Weak consumer confidence and a disappointing lack of significant growth in durable goods sales are pointing to a weakening American economy. Durable goods sales rose just 0.8% in March after a 3.1% decline in February; despite expectations of a growth rate twice that. Core durable goods growth actually fell 0.2% after falling in February, although analysts had expected moderate growth.
One of India’s most promising economic features is its large working-age population. Yet if India doesn’t find jobs for its young people, this boon will quickly turn into a powder keg, as evinced by the recent agitations of unemployed Jats in Haryana. The most important impediment to job growth in India is the country’s outmoded labour regulations.
Economic analysts are beginning to call the real estate market a “panic” as home sales continue to fall but prices keep rising. New home sales fell by an annualized 511,000 units in March, the third straight month of declines. New home sales have not fallen for three weeks in a row since 2011.
EM ended last week on a soft note. Perhaps the main driver was rising US yields, as markets become wary of a more hawkish Fed this Wednesday. Perhaps it was technical, as the EM rally became over-extended. Whatever the reasoning, the correction continued into the weekend and is likely to carry over to this week as well.
While we remain cautious on EM at such rich valuations, a significant correction (which we have not seen in quite some time) could make some assets more attractive. The global liquidity backdrop remains supportive of EM for now.
Every corner of Europe is seeing renewed economic struggles that are fomenting political strife and revolutionary reforms.
In the United Kingdom, a Conservative government that once promised a referendum on EU citizenship is scrambling to convince its own populace to vote to remain in the UK. Foreign leaders, such as U.S. President Barack Obama, and economists, such as MIT’s Nobel-Prize-winner Paul Krugman, are urging Britain to vote to remain in the union, despite its flaws and weak economic growth.
The government has plastered images of Crown Prince Maha Vajiralongkorn throughout the public sphere, as the prince stands ready to succeed the throne when his father passes, according Channel NewsAsia.
King Bhumibol Adulyadej is a revered figure, but some leaders fear his death could cause further uncertainty as Thailand undergoes political and economic instability. The king has ruled since 1946 and remains in a hospital recovering from hydrocephalus, among other illnesses.
On 7 May residents of Sarawak, the larger of the two Malaysian states located on Borneo Island, will be going to the polls. Sarawak is the only one of Malaysia’s 13 states to hold its state and federal polls separately. This is the first election in Malaysia since the emergence of the 1Malaysia Development Berhad (1MDB) crisis engulfing Prime Minister Najib Razak.
On 29 February, Indian Finance Minister Arun Jaitley presented the National Democratic Alliance government’s third Union Budget. The government, having assumed office a little less than two years ago, is no longer new to the job.
It was expected to deliver on its promises of pro-growth, pro-business reform, issues that are of considerable importance to its urban, middle-class core constituency. The financial media in India, which draws its viewership from the same constituency, had warned that this would be a ‘make-or-break budget’ for the government.
China’s central bank may be leaning less dovish, Turkey has a new central bank governor, Argentina issued external debt for the first time since it defaulted 15 years ago, Brazil’s lower house voted to impeach President Rousseff by a 367-137 vote
In the EM equity space, Russia (+2.7%), Indonesia (+1.9%), and UAE (+1.8%) have outperformed this week, while China (-3.0%), Taiwan (-1.9%), and Hungary (-1.2%) have underperformed. To put this in better context, MSCI EM fell -0.1% this week while MSCI DM rose 1.0%.
Republic of Congo (ROC) President Denis Sassou Nguesso won re-election in 2016, but activists and political opponents have contested his legitimacy through the court system, and the government actively targets opposition members through violence and arrest, according to The Washington Post.
