China’s diminished growth prospects have figured prominently in recent commentaries about global economic conditions and world stock markets (e.g. Frankel 2016). The general view, with which I concur, is that China will grow in the future at a much slower rate than it has in recent decades. This growth slowdown will reduce international trade and has probably contributed already to the depression in oil prices (Blanchard 2016).
Two weeks after the terrorist attack in front of the Sarinah Department Store in central Jakarta, a clearer picture is emerging of the key figures behind the operation and its significance for Indonesian jihadism.
Equity markets struggled Monday amidst two reports pointing to a sluggish and weakening job market in America. U.S. nonfarm payrolls rose by just 151,000 versus expectations of 190,000 in January, according to a report by the Bureau of Labor Statistics (BLS). The weakness was broad based and was reflected in weak labor force participation, which remained little changed at 62.7%, according to data compiled by the BLS.
Recent data reveals that Malaysian exports for December grew slower than analyst predicted they would due to weaker commodity demand on the world market, according to Reuters. Natural gas output dropped as well, but experts believe government policy and higher domestic demand could compensate for lacking exports. The government also adjusted its budget late last month in recognition of lower oil prices.
After a meltdown in Asia, the global capital markets are stabilizing in Europe. The US S&P managed to recoup about half of its losses before the close yesterday, but this gave not comfort to Japanese investors. The yen’s strength and ongoing concerns about banks’ exposure to energy companies took the down 5.4% and pushed the 10-year JGB yield into negative territory for the first time.
Unlike other emerging economies, strong investor sentiment and the meltdown in crude oil prices bolstered India’s growth in the last financial year. Though the projected growth rate for 2016 shows a slight decline of 0.1 percent, the World Bank predicts that India will grow by a robust 7.8 percent this year and by 7.9 percent in the next two years. This means India is shaping up to outpace China in the next three years.
EM assets for the most part fared well last week, and positive sentiment should carry over into this week. China reported January foreign reserves over the weekend, and they fell less than expected to $3.231 bln. China markets are closed this week for the New Year holiday. While there should be little risk of negative headlines from the mainland, markets should watch how CNH trades in the offshore markets that are open.
A dispute before the World Trade Organization (WTO) has surprised many; India has appealed a ruling by the WTO and now seeks a compromise in a dispute regarding domestic content requirements for the nation’s solar panel programs. The dispute has caused a number of companies in India’s renewable energy industry to halt expansion until a resolution can be reached.
One of the biggest annual celebrations around the world is upon us. February 8 marks the start of the Lunar New Year in China. Also known as the Spring Festival, it is the most important holiday in the Chinese calendar, akin to Christmas in the West. An important time of family reunions and catching up with old friends, it is also a huge consumer holiday, as people usher in the year of the monkey.
The Philippine presidential campaign period officially begins on 9 February. But amid the same old spiels about political piety, not one of the five presidential candidates — current Vice-President Jojo Binay, Senator Miriam Defensor-Santiago, Mayor Rodrigo Duterte, Senator Grace Poe and Secretary Mar Roxas — has raised the most pressing issue facing the Philippines, the country’s massive population.
