The Upcoming Week’s Issues That Should Hold Market Participants’ Attention
We identify six key issues facing investors:
– US economy
– Brinkmanship in Athens
– Cyclical recovery in Europe
– BOJ policy response
– RBA meeting
– Oil prices
US Economy
Category: Markets
Is National Government Decentralization Timor-Leste’s Economic Growth Solution?
Timor-Leste’s new Prime Minister, Rui Araujo, has inherited a policy of decentralising the nation’s governance. Given capacity issues, this process is unlikely to bring broader-based rural development to Timor-Leste in the short term. But, if managed effectively, greater decentralisation could have some positive impacts on village-level infrastructure and autonomy.
The Dollar’s Kryptonite in the Form of a Jobs Report
The US March employment report makes for dismal reading. Job growth collapsed to 126k, the least monthly total since December 2013. Adding insult to injury, there was a 69k downward revision to this year’s job growth. The average workweek slipped 0.1%, which may not sound like much suggests a significant drag on output.
Now is not the Time to Practice Corporate Tax Avoidance in China
China’s tax authority announced in February 2015 monitoring multinational firms more closely in an effort to crack down on tax avoidance. The policy is part of the Base Erosion and Profit Shifting project, which is a collective effort of G20 countries to curb tax avoidance by multinational firms. There is some concern about whether the policy will work in China, given current levels of corruption and ineffective regulations. In this context, China’s ongoing efforts to weed out corruption mean the policy has more chance of success.
Singapore’s PAP Faces Far More Complex Challenges After Lee’s Passing
Lee Kuan Yew leaves behind an immense legacy. As Singapore’s first statesman, Lee inadvertently became the leader of an independent city-state after Singapore was expelled from Malaysia in 1965. He led a government of very talented officials who together transformed the former British colony into a first world country.
Japan’s Fiscal and Monetary Solutions are Exceptionally Harsh
Japan is facing a dual problem of an ageing population and increasing government debt. While pension payouts will balloon out in the next decade, a low tax base means that the government will struggle to finance this. In 2013, Japan’s gross debt-to-GDP ratio was 243 percent, the highest among OECD countries. If the government does not implement strict reform, Japan risks a financial crisis similar to the European crash in 2009.
Where is Greece on Germany’s Priority List?
After several months of tense and often antagonistic negotiations, Greece and its creditors appear to be at a stalemate. In order to receive a further bail-out funds, the Syriza government has proposed a set of reforms that in the view of Germany, the ECB and the IMF “don’t make the grade”.
To many, any compromise by Syriza represents a tragic surrender of its principles and a blow to the emerging anti-austerity sentiment rising across Europe. As one Athenian commentator observed:
The Unusually Complicated Australian Submarine Procurement Process
Procuring a new fleet of submarines is a daunting task for any government. The capability requirements, technological challenges, project timelines, and costs involved all make submarine procurement a complex challenge.
Americans Saving More, Is That Good Or Bad?
According to a recent report by the Commerce Department (and reported by the Wall Street Journal), Americans are saving more of their incomes than they have since 2006. Analysts are uncertain of just how long this trend will continue.
The Findings
Lee Kuan Yew Transformed Singapore
Lee Kuan Yew was quite simply, and unquestionably, one of the outstanding national leaders of the last hundred years. He worked on a small canvas, but what he achieved in tiny Singapore not only transformed the lives of his own people profoundly, but had an immense impact beyond Singapore in shaping the Asia of today.
