EM assets start the weak on a soft note, driven by risk off sentiment stemming from Greek developments. The weekend PBOC easing measures had little impact, with China stocks adding to their recent losses. With another strong US jobs report expected on Thursday, we suspect EM will continue to trade with a weak bias. Asia should still outperform, while Latin America and EMEA should underperform.
Small business investment increased in the first quarter, according to new data from PayNet, a sign that the Canadian economy is improving. The exceptions are Saskatchewan and Alberta, two provinces still reeling from the shock of low oil prices. Both provinces saw a 1.0 percent decline in investment, and loan delinquencies surged by 2.0 percent.
1) The Brazilian congress passed a new measure that will hurt the fiscal outlook, 2) Brazil central bank kept the inflation target for 2017 the same at 4.5%, but narrowed the tolerance band to +/ 1.5 percentage points, 3) Israel central bank has gotten less dovish, 4) Nigeria central bank banned importers from accessing the FX market for some goods, 5) US Treasury Secretary Lew said that China committed to limit FX intervention only to times of “disorderly market conditions.”, 6) China’s cabinet is moving to scrap a rule that limits lending by commercial banks to 75% of th
Africa is on the rise. Once, nations like Ethiopia were poster children for poverty and starvation. Today Ethiopia is one of the fastest growing economies in the world. In fact, according to a report by Forbes, seven of the fastest growing global economies today are in Africa. North Africa expects average GDP growth rate of four to five percent by 2020, and Sub-Saharan Africa expects six to seven percent.
Forecasts of China’s future run the gamut. I do not endorse either extreme. There is no significant chance that in the foreseeable future the Communist government will follow the fate of the Soviet Union. Nor do I share the view that the People’s Republic of China is becoming so powerful that it will dominate the world.
Chinese economic activity continues to decline as the government encourages borrowing money to fuel growth.
According to the HSBC flash Purchasing Managers’ Index (PMI), manufacturing activity shrunk again in June, with a reading of 49.6. Some pundits are cheering the fact that the reading is up from May, when the reading was 49.2, and beat expectations by 0.2 points, but several economists are still warning that the contractionary trend remains intact and is indicating that Chinese growth is likely to fall short of its target for the year.
Africa’s only regional bank, the African Development Bank Group (AfDB), has come a long way since its near collapse in 1995. It now reflects its mandate to fight poverty by aiding public and private investment projects that promote socioeconomic improvement.
A number of factors have driven the bank’s advances under the decade-long leadership of outgoing president Donald Kaberuka. For example, it has joined forces with other multilateral agencies such as the World Health Organisation and the World Bank to fight health epidemics such as HIV/AIDS, polio and ebola.
Recent plans to privatise a number of Australian ports have become very messy. In Victoria, both sides of government were committed to privatising the Port of Melbourne Corporation (PoMC), intending to use the proceeds to remove a number of level crossings throughout the state, and enabling it to qualify for the Treasurer Joe Hockey’s 15% recycling assets contribution scheme.
The landmark Australia–China Free Trade Agreement (ChAFTA), signed sealed and delivered, completes a trifecta of trade deals since last year with Australia’s three Northeast Asian neighbours — China, Japan, and South Korea.
Not so long ago, China’s A-share index lingered around 2,000. Before last week’s plunge, it closed at 5,200. In the short-term, the market will remain volatile, but just as China’s economy has not emulated typical market fluctuations, its potential should prevail in the long term.
Recently, the value of Chinese stocks climbed over $10 trillion for the first time, according to Bloomberg’s data. That translates to a gain of $6.7 trillion in 12 months. That is more than Japan’s entire stock market and about 40% of the U.S. market.
