more

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.   Read more

J.P. Morgan's Loan to Deposit Ratio vs. Excess Deposits
U.S. Banks are Buying Treasuries, Taking Deposits, but not Lending
Date: 21 October 2014

The drop in US bond yields is perhaps the biggest surprise for investors this year.  The gradual decline in Federal Reserve buying, faster growth, and the prospects for a rate hike in 2015 were expected to lift bond yields.   Read more

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.   Read more

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.   Read more

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.   Read more

Modi makes his foreign policy case before the UN General Assembly
India's Modi Makes His Maiden Speech before the UN General Assembly
Date: 20 October 2014

Many have hailed Prime Minister Narendra Modi’s maiden speech to the United Nations General Assembly as a historic shift away from the speeches of past Indian heads of government.   Read more

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.   Read more

Vietnam should take steps to create a sound educational system
The Vietnamese Education System is Vital to the Country's Economic Future
Date: 20 October 2014

For Vietnamese youth, a university degree is the entry ticket to the middle class and a promise (often unfulfilled) of an urban professional job. Enrolment in higher education has grown from 162,000 in 1992 to over two million last year, some 25 per cent of the nation’s college-age population.   Read more

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.   Read more

Xi Jinping Leadership Style as 'man of the people' has its Challenges
China's Xi Jinping's 'man of the people' Leadership of the World's Largest Consumer Market
Date: 20 October 2014

When Xi Jinping ascended to the Chinese presidency, he, Premier Li Keqiang and their streamlined seven-person Politburo Standing Committee faced serious economic challenges at home as well as increasingly complex issues to manage abroad.   Read more

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.   Read more

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.  Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Stormy times for the global financial markets
Global Financial Markets Continue to Navigate Rough Seas
Date: 16 October 2014

The global markets are struggling to regain some semblance of stability. Equities in Asia continued to fall after sizable losses in the US yesterday. Oil prices continue to slide.  Read more

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.   Read more

The UK issues a yuan-denominated bond
What does the UK yuan-denominated bond mean for the dollar?
Date: 15 October 2014

On October 9, the UK announced it was beginning the launch of a yuan-denominated bond, becoming the first sovereign, besides China, to do so.  It is spurring talk that this is the death of the US dollar.   Read more

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.   Read more

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.   Read more

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.   Read more

All four pillars of the ASEAN Economic Community need to make more progress
Is the ASEAN Economic Community Making Enough Progress?
Date: 14 October 2014

Launched as a political bloc and security pact in the aftermath of the Vietnam War, ASEAN has evolved to embrace an ambitious economic agenda. Its latest project is to establish the ASEAN Economic Community (AEC) by 31 December 2015.   Read more

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’).   Read more

More bad economic news from Europe is hitting the eurozone hard
The Bad Economic Hits Keep Coming in Europe
Date: 14 October 2014

The US dollar is trading broadly higher as the divergence thesis gains ground with the latest batch of disappointing euro area data.   Read more

Secretary Lew has been clear about a strong dollar policy
The U.S. Strong Dollar Policy Remains Intact
Date: 13 October 2014

Many participants seem confused. Despite the talk about the dollar by different Fed officials, dollar policy is set by the US Treasury. Secretary Lew has been clear.   Read more

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.   Read more

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.   Read more

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.   Read more

The dollar is again at the forefront of currency trading
Heavy Trading in the Dollar Starts Off the Week in Currencies
Date: 13 October 2014

The US dollar is trading heavier against most of the major and emerging market currencies. The euro and sterling remain within the ranges seen before the weekend while dollar slipped to JPY107 in a Tokyo-less Asian session.   Read more

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.   Read more

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.   Read more

Overcoming the language barrier is key for Japan to attract foreign workers
Attracting Foreign Talent Means Overcoming the Japanese Language Barrier
Date: 11 October 2014

In May 2014, the Japanese government announced its plan to attract ‘foreign talent’ as part of a campaign to further economic growth. The plan consists of three key points.   Read more

