On 25 August 2015, Singapore’s President Tony Tan officially dissolved the parliament, triggering early parliamentary elections. While these elections, by law, could have waited until January 2017, 2015 is particularly advantageous for the incumbent People’s Action Party (PAP).
Indian growth stood at 7.0 percent year-on-year in the first financial quarter of 2016, a drawback from the 7.5-percent growth seen from the previous cycle, notes AFP. Prime Minister Narendra Modi’s rightist cabinet is responsible for numerous reforms, but outside pressure grows for his administration to do more. Modi aims to take India into double-digit growth territory, and officials expect an 8.1-percent surplus for the year, but experts believe such an assessment may be overly optimistic.
The capital markets are quieter today. Equities remain heavy, but losses are comparatively mild. Core bond yields are slightly softer. The US dollar is firmer against the major and most emerging market currencies.
The news stream is light and the focus before the ECB meeting tomorrow is the US ADP employment estimate. Expect a 200k increase after 185k in July. The Bloomberg consensus is for a 218k increase in nonfarm payrolls when reported on Friday.
It ain’t easy being an autocrat.
Take China’s current President and Party Secretary, Xi Jinping. Since coming to power, Xi has shown himself to be unhindered by former norms of collective decision-making, and collective blame.
Rather than portraying all decisions as made unanimously by senior leaders, each of whom is responsible for a different area of governance; Chinese media portrays Xi as making decisions and heading nearly every major policy reform and advisory group.
Nobel Prize winning economist Paul Krugman recently said with reference to China’s President Xi Jinping ‘Are you starting to have the feeling that when it comes to economic policy Xi-who-must-be-obeyed has no idea what he’s doing?’
Many observers tend to assume that India will play a large and growing part as a great power in a wider ‘Indo-Pacific’ strategic system, that it will use its growing power to balance and limit China’s regional weight. Some caution is called for — although this outcome is possible, it is far from inevitable.
EM is starting the week with a weak tone, though the panic of last week has abated for now. The bounce in commodity prices seems to have run out of steam, which is not helping market sentiment. Fed Vice Chair Fischer’s comments from Jackson Hole has put the September FOMC meeting back into play, and firm US jobs data Friday would support notions of a Fed liftoff then. We remain bearish on EM assets for now given the negative global backdrop.
The Chinese government is demanding brokerages use their own money to help prop up the falling stock market with new requirements for stock buybacks.
The China Securities Regulatory Commission met with 50 stock brokerages over the weekend, and asked that brokerages begin buying shares from clients to limit selling pressure. In total, the CSRC is asking brokerages to buy up to 10% of the total value of the Chinese stock market.
1. Turkey has formed an interim government, but the AKP is slipping in the polls. 2. The South Africa Reserve Bank (SARB) is debating FX intervention, but sending confused messages. 3. Korea steps up its rhetoric to contain market volatility and announces new stimulus measures. 4. Bank of Israel has renewed talk of unconventional measures. 5. Ukraine and its creditors have reached an agreement on debt restructuring. 6. The source of tension in Brazilian politics is shifting. 7. There were several new measures out of China this week. 8.
In September 2013, Japanese Prime Minister Shinzo Abe pledged to create a society in which ‘all women can shine’. Abe acknowledged that women had long been an underutilised resource in the Japanese economy. He promised to boost female labour participation rates, increase the presence of women in corporate boardrooms and improve gender equality. Two years on, is ‘womenomics’ working in Japan?
