Featured Articles

Energy ties between China and Russia are here to stay.

Brothers in Energy

Date: 30 September 2016

China used to call Russia its ‘older brother’. However, never again since the fall of the USSR. In an effort to portray its status as a less powerful yet assuredly more senior neighbour, Russian officials have recently begun referring to their country as China’s ‘elder sister’. The new term has proven less popular in China.

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Data suggests a strong September jobs report.

Remember September (for Jobs Data)

Date: 30 September 2016

Let's admit that the monthly non-farm payroll report is among the most difficult for economists to forecast.  There are not many reliable inputs as it is the first piece of real sector data for a new month. Nevertheless, it is an important piece of economic data, and which, as we saw earlier in the year, a significant downside miss could freeze the Fed.

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Could LNG be the new fuel to power the world?

Move Over Oil, It's LNG

Date: 29 September 2016

During this year’s G7 summit, Japan announced its vision of creating a LNG market to meet increasing energy demand. Natural resource markets are a foundation for trade and economic development. What is less well known is the close link between the natural resource markets and the currency markets.

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Japan's democracy needs to accommodate women and children.

Does Japan's Democracy Have Room for Women and Children?

Date: 29 September 2016

A wave of political activism has animated East Asian politics: Taiwan’s Sunflower Student Movement in 2014, South Korean 2015 street protests against President Park’s new labour law, and protests in Japan in 2015 against Prime Minister Abe’s security bills. Youth activism was common to all these movements.

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Health Care premium growth has slowed, but it is still way above inflation.

Employer Insurance Premium Growth - Still a Problem

Date: 29 September 2016

Upward pressure on US consumer prices is stemming from two elements.  Rents and medical services.   Due to the differences in the composition of the basket of goods and services that are used, the core personal consumption deflator, which the Fed targets, typically lags behind core CPI.

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Ready or not, the renminbi is going international.

Are You Ready for Renminbi?

Date: 28 September 2016

On October 1, the Chinese renminbi officially joins becomes the fifth international reserve currency. Until recently, Washington played geopolitics to defer the renminbi’s internationalization. However, what about Wall Street? 

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The Algiers talks present the next opportunity for oil prices to recover.

Could the Outcome of the Algiers Talks Move Oil Prices?

Date: 28 September 2016

Saudi Arabia and Iran may yet come to terms on some sort of production arrangement, but the outcome of the negotiations in Algeria this week may not do much to rescue oil prices. Following the media spectacle, the oil markets may have to shift their attention back to the supply and demand fundamentals, which are not reassuring.

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Italy's constitutional referendum hits in December.

It's an Italian Thing

Date: 28 September 2016

Italian Prime Minister has set the date for the constitutional referendum as late as practically possibly.  It will be held on December 4.  The issue is the perfect bicameralism that gives as much power to the Senate as the Chamber of Deputies.

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Pessimism reigns over Japanese businesses and the China connection.

Japanese Businesses Express Concern about the Chinese Relationship Direction

Date: 27 September 2016

The Japanese business community is increasingly pessimistic about the Japan–China relationship. For the past three years the US-based Center for Strategic and International Studies (CSIS) and the Japan-based Nihon Keizai Shimbun (Nikkei) have surveyed Japanese business people about their attitudes to the bilateral relationship with China.

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Succession in Singapore is at a new level of uncertainty.

Singapore Maintains the Appearance of Democracy

Date: 27 September 2016

When Lee Hsien Loong collapsed during the National Day Rally speech on 21 August 2016, it shocked not only many Singaporeans, but also leaders from around the world. Although he recovered quickly and was able to finish his speech after a short break, the incident drew attention to the issue of leadership succession in a country that has long experienced predictable politics with little change.

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It is now very unlikely that the TPP will pass in a lame duck session.

TPP Passage Less Likely

Date: 27 September 2016

When President Barack Obama said, ‘The TPP means that America will write the rules of the road in the 21st century’, he was not speaking metaphorically. Large passages in the final text were lifted verbatim, sometimes en masse, from past US free trade agreements (FTAs).

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Though there was little dollar movement, the peso rose after the debate.

The Peso, but Probably not Voters, Moved by the Debate

Date: 27 September 2016

The first US Presidential debate may not sway many voters but has lifted the Mexican peso.  The peso, which has fallen by about 1.3% over the past two sessions, has stormed by 1.5% today as the seemingly biggest winner of the debate. Snap polls immediately following the debate gave the edge to Clinton.

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Solar energy projects will be expensive and financing needs will be large.

If Solar is the Way Forward, Projects will need Financing

Date: 26 September 2016

World energy demand is forecasted to grow by nearly one-third between 2015 and 2040. A large share of this increase will be from the power sector, and the global demand for electricity is likely to increase by more than70%, leading to a 16% increase in energy-related carbon dioxide (CO2) emissions by 2040. Despite the diplomatic success of the Conference of the Parties (COP) 21, it is clear that the current pledges by various countries in the form of Nationally Determined Contributions fall way short of the “well below 2-degrees Celsius” goal agreed to by world leaders in Paris.

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The dollar is in a range, moved about by country-specific risk.

Idiosyncratic Risk and Dollar Movement

Date: 26 September 2016

The US dollar is narrowly mixed.  The euro, yen and Swiss franc are higher, while the dollar-bloc and sterling are softer.  The moving element here is not so much the greenback, which serving more as a fulcrum, but idiosyncratic, country-level developments.

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A Preview of the Emerging Markets

What's Up in Emerging Markets

Date: 26 September 2016

EM initially benefitted from the FOMC decision, but softened into the weekend.  One culprit was lower oil prices, as reports suggest an output deal is unlikely at the OPEC meeting this week in Algeria.  However, it wasn’t just EM, as the greenback closed firmer against the majors as well.  We still believe that risk and EM should do fine over the next few weeks, as the Fed set a two-month window of steady rates.

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Political developments are pushing aside market news.

Global Political Developments Take Center Stage

Date: 26 September 2016

The major central banks have placed down their markers and have moved to stage left.  There are the late-month high frequency data, which pose some headline risks in the week ahead.  The focus for most investors will be on several political developments.

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