India's Trade Agreements are in need of a Review
India Needs to Pursue Meaningful Free Trade Agreements
Date: 10 October 2014

When India began negotiations with ASEAN in 2004 for a free trade agreement (FTA) covering the goods sector, it marked a major step in the evolution of the country’s engagement with the global economy.   Read more

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.   Read more

Oil and the Dollar Dominate the Global Growth Challenges
Competition in the Oil Market and the Dollar Confound the Markets
Date: 10 October 2014

The dollar retains a firm undertone after yesterday's recovery in the North American session from the week's lows.  For the first time in months, the dollar has lost ground against all the major currencies this week.   Read more

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%.   Read more

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.   Read more

Australia's 'China choice' Over Taiwan
Arguments Rage in Australia Over the 'China choice'
Date: 9 October 2014

Arguments currently raging in Australia about the so-called China choice have not addressed the crucial issue about what specific concessions must be made to accommodate a rising China.   Read more

The FOMC Meets and the Tone is Dovish
Dovish FOMC Minutes Signal Some Push Back Against the Hawks
Date: 9 October 2014

The dovish FOMC minutes have pushed the consolidative tone into a dollar correction.  Asia and European markets extended the dollar decline.  These losses brought the greenback near initial retracement objectives or technical targets.   Read more

Singapore is unlikely to re-create Hong Kong's pro-democracy protests
Hong Kong's Pro-Democracy Protests Unlikely to Reappear in Singapore
Date: 8 October 2014

Some internet commenters were quick to draw similarities between the Hong Lim Park protests and the larger protests in Hong Kong. On the surface, there are commonalities.  The supposed similarities have led some to ask will — or when will — Singapore do a ‘Hong Kong’?   Read more

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.   Read more

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.   Read more

German Student's Sway Government to Pull Tuition Fees
Germany scraps tuition fees after mass student protests cause shift in public opinion
Date: 8 October 2014

After experimenting with tuition fees, all the federal German states have been persuaded to reverse their decision. In the UK and US, there is no political will to change the policies which are blighting whole generations.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Emerging Markets Preview of Economic News
A Preview of this Week's Events Among the Emerging Markets
Date: 6 October 2014

EM assets are starting the week on the front foot under the favorable constellation of a weaker dollar, stronger stocks and the unexpected result of the presidential elections in Brazil.   Read more

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.   Read more

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).   Read more

How will this week's events play in the markets
Looking ahead at this week's events and the global investment climate
Date: 6 October 2014

The broad economic conditions have been shaped to a large extent by the different policy responses to the Great Financial Crisis.   Read more

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.   Read more

Shipping Iron Ore Is Rough Sailing for Participants
The Iron Ore Shipping Business is Facing Some Rough Seas
Date: 3 October 2014

The impact of Chinese demand on global iron ore prices is well known. A less acknowledged consequence of China’s emergence is the transformation of incentive structures in the global shipping market.   Read more

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.   Read more

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%.   Read more

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.   Read more

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.   Read more

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.   Read more

Myanmar in Need of Reforms to Maintain Growth
Necessary Reforms are too Important for Myanmar to Pass Up
Date: 1 October 2014

Myanmar has embraced greater economic openness since it emerged from decades of economic and political isolation. Reforms so far and re-engagement with the international community have successfully stimulated growth.   Read more

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?  Read more

President Obama prompted to act by ISIS
ISIS manipulates President Obama into military response
Date: 1 October 2014

Before he took office, President Barack Obama predicted that war in Iraq would recruit more terrorists to the jihadist cause. Now he is US leader, Obama has neglected to heed his own warnings.   Read more

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.   Read more

States and Provinces are Acting Alone on Cap-and-Trade
States and Provinces are Initiating Cap-and-Trade Programs Due to Lack of Government Action
Date: 30 September 2014

Unsatisfied with the pace at which the federal government is acting to reduce greenhouse gas emissions, several U.S. states and a few Canadian provinces are forging ahead with their own initiatives.   Read more

