Obama, the TPP, and Help from – Republicans?
Are the stars aligning for both passage of a trade promotion authority bill by Congress and approval of the Trans-Pacific Partnership agreement?
Category: Economics
OPEC’s Meeting Results and Eurozone Inflation Numbers
Two developments are important for investors to know about before the markets open on Friday to close the month.
First, and most importantly, the results of the OPEC meeting are the most negative outcome for prices. OPEC, which over-produced in October, decided to rollover the existing quota 30 mln barrels a day. We had noted that the timing of its next meeting would be an important tell. It did not decide to schedule a meeting in the February-March period, when the seasonal demand slackened. Instead, the next OPEC meeting is for June.
Personal Incomes, Jobless Claims Disappoint
Personal incomes rose less than expected and jobless claims surprised analysts with a surge on Wednesday, as growing optimism met with sobering data.
Weekly unemployment claims rose to 313,000 on a seasonally adjusted basis, up over 7% from the prior week. The 4-week moving average for claims rose 2% to 294,000. The rise in claims was far above economists’ expectations of a fall in total claims to 286,000.
U.S. Holiday Means Economic News Today, Then Focus Shifts Overseas
The capital markets are mostly quiet, amid a light news stream, and ahead of three key events in the coming days, with U.S. markets closed tomorrow and light participation expected on Friday. These events are tomorrow’s OPEC meeting, the flash euro area inflation reading on Friday, and month-end portfolio and hedge adjustments.
China Aims High
This geopolitical summit season has consolidated ongoing trends in international affairs. A still-rising China with global leadership aspirations, a resurgent Russia bent on restoring its superpower status, and sclerosis and dysfunction in Western countries is likely to dominate international politics for at least the next 20 years. In fact, we might only be at the beginning in this long time span where seismic global power shifts are taking place.
Japan’s Election – Policy or Politics?
Prime Minister Abe is subjecting his ruling coalition — and his nation — to an unnecessary election on 14 December 2014. Abe claims his decision is all about policy, but in reality it is all about politics. His stated rationale for calling the election is the need to secure voters’ endorsement of his administration’s decision to postpone the consumption tax rise to 10 per cent until April 2017. But his real reasons are based on cold calculations of political self-interest.
Holiday-Shortened Week in U.S. not Short on News
The US dollar has begun the holiday-shortened week on a firm note, but the stronger than expected German IFO report helped steady the euro near $1.2400. Although the Japanese markets closed earlier today, the dollar rebounded toward JPY118.40, as participants recognize official jawboning was more about the pace of the yen’s decline than the level.
The German flash PMI was disappointing, but the ZEW survey was considerably better. The German IFO followed the ZEW lead, not the PMI. The IFO improved for the first time since April.
Central Banks Start Printing Presses Worldwide
As disinflation and deflation threatens growth rates in emerging markets and the European Union, central banks have hinted that their monetary policy will become more accommodative in the coming months.
From China to the European Central Bank, policymakers are cutting growth rates and mulling lowering interest rates and expanding monetary bases in an attempt to get credit to flow more freely around the world.
One Cannot Separate Politics and Economics
Many people assume that politics and economics are separate spheres. We find ourselves often harkening back to the even older tradition of referring to “political economy”. Harold Laswell, regarded as the father of modern political science, famously defined politics as who gets what, when and how. Is not that the role of the price mechanism and the market economy?
Global Summits, Global Hopes
For global governance watchers, this was the big week of the year. Between 7 November and 16 November, the world witnessed an APEC meeting in Yanqi Lake near Beijing complete with a bilateral China–Japan ‘breakthrough’ and a major US–China climate deal; an historic ASEAN and East Asia Summit held in Naypidaw, Myanmar; and a colourful G20 meeting in Brisbane, Australia.
Notwithstanding the chorus of those announcing growing disorder, global order seems better off after these summits.
