1) Indonesian Finance Minister Bambang Brodjonegoro said the government will probably raise subsidized fuel prices before year-end
2) Dilma Rousseff was re-elected as President of Brazil
3) Brazil’s central bank delivered a hawkish surprise too on Wednesday, hiking rates by 25 bp to 11.25%
4) Protests continue to spread in Hungary
In August, the Appellate Body of the WTO ruled that China’s export duties, quotas, and administration of rare earths, tungsten and molybdenum products violated various provisions of the GATT and the Accession Protocol that China promised to implement when it joined the WTO in 2001. Ruling in favour of the US, the EU and Japan, who had filed a joint complaint in March 2012,the WTO asked China to remove its export tariffs and quotas within a reasonable amount of time or face punitive retaliatory tariff measures.
The market is generally expecting a dovish FOMC statement. We have argued that it will most likely be little changed, except for modification relating to the asset purchases. Keen interest will be on its references to inflation.
Despite slowing home sales in early 2014, economists are expecting a strong home buying market in 2015 as a combination of decelerating home price growth and falling mortgage rates make homes more affordable for Americans.
This Great Graphic is from the Dutch Bureau of Economic Policy Analysis (CPB), and was posted by Steve Goldstein at MarketWatch. It shows the three-month average year-over-year growth rate of global trade.
The growth of trade slowed dramatically in from the second half of 2010 to the end of 2011. The pace of growth has steadied around 2% over the last three years.
The US dollar is narrowly mixed in quiet turnover. The historic FOMC meeting that announces the end of QE is finally at hand. This marks a new phase, post-QE, for monetary policy, and the US economy more broadly.
Although there had been some jitters, investors have come around to expect the Federal Reserve to announce its commitment to end QE today. Not ending QE would potentially be more disruptive than ending it.
Non-performing originations in the top 130 European banks have reached 8.8% of the Eurozone’s total GDP, in a sign that high debt loads, bankruptcies, deflation, and stagnant unemployment is making it impossible for Europeans to pay their debts.
European equities saw broad declines in Monday trading as the European Central Bank saw over two dozen failed Eurozone banks amidst the debut of its small bond-buying program.
For over three years, Western Australia has taken first place on CommSec’s ‘State of the States’ report. However, finally, an increase in the housing sector has allowed New South Wales to steal the top spot, rising from last to first in six years. It’s taken over a decade, but NSW is now officially the strongest state economy in Australia.
Global risk-off sentiment and the reelection of Dilma Rousseff as the Brazilian president is setting EM off on the back foot to start the week. However, the lack of large moves in the dollar could mean that negative sentiment will be contained to equity markets. Aside from positioning adjustment following the Brazilian elections, we don’t see any major idiosyncratic risk to look out for this week, and assume that the tone will be set mostly by developed markets.
The APEC summit is just over a week away and all stops are out in Beijing to make it an economic and diplomatic triumph, despite the huge underlying challenges in managing China’s relations with the region. The primary goals and foundations of APEC are economic — delivering on Asia’s economic development ambitions within the framework of the rules-based global economic system.