Weak economic data from the Eurozone and Asia pump up the dollar
Dollar Strength Persists in the Wake of Weak Eurozone and Japanese Data
Date: 30 September 2014

Today's preliminary September CPI figures were seized upon to drive the euro to fresh lows, against both the dollar and sterling.  We anticipate the weakness of the yen will boost inflation, and in turn, this will take off some pressure off the BOJ to do more.  Read more

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.  Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

Markets Digest Economic News from Around the World
Markets Digest PMI Readings from China and the Eurozone
Date: 23 September 2014

There are two main pieces of economic news today. The first is HSBC's flash manufacturing PMI for China. The second piece of economic news today is the flash eurozone PMI readings.  Read more

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.   Read more

A bank account for every Indian citizen
Modi's financial inclusion means a bank account for every Indian citizen
Date: 19 September 2014

On Independence Day 2014, India’s Prime Minister Narendra Modi launched his financial inclusion plan to provide a bank account to every Indian household.   Read more

Fed Chair Yellen and ECB leader Draghi
Some Additional Insight on the Federal Reserve and ECB
Date: 19 September 2014

The launch of the new 4-year lending facility by the European Central Bank was disappointing.  Participation was light. Even with the disappointing TLTRO, the divergence between the trajectory of Fed and ECB policy is clear.   Read more

Fed Chair Yellen and the FOMC Stay the Course
The FOMC Decision, Scottish Independence, ECB and Other News
Date: 18 September 2014

The  Scotland vote today is the main event, and as important as a "yes" vote would be, it is not the only event today.  Today, the markets will continue to digest yesterday's FOMC meeting.     Read more

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."  Read more

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.   Read more

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.   Read more

The FOMC meeting and Scotland's referendum top this week's events
FOMC meeting, Scotland's referendum headline this week's events
Date: 16 September 2014

The week's key events kick-off today as the FOMC starts its two-day meeting.   Thursday features Scotland's referendum, the ECB's TLTRO and the SNB's meeting.   Read more

Indian food price inflation incredibly high
Will trade help defeat India's terribly high food price inflation?
Date: 16 September 2014

Retail food inflation continues to persist at near double digits — 9.36 per cent in July. In the case of food inflation, it is the same old story with the prices of proteins (eggs, fish, and meat), milk, fruits and vegetables leading the inflationary charge.  Read more

China and India strengthen their strategic relationship
The strategic relationship between China and India is carrying more weight
Date: 15 September 2014

The visit of Chinese President Xi Jinping to India this week, so early in the term of India’s new Prime Minister, Narendra Modi, underlines the growing strategic weight of the relationship between the two countries.   Read more

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.  Read more

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.  Read more

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.  Read more

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.   Read more

Scottish voters near referendum day on independence
Scottish independence hangs on to a narrow lead heading to referendum day
Date: 8 September 2014

The Yes vote has taken a narrow lead, but the vote is too close to call ahead of September 18’s vote on Scottish independence. Increasingly, however, many Scots are saying ‘what have we got to lose by separating from a London-centric United Kingdom?’   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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.   Read more

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   Read more

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.    Read more

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.  Read more

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.   Read more

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.  Read more

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.    Read more

Capital markets are subdued at the end of the week.
Capital Markets Subdued, European Markets Thinned by Assumption Day
Date: 15 August 2014

The capital markets are subdued. European markets have been thinned by the Assumption Day holiday.  The US dollar is a bit softer against most of the major currencies, except the Japanese yen.  Equity and bond markets are mostly firmer as well.  

