Emerging Market Headwinds Remain in Place
Once again, EM assets are starting the week of on a soft note.
Category: Markets
The PAP Wins in Singapore…Again
Singapore’s People’s Action Party (PAP) is riding high in the saddle again. After a decade of slightly sagging fortunes, in which the long-ruling party’s share of the national vote slumped from over 75 percent in 2001 to barely 60 percent in 2011, the PAP rebounded mightily in the election on 11 September, snaring nearly 70 percent of votes cast. This only secured the PAP one additional seat in parliament, since extreme malapportionment and gerrymandering had already translated its 60 percent share of the votes, absurdly, into over 93 percent of all seats.
For Every Long, There is a Short
The average daily turnover in the foreign exchange market is over $5 trillion a day. Many traders and analysts put considerable weight on market positioning. However, it proves very elusive.
It Certainly Feels Like Australia is in Recession
The latest economic figures released by the Australian Bureau of Statistics (ABS) have fuelled the debate on the future of the Australian economy and prompted many to ask, “Will Australia go into a recession?”
This question is legitimate, but off the mark. In fact, the data tells us that we should not be worried about going into recession.
What we should worry about instead is how to get out of the recession. Because, like it or not, the recession is already here and the sooner we acknowledge the problem, the sooner we can start the recovery.
China’s Growth Imbalances and a Potential Solution
The People’s Republic of China (PRC) has achieved remarkable economic growth, but there are a number of serious imbalances between coastal and inland regions, and between urban and rural areas. The government wants to help bridge this gap by developing inclusive finance tools.
Mired in a Malaysian Malaise
As it tussles with multiple crises of political legitimacy and governance, Malaysia has reached a decisive point in its more than half-century history as an independent nation. What started as a shocking but not exceptional scandal has turned into a political crisis of unprecedented proportions. The Bersih 4 protests on 29–30 August in Kuala Lumpur underlined this, attended by an estimated 250,000 yellow-T-shirted Malaysians.
U.S. Growth Challenged as Prices, Sentiment Fall
Key indicators of falling aggregate demand throughout the United States rang alarm bells with investors, who sold stocks off in early morning trading.
Wholesale prices in the U.S. saw little change, with lower fuel costs dragging total producer prices lower. Producer prices stagnated in August after showing a 0.2% advance in July. Despite the worrying indication of a deflationary trap stirring, the results were better than expected. Analysts had expected a 0.1% decline in prices.
Sliding Morale Permeates South Korea’s Younger Generation
In South Korea 410,000 young people in their 20s are looking for work and unemployed. This is up from 330,000 in 2013 and is a 15-year high. But this deepening societal crisis should come as little surprise.
Left-wing Candidate Corbyn is likely Labour Leader
The veteran socialist backbencher has risen quickly from obscurity and he is almost certain to become the opposition leader this weekend. His passionate rhetoric has blown away his rival centre-left candidates.
Potential Consequences Australia Could Face in the Wake of Higher U.S. Interest Rates
On September 17, the Federal Open Market Committee will announce its decision on monetary policy in one of the most keenly watched US Fed policy meetings of recent times.
Since reaching zero (officially 0%-0.25%) in December 2008, the federal funds rate (the US equivalent of the RBA cash rate) has remained unchanged for 53 consecutive meetings. Many market participants are tipping a September rate rise, but the decision appears to be finely poised. Even Australian Treasurer Joe Hockey is hoping for decisive action to normalise US interest rates.
