Markets Archives - Page 387 of 729

Here is Your Brexit Primer

What is the issue? The UK has long had a strained relationship with the EU and has never been comfortable with the ever-increasing drive for greater integration and harmonization of rules and regulations coming from Brussels. As the EU has grown, more decisions are made by a qualified majority. Previously decision required unanimity. The shift weakens the power of a UK veto. The UK Prime Minister has called for a national referendum on continued UK membership of the EU.

Heavy Data Release, Central Bank Meeting Week in Store for Emerging Markets

EM ended last week on a soft note, due to a variety of both external and internal factors. Firm US data continue to support our call for resumed Fed tightening, and this gave the dollar a bit of a bid. With the dollar gaining against the majors, this spilled over into generalized dollar gains vs. EM as well. Weak data out of China this week poses a risk to EM, though we suspect that how China markets react will set the tone for the wider EM.

GDP Revision Bolsters Economic Confidence

A sudden and surprising revision to U.S. GDP growth is bringing newfound confidence that the American economy is getting better.

After a number of weakening economic indicators, including rising jobless claims, lower home purchases, and contracting manufacturing activity, the Bureau of Economic Analysis (BEA) revised its estimate for fourth quarter GDP growth in the U.S. to 1% growth, after rising 2% in the third quarter.

Emerging Market Political Leaders are Making Headlines

1) PBOC appears to have confirmed a somewhat easier monetary stance, 2) Malaysian Prime Minister Najib is consolidating his grip on power, 3) Hungarian central bank Vice Governor Nagy hinted at more rate cuts, 4) Press reports suggest South African Finance Minister Gordhan threatened to resign last week, 5) Brazil was downgraded to sub-investment grade by Moody’s, 6) Colombia’s central bank tweaked its FX intervention mechanism

Canadian Lenders Feel Sting of Low Oil Prices and Slow-Growth Economy

Canada’s major banks, such as Toronto Dominion Bank and Royal Bank of Canada, failed to meet profit targets as the economy struggles, according to Reuters. Banks have been especially hit hard from energy loans, but banking leaders are more concerned about the overall slowdown of the economy. While the situation concerns many banks, analysts do not foresee an apocalyptic scenario.

The Week in Review: Data Points to Weak U.S. Economy

Several studies this week pointed to worsening economic conditions in the United States.

The Chicago Federal Reserve announced that its National Activity Index rose to just 0.28, slightly better than the contraction in December but still a sign of moribund manufacturing growth, which confirmed an earlier Markit Economics study that showed manufacturing activity was suffering from “softer underlying demand patterns” that were not related to cold weather.

Update: Abe Moving on after Amari

Another Japanese minister bites the dust with Akira Amari’s resignation from the Shinzo Abe cabinet on 28 January. Yet this time, there may be more repercussions than usual for the government.

Ironically, Amari was previously chairman of the ruling Liberal Democratic Party’s Political Ethics Hearing Committee. Now he and his secretaries are at the centre of a continuing corruption scandal over revelations about money for favours.

India’s SEZs are All the Rage, So Why the Struggle?

Indian Prime Minister Narendra Modi’s signature ‘Make in India’ initiative — which aims to transform India into a global manufacturing hub — specially mentions the importance of special economic zones (SEZs) in attracting foreign investors. However, despite the strong pitch, these export-oriented enclaves have struggled to draw investments.

Budget Primer: A Broader Lesson from Singapore’s Reporting

Singapore has regularly reported considerable surpluses in its annual fiscal budget. Budget surpluses have been an essential part of the country’s growth strategy (Asher et al. 2015) as they are perceived to provide a signal of sound public sector financial management to foreign investors, key stakeholders in Singapore’s development planning. Budget surpluses also enable the corporate income tax rate to be kept among the lowest in the world, at 17%.

Is China’s Xi on the Correct Economic Path?

President Xi Jinping’s economic thinking – “Xiconomics” – reflects the kind of adjustment that is required by Chinese rebalancing in a challenging international environment.

Three years ago, sinologists in the West – led by Barclays Capital – introduced the term “Likonomics” to describe the central tenets of Premier Li Keqiang: no stimulus, deleveraging, and structural reforms. By now, those policies were expected to push China toward a “temporary hard-landing” with quarterly growth plunging to 3%.