Stagnant economic growth in eurozone.
Growth Flatlines in Euro Zone Following Unexpected Contraction in German Economy
Date: 14 August 2014

The euro zone economy stagnated in Q2, as the rest of the region offset the unexpected 0.2% contraction in the German economy.  The implied yield of the German bund future dipped below 1.0%, though the yield in the cash market held in slightly better.  The euro itself, did not make a new lows.   Read more

Belarus farmers expected to profit as a result of Putin's sanctions.
Putin's Sanctions Will Result in Farmer Profits in Belarus - Here's Why
Date: 13 August 2014

Increasingly the saga of East-West economic relations is developing independently of the actual conflict in Ukraine and the surrounding region, leading to various unexpected outcomes.  Read more

BOE quarterly inflation report pushes down the sterling.
Sterling Pushed Down Following Bank of England's Quarterly Inflation Report
Date: 13 August 2014

 Today will likely prove to be the most eventful of the week.   It has already featured Q2 Japanese GDP, a slew of Chinese data, euro zone industrial output and UK employment and the BOE's quarterly inflation report.  Still to come are US retail sales and Fed talk.    Read more

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.  Read more

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.  Read more

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.  Read more

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.   Read more

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.    Read more

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.  Read more

Indian worker carries sacks of grain at wholesale market.
India Refuses to Sign Global Agreement on Trade Facilitation
Date: 5 August 2014

India has played the spoiler by refusing to sign the global agreement on trade facilitation agreed at the Bali Ministerial of the World Trade Organisation in December 2013.  Read more

Beginning of the week marks a fork in the road for markets.
Markets Seek Direction at Start of the Week
Date: 4 August 2014

 Most of the capital markets action here at the start of the week fall into one of two buckets.  The first bucket is consolidation. The second bucket is evident in the bond market.    Read more

People seeking employment.
Disappointing US Employment Data Evokes Muted Reactions in Market
Date: 1 August 2014

The US employment data was disappointing. The short-term market had been leaning the wrong way. The recent data had fanned hopes that the labor market was accelerating, but today’s data suggest the pace of improvement has not changed.  Read more

Xi Jinping at BRICS Summit.
BRICS Lay Foundation, but Concrete Action is Questionable
Date: 31 July 2014

Unsurprisingly, the BRICS countries sixth annual summit in Brazil once again polarised public opinion. When the proposal for a BRICS development bank and currency swap arrangement was put forward in March 2012, the reaction was already divided.   Read more

GDP figures mark gains in stocks.
Strong GDP Figures Extend Gains to Dollar and Stocks
Date: 30 July 2014

The US dollar is extending its gains in response to the strong US GDP figures. There are four elements of the report to note.   Read more

Zhu Rongji speaking in China.
Pressure in China to Allow Emerging Economies Greater Presence in Financial System
Date: 29 July 2014

The experience that Chinese leaders gain in domestic politics has a big impact on how they view and handle international issues.  Read more

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.   Read more

Hong Kong night lights
Huge Obstacles in $400 Billion Russia China Gas Deal
Date: 25 July 2014

 With its economy flat lining and being held up by oil and gas exports, Russia desperately needs to increase the scale of those exports.   Read more

action limited despite important developments
Important Developments Come to Light but Price Action Mostly Limited
Date: 24 July 2014

There have been five important developments today, but price action has been mostly limited.  Confirmation that the Reserve Bank of New Zealand is pausing after hiking rates for the fourth consecutive time has sent the New Zealand dollar sharply lower.  Read more

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.  Read more

Capital city Jakarta in Indonesia.
Indonesia Faces Difficult Decisions Regarding Debt
Date: 22 July 2014

Indonesia’s next president will need significant funds to fulfil election promises. But both candidates Joko Widodo (Jokowi) and Prabowo Subianto have expressed caution about international borrowings.  Read more

Forex Markets bid nervous calm at start of the week.
Nervous Calm Amid Forex Markets to Start the Week
Date: 21 July 2014

 The US dollar is little changed to start the week. The apparent calm masks heightened geopolitical tensions in Ukraine and Gaza.

