Agriculture Reforms Unlikely to Come from Japan’s LDP
Only one party contesting this week’s Japanese election is advocating agricultural reform and it is not the LDP.
Category: Markets
China’s Ambition versus Reality in the Digital Age
In February 2014, Chinese President Xi Jinping was appointed Chair of the Central Cybersecurity and Informatization Leading Group, an agency which coordinates China’s cybersecurity and ‘informatisation’ policies. The move reflected deep dissatisfaction within the leadership of the pace of innovation in the country. Xi’s appointment reflects China’s willingness to change this — but only to an extent.
Global Markets React in the Wake of China’s Rate Cut
In a move that has taken the world economy by surprise, China has cut its interest rates, something that has not happened since November of 2012. In an announcement made by the People’s Bank of China, the one-year deposit rates are now lower by 25 basis points (bp) and the one-year benchmark rates of lending are lower by 40 bp.
The Week in Review: Equity Volatility, Falling Oil, GDP Revisions
Globally, stocks slid while American stocks oscillated between gains and losses as investors assessed the impact that cheap oil will have on global markets.
A Review of the Emerging Markets
1) Indonesia’s recently elected President Jokowi is facing his first major popular challenge
2) Turkey raised the daily dollar auction amount from $20 mln to $40 mln
3) There are signs of some growing concern over currency weakness in Mexico
4) Brazil central bank chief Tombini is already changing the tune from the statement of the last COPOM meeting
5) Moody’s upgraded the Philippines one notch to Baa2 with stable outlook
6) Ethiopia raised $1 bln via a debut 10-year Eurobond sale, amidst strong demand
U.S. GDP Upgraded on Falling Oil, Rising Dollar
Stronger demand for services could drive the United States GDP growth rate higher, causing many investment banks to turn bullish just as U.S. stocks see a wide selloff.
Service industry revenue rose 5% year-over-year in the third quarter of 2014, far above analysts’ expectations. Economists are attributing the surprise surge to greater discretionary purchasing power amongst American consumers as oil prices fall. The news caused analysts at JP Morgan to upgrade GDP expectations from 4.3% to 4.4%, while Barclays raised their expectation from 4.1% to 4.2%.
OECD Estimates UK Economy Recovery to Extend until 2016
A revival in consumer spending and business investments point to a UK recovery extending into 2016, predicts the Organization for Economic Co-operation and Development (OCED). The recent growth experienced by recently stagnant UK economy expects to clock a decent 3% growth by the end of this financial year, and OCED has forecast an optimistic future couple of years.
Hong Kong, Macao, and Taiwan Should Address Structural Reforms
The old growth engines of Hong Kong, Macao and Taiwan are decelerating. The new ones are predicated on deeper economic ties with China.
Recently, the governing Kuomintang suffered a landslide defeat in local elections in Taiwan, China; the worst electoral setback since KMT’s coming to power in 1949. As a result, President Ma Ying-jeou named a new cabinet head, even as he resigned as KMT chairman.
A 2014 Health Report on BRICS
In 2001, the term BRIC was coined by Jim O’Neill, formerly with Goldman Sachs, who had used the acronym in his thesis on emerging markets of Brazil, Russia, India and China. With inclusion of South Africa in 2010, BRICS was formed. It started to reflect the strength of the emerging markets across the globe. Together BRICS comprises of 40% of the world’s population, 21% of the world’s GDP and 30% of the global territory. To many, BRICS had only been holding only meetings, never reaching on any big development or funding plans.
Calls for Abe to Raise Japan’s Consumption Tax
Japan’s Prime Minister Shinzo Abe dissolved the lower house of the Diet on 21 November and called a snap general election on 14 December. At the same time, Abe announced that he would postpone the second hike of the consumption tax rate from 1 October 2015 to 1 April 2017.
