Markets Archives - Page 434 of 724

The Experimental Economy of China

China’s economy has always played a very unique role in challenging the global markets. China’s approach to establish two of its own banks, namely BRICS led National Development Bank and Asian Infrastructure Investment Bank (better known as AIIB) has made it evident that it wanted to rely less on the western world and wanted other Asian economies to join in. With the establishment of BRICS, China aimed to reverse the power play game of developed nations like US and Japan.

Can You Spot Me 35 Quadrillion Zimbabwe Dollars for a Cup of Coffee?

Zimbabwe dollars will be decommissioned at a rate of 35 quadrillion per US dollar (that is Z$35,000,000,000,000,000 for US$1). Any remaining Zimbabwe dollars in circulation after September 30 2015 will be officially, as opposed to practically, worthless. This is ditching a currency.

The EU “AG” (After Greece)

Critics of the Greek government repeatedly claim that its radicalism prevents a resolution to the crisis. Yet the EC has indicated that the difference between the creditors’ proposal and Syriza’s plans amounts to 2 bln euro a year in government revenue. This does not seem so radical.

Consider Ukraine’s threat of a unilateral moratorium on its debt servicing unless its creditors accept a 40% haircut. The Ukrainian position enjoys support from the IMF, though Greece does not.

A Preview of the Emerging Markets

In a familiar refrain, EM starts this week on a soft note. Most EM currencies are softer against the dollar. MSCI EM is having trouble gaining traction, and appears headed for the March lows. EM bond yields are rising in tandem with DM bond yields even though we have only seen an increase in expectations for tightening in Brazil.

Strong Dollar Poses Economic Dilemma in Emerging Markets

When the dollar starts to gain ground, it comes as a double-edged sword for economies in the emerging markets. Generally a strong dollar means more expensive imports for the emerging markets especially from the US. On the other hand, this means that exports from the emerging markets become cheaper in the US and other countries which prefer making their payments in USD.

But as it is always in the dynamic economic environment, there are numerous factors that always come into play and complicate the whole smooth picture.

Australia’s Selective Foreign Investment Rules

Once you start picking away at something, it can be hard to stop. Australia’s foreign investment regime is a case in point: successive free trade negotiations have seen welcome liberalisation, but only for selected countries. And without a clear guiding strategy, this piecemeal approach threatens to turn the regulatory regime into a mess that is difficult to navigate and discourages foreign investment.

Recent Data is Supporting the Federal Reserve’s View on the U.S. Economy

The US dollar began the new week bid in Asia, but surrendered most of those initial gains before the start of the European session. The lack of fresh news has seen the greenback drift higher in Europe, perhaps waiting for fresh direction from North America.

Australia Tries to Capture a Portion of the World’s ‘Mobile Capital’

With the huge structural adjustment that the Australian economy has to effect as the commodities’ boom fades into the distant past, the ability of Australia to attract high levels of foreign investment has never been more critically important to driving employment, productivity growth, and innovation.

Pinning Hopes on Asia Pacific Economic Interdependence for Regional Stability

The current strategic environment in the Asia Pacific can be characterised by an intensifying competition (mixed with some cooperation) between China and the US. As the strategic competition between these two countries is likely to intensify, whether they prefer to accommodate or confront each other will have spillover effects on other Asia Pacific countries’ decisions.

An Emerging Markets Status Update

1. Turkey looks to have a coalition government for the first time since 2002. 2. Brazil’s central bank is reducing its rollover of FX swaps. 3. Hungary recorded the first positive y/y CPI reading in 8 months. 4. MSCI deferred its decision on including China A-shares in its indices. 5. Mexican President Pena Nieto would not commit to reappointing central bank Governor Carstens. 6. Poland will see a cabinet reshuffle as three ministers and the parliamentary speaker resigned. 7.