   Read more

Markets weary of dollar's power.
Dollar Limps into Weekend as Markets Wary of Geopolitics
Date: 18 July 2014

Geopolitical events are overshadowing a light economic calendar ahead of the weekend.   The shooting down of the Malaysian plane over Ukraine and the Israel's launch of a ground assault in Gaza dominate the focus.   Read more

Financial assistance to help expand South Asia trade.
Chinese Financial Assistance to Boost Intra-regional Trade in South Asia
Date: 17 July 2014

Since the mid-2000s, the South Asian region has witnessed an incoming wave of Chinese financial assistance. In some South Asian countries like Sri Lanka, China has overtaken traditional donors by highly engaging in post-war infrastructure development activities.  Read more

Currency gaines attributed to Yellen comments.
Dollar Firms on Hump Day, but does it have Staying Power ?
Date: 16 July 2014

 Recent comments by Yellen give rise to concern as to whether misinterpretation may be responsible for attribution to dollar gains and economic growth. What’s really going on here?

  Read more

The Economic Impact Of The World Cup
The Economic Impact Of The World Cup
Date: 16 June 2014

What’s the World Cup worth? For some, it is a cash cow and a commercial bonanza; to others, a waste of money. Is hosting the tournament worth it?  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

Why Chinese Living Standards Matter More Than Being The World’s Largest Economy
Why Chinese Living Standards Matter More Than Being The World’s Largest Economy
Date: 14 May 2014

The Chinese economy is on track to replace the U.S. as the world’s largest economy – measured by purchasing power parity (PPP) – by the end of this year, according to a recent World Bank report. But while emerging economies are catching up with advanced economies, but differences of living standards remain far apart.  Read more

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.  Read more

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.  Read more

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?  Read more

Will Japanese Politics Undermine The Reform Agenda?
Will Japanese Politics Undermine The Reform Agenda?
Date: 30 April 2014

Abe's reform plan, now in its critical phase, will be derailed if tensions persist, both at home and abroad.  Read more

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.  Read more

New, More Transparent, Contracts To End Africa’s ‘Resource Curse’?
New, More Transparent, Contracts To End Africa’s ‘Resource Curse’?
Date: 28 April 2014

Contrary to logic, resource-rich countries in Africa have tend to experience less economic growth in the long run than those deprived of natural riches. To reverse this trend, NGOs have been campaigning for greater transparency and accountability in the management of revenues from oil, gas and mining.  Read more

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?  Read more

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.  Read more

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.  Read more

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?  Read more

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.  Read more

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.  Read more

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.  Read more

Game Of Thrones Economics: Why Hasn’t Westeros Had An Industrial Revolution?
Game Of Thrones Economics: Why Hasn’t Westeros Had An Industrial Revolution?
Date: 15 April 2014

The world of the popular HBO series Game of Thrones bear striking similarities to that of Western Europe during the 18th century. But whereas the Industrial Revolution saw a rapid advancement in Europe’s society and economy, Westeros has remained the same for some 6,000 years.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

Why Ukraine’s Gas Industry May Be The Most Profitable In The World
Why Ukraine’s Gas Industry May Be The Most Profitable In The World
Date: 3 April 2014

Whether it likes it or not, kicking and screaming, Ukraine will have to transform its energy sector, if it hopes to see promised IMF money. Privatizing these assets could raise $50 billion, but the benefits for investors may be even higher.  Read more

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.  Read more

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?  Read more

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.  Read more

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?  Read more

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.  Read more

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.  Read more

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?  Read more

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.  Read more

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?  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

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.  Read more

Can Asia’s Emerging Economies Protect Their Water Resources?
Can Asia’s Emerging Economies Protect Their Water Resources?
Date: 5 March 2014

Asia’s economic growth has been one of the success stories of the 21st century. But the economic rise of countries such as China, India, Vietnam and Indonesia has created serious pressure on their environmental resources, particularly their water supplies.  Read more

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.  Read more

China’s Leadership Change: One Year Later, Are Reforms Succeeding?
China’s Leadership Change: One Year Later, Are Reforms Succeeding?
Date: 3 March 2014

March 14 will mark one year since Xi Jinping and Li Keqiang took the reins of China’s leadership and the economy. Xi and his team have officially given themselves until 2020 to achieve "decisive" results with reforms. How has progress been so far?  Read more

