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Even More Economic News and Currency Reaction

The US dollar is mostly higher to start the week, with two exceptions. The first is the yen. The unexpected contraction in Q3 GDP triggered a stock market slide (Nikkei off 3%, giving back around 40% of this year’s gains) and spurred a dramatic short-covering squeeze in the yen after the greenback first pushed briefly through the JPY117.00 level. The dollar found good bids near JPY115.50 from where it based and returned to the JPY116.30 area in the European morning. The New Zealand dollar is the other exception, helped by a strong retail sales report (1.5% in Q3 vs.

Let’s Review: Plus a Preview of this Week’s Events and Markets

The investment climate rests on three legs: the divergence that is characterized by the de-synchronized business cycle, the decline in commodity prices and a slowing of China. Data that underscores these factors appear to have stopped having much significance for investors.

European Growth Reaccelerates from the Brink

The European Union saw an acceleration of economic growth, according to new figures. Seasonally adjusted GDP rose by 0.2% in the Eurozone and by 0.3% in the European Union in the third quarter of 2014, according to Eurostat.

India Looking Beyond the end of QE in the U.S.

India was one of the hardest hit of the emerging markets after the US Federal Reserve first hinted it would cut back its quantitative easing program in May 2013. There were three reasons for this. First, global markets over-reacted. Second, India had many macroeconomic weaknesses. Third, since its capital markets were deep and liquid enough, they offered an avenue for portfolio managers targeting reduced exposure to emerging markets.

India’s Medium-Term Outlook Encouraging, Long-Term Prospects Look Promising

The perception about India has changed dramatically in recent months. There was widespread disenchantment with the lackadaisical leadership of the previous government that lacked a coherent economic strategy and vision to reinvigorate growth.

The Week in Review: U.S. Stocks, Unemployment Rise as Dollar Falls

U.S. stocks saw a small gain despite an unexpected rise in jobless claims that disrupted a steadily declining unemployment rate over the past few months. Meanwhile, recent strength in the U.S. dollar turned soft as the currency consolidated towards a more mixed view.

The Latest in the Emerging Markets

1) Hong Kong indicated it would lift the CNY20k limit for daily currency limit for Hong Kong residents

2) Moody’s upgraded the outlook on Hungary’s Ba1 rating from negative to stable

3) South African politics are heating up

4) Moody’s downgraded South Africa to Baa2 and the outlook was changed from negative to stable

5) There are press reports that Brazil’s President Rousseff will pick former central bank head Meirelles as her new Finance Minister, but this is not at all a given

Defining the Asian ‘region’ a Challenge at APEC

With considerable pomp and circumstance – and at considerable expense – it fell to China to host the annual APEC summit this year. If it lives long in the memory at all, the meeting will probably be remembered for a handshake between Xi Jinping and Shinzo Abe; a greeting that seemed to take place in an emotional vacuum stripped of the warmth that sometimes accompanies human interactions. Outside of diplomatic niceties though, there was a telling reminder of how hard it remains to build anything approaching a viable consensus in the region.

India’s Restrictive Labor Laws Challenge Investors

Investors find labour laws in India restrictive. Although progress has been made since reforms began in 1991, the labour market is still subjected to around 250 labour rules at the central and state level. India, a democracy, has found it harder than China — where labour laws are more flexible and business friendly — to undertake important reforms.

G20 Summit 2014 – A Preview and History Lesson

To understand this week’s G20 Summit being held in Brisbane, Australia, and measure its success, requires a sense of the history of economic crisis and change. Recurring crises have shaped global institutions across the interwar gold standard, the Bretton Woods postwar order, the G7 of the 1970s and the expanded G20 of today.