As America is struggling amid a historical protest election, the political risk could undermine US economic rebound and the lingering global economic recovery. Europe will be least immune to spillovers, says Dan Steinbock.
The World Bank and the International Monetary Fund are conducting their spring meeting this week in Washington. Announcements of major new initiatives are always expected after these meetings, but one has many people around the world very excited. This week, the World Bank announced its plan to invest $2.5 billion in girls’ and young women’s education.
Free trade has become the Republican elephant in the room, thanks to Donald Trump. The GOP front-runner has helped make trade one of the hot-button issues of the 2016 presidential race. Moreover, it is tearing the Republican Party apart – just like it did in the wake of the U.S. Civil War.
In March, the leading credit agencies cut their outlook for China’s sovereign credit rating from stable to negative. If the decision was warranted, it may also be time to reassess the current ratings of most advanced economies and accelerate global ratings reforms.
Standard & Poor’s (S&P) downgrade followed a similar measure earlier in March by Moody’s, another major ratings agency. S&P did maintain the rating AA-, adding that China’s reform agenda is on track, though likely to proceed more slowly than expected.
After initially extending its recent recovery gains against the major currencies, the US dollar began consolidating in the European morning. An unexpected shift by the Monetary Authority of Singapore, replacing a modest and gradual currency appreciation with a more neutral stance, coupled with softer oil prices and weaker European equities, appears to have weighed on emerging market currencies.
Over 20 years ago, the ASEAN Regional Forum (ARF) was founded to address highly sensitive and contentious political and security issues in Asia. Its objective was to develop confidence-building measures and, in time, preventive diplomacy with an ultimate goal of resolving conflicts in the region.
The US dollar bid well in Europe and is poised to start the North American session with the wind to its back. Despite firmer equity and industrial metal prices, most emerging market currencies are also succumbing to the rebounding greenback.
President Barack Obama was reportedly pleased with a closed-door meeting with the head of the Federal Reserve, but investment banks warn that junk bonds are in a bubble as corporate profitability collapses.
The Organization for Economic Cooperation and Development (OECD) announced last week that it will assemble tax officials from its various member nations to discuss ways that governments can learn and improve policies in the wake of the Panama Papers scandal.
The OECD nations will attempt to find ways to share information and analyze the data flowing from the Panama Papers investigation to tighten up their own tax laws and to prevent the type of sheltering that is alleged to have occurred in Panama.
The Panama Papers have exposed the largest financial crime scandal of our lifetimes. However, what has been uncovered by the Panama Papers is much more dangerous than simply greed and corruption.
For those of you who have been hiding under a rock, the Panama Papers are over 11 million documents leaked from Mossack Fonseca, one of the largest law firms in the world specializing in offshore accounts and incorporation of shell companies.