North America: Boundless Natural Gas, Endless Opportunities – Interview With EIA
North America: Boundless Natural Gas, Endless Opportunities – Interview With EIA Chief Adam Sieminski
Date: 28 February 2014

The Energy Information Agency (EIA) has predicted that natural gas production in the US will continue to grow at an impressive pace. Right now output is close to 70 billion cubic feet a day and is expected to reach over 100 billion cubic feet per day by 2040. The trend is likely to continue without hitting a geologic “peak”, and along with this trend will come new marketing opportunities for America.  Read more

Is GDP Still The Best Indicator Of Economic Progress?
Is GDP Still The Best Indicator Of Economic Progress?
Date: 27 February 2014

Criticism of Gross Domestic Product (GDP) as an indicator of the health of the economy has grown in recent years, in part because of a new focus on measures of subjective well-being or ‘happiness’. This column argues that the debate needs to distinguish between the different purposes of measurement: economic activity, social welfare, and sustainability are distinct concepts and cannot be captured by a single indicator. There are good arguments for paying less attention to GDP and more to indicators of welfare and sustainability, but it would be a mistake to adjust or replace GDP.  Read more

Why Food, Water & Fuel Are The Best Investments For The Future
Why Food, Water & Fuel Are The Best Investments For The Future
Date: 26 February 2014

Food, energy and water are, today, where gold was in the summer of 2001. No matter what happens to the stock market, food, energy and water are going to be a lot more valuable in the future.  Read more

Ukraine’s Real Problems Have Yet To Be Addressed
Ukraine’s Real Problems Have Yet To Be Addressed
Date: 25 February 2014

There should be no mistake – the Yanukovich government in Ukraine was rotten to the core, and he will not be missed. But revolutions are much easier to make than to recover from. Ukraine’s political and economic woes may be so problematic that another Yanukovich may emerge or the government may have little choice but to turn back to Russia.  Read more

How Microfinance Failed In The Developing World
Has Microfinance Failed The Developing World?
Date: 24 February 2014

Microfinance was supposed to help cure endemic poverty. Yet recent studies have found microfinance to have had zero impact on poverty alleviation. While it still has a big presence in the developing world, and undoubtedly helps some entrepreneurs find their feet, the hopes and aspirations that it once aroused are no more.  Read more

Matteo Renzi: Italy’s New Hope?
Matteo Renzi: Italy’s New Hope?
Date: 19 February 2014

Florence Mayor Matteo Renzi is the latest Italian politician given the chance to form a government. But while many of Renzi's supporters emphasise his youth as a promise for change, Renzi will still have to draw support from the Old Guard and industrialists to remain in power.  Read more

Asian Infrastructure Investment Bank: The Next Step For Asian Development?
Asian Infrastructure Investment Bank: The Next Step For Asian Development?
Date: 18 February 2014

In October, Chinese president Xi Jinping proposed the creation of an Asian Infrastructure Investment Bank that would offer financial support for infrastructure construction in developing countries in the region. In time, its impact on the region could be greater than the Asian Development Bank or the World Bank, but it needs to expand as rapidly as it can to acquire the necessary expertise.  Read more

Why Is China’s Economy Still Showing Signs Of Overheating Despite Slower Growth?
Why Is China’s Economy Still Showing Signs Of Overheating Despite Slower Growth?
Date: 17 February 2014

The People’s Republic of China’s (PRC) economy has shown signs of overheating despite a sharp slowdown in economic growth, suggesting that, constrained by the supply of labor, its potential growth rate might have fallen significantly from its past level.  Read more

Are We Entering A Golden Age Of Gas? – Interview With IEA Head Maria van der Hoe
Are We Entering A Golden Age Of Gas? – Interview With IEA Head Maria van der Hoeven
Date: 13 February 2014

The potential for a golden age of gas comes along with a big “if” regarding environmental and social impact. The International Energy Agency (IEA) – the “global energy authority” – believes that this age of gas can be golden, and that unconventional gas can be produced in an environmentally acceptable way.  Read more

China-EU Investment Pact: Tough Talks, Right Track
China-EU Investment Pact: Tough Talks, Right Track
Date: 12 February 2014

The China-EU investment talks have begun. Due to different levels of economic development, each side has different strategic goals. Nonetheless, the bilateral talks are on the right track.   Read more

Why It Is Almost Impossible To Stop Currency Rigging
Why It Is Almost Impossible To Stop Currency Rigging
Date: 11 February 2014

Authorities in New York have announced they are launching an investigation into the manipulation of the world’s biggest financial market – the US$5.3 trillion a day traded in currencies. But suspending traders or cracking down on technology is likely to do very little. The real root of the problem is the design of the market.  Read more

Why Protests And Civil Unrest Are Growing Around The World
Why Protests And Civil Unrest Are Growing Around The World
Date: 10 February 2014

The future of world politics will be about which societies can develop responsive institutions to govern vast geographical space and which cannot. Will the growing trend of protests and civil unrest around the world – as demonstrated in the Middle East, Thailand and Ukraine recently – soon spread to countries like Russia and China?  Read more

Can Bitcoin Become The New Global Reserve Currency?
Can Bitcoin Become The New Global Reserve Currency?
Date: 7 February 2014

The lack of trust in the custodians of fiat money has provided a fertile context for the rise of Bitcoin, the ultimate digital alternative store of value as against mainstream, central bank managed currencies like the US dollar, sterling and the euro.  Read more

Do The WTO & The Doha Round Still Have A Future?
Do The WTO & The Doha Round Still Have A Future?
Date: 6 February 2014

After several days of grueling negotiations the Ninth WTO Ministerial Conference in Bali, Indonesia, in December 2013, adopted the Bali Package aimed at mainly streamlining global trade. However, this is only the first step toward a Doha deal and much work remains to re-formulate a post-Bali agenda, as well as reform of the WTO to restore its relevance as a key pillar of multilateral trade relations.  Read more

India And The TPP: Wait Or Join?
India And The TPP: Wait Or Join?
Date: 5 February 2014

Can India integrate more fully into the global economy and energize its trade by joining the Trans-Pacific Partnership? Or will negotiating an entry require significant concessions, not necessarily in India’s interests? These outcomes will depend on how TPP framework itself develops – inclusively or exclusively.  Read more

Can The MINTs Outgrow The BRICS?
Can The MINTs Outgrow The BRICS?
Date: 4 February 2014

Over the past decade the BRICS countries (Brazil, Russia, India, China and South Africa) have dominated emerging market investments, but their growth is slowing. Investors have now turned their eyes to another group, the MINTs (Mexico, Indonesia, Nigeria and Turkey). The opportunities presented by the MINTs are clear, but so are the challenges.  Read more

The World Economy In 2014: Is The Recovery Really Strengthening?
The World Economy In 2014: Is The Recovery Really Strengthening?
Date: 28 January 2014

The global economy seems to be on the mend. In this column, IMF Chief Economist Olivier Blanchard provides a quick overview of the likely developments. The key points are that the recovery is happening as expected, but it remains fragile and uneven across major economies. Normalising monetary policy poses risks for vulnerable emerging markets and deflation is a real concern for the Eurozone.  Read more

Why India’s Growth Prospects Are Looking Up
Why India’s Growth Prospects Are Looking Up
Date: 28 January 2014

After a weak 2013, India’s economy has bottomed out, and its much higher long-term growth potential should assert itself after the elections. The international climate is less threatening and conditions are ripe for a cyclical upturn.  Read more

The ‘Asianisation’ Of Global Innovation
The ‘Asianisation’ Of Global Innovation
Date: 27 January 2014

Since the 1950s, the United States and the West have set the standards for prosperity, productivity and innovation. But the share of Asia in global R&D is climbing; and based on recent statistics,the region could soon displace the West as the global R&D driver.  Read more