North Korea is the Thorn in Russia and China's Side

On 25 June 2016, Russian President Vladimir Putin met his Chinese counterpart Xi Jinping in Beijing to discuss expanding the China–Russia strategic partnership. Much of their efforts in this direction so far have entailed taking steps to promote bilateral cooperation on economic issues and security. However, beyond this bilateral arrangement a recurring theme in the China–Russia rapprochement in recent years has been the need to balance out a unipolar US-centric global order.

I See Your (Article) 7 and Raise You 50

Due to an unlikely string of events, the UK had sorted out its government more than two months quicker than it had looked likely in the immediate aftermath of the referendum when Cameron resigned.

However, to the frustration of others in the EU, May not only named Johnson, who insulted nearly every country, as the Foreign Minister, indicated she is in no hurry to trigger Article 50 of the Lisbon Treaty that formally begins the negotiations of the separation. 

Turkish Coup Over, Risk Assets Rise

The US dollar and the yen are trading heavy, while risk assets, including emerging markets, and the Turkish lira, have jumped.  Sterling is the strongest of the majors.  It is up about 0.5% (~$1.6365), helped by the opportunity of GBP23.4 bln foreign direct investment and comments from a hawkish member of the MPC suggesting not everyone is onboard necessarily for a rate cut next month. 

The Markets' Eyes Turn Towards the EMU

Four large dramas being played out among the major high income countries. The drama in the Eurozone moves center stage in the days ahead, with an important European Court of Justice ruling due and the ECB meeting.

Lost at Sea

Chinese dredging vessels are purportedly seen in the waters around Mischief Reef in the disputed Spratly Islands in the South China Sea. Reuters

It’s now official: the South China Sea does not belong to China.

Is China's South China Sea Stance Moving Closer to UNCLOS?

Beneath its surface-level bluster, China’s authoritative response to the United Nations Convention on the Law of the Sea (UNCLOS) arbitration this week contained welcome hints that China may be subtly, and under cover of a strong stance on its South China Sea territorial sovereignty, bringing its South China Sea maritime rights claims into line with UNCLOS.

Federal Reserve Decisions Effect on Emerging Markets

If the United States Federal Reserve tightens or eases monetary conditions, this impacts emerging economies. Over the years since the global financial crisis, a second type of spillover has emerged: spillovers stemming from the uncertainty about future monetary policy. Uncertainty spillovers exist above and beyond those stemming from specific policy steps.

Post-BOE Meeting

The Bank of England surprised many, if not most, participants by not changing policy.  There was no rate cut and no asset purchase plan.

However, there can be little doubt that the BOE will take action next month.  The minutes indicate that officials are considering a package of measures that will be aimed at supporting growth.  This could include new asset purchases.

Pre-BOE Meeting

After a nearly three weeks of turmoil following the UK referendum, there is now a sense of order returning to UK politics.  Two elements of the new government are particularly relevant.  First, May demonstrates strategic prowess by putting those like Johnson and Davis, who campaigned for Brexit, to lead the negotiations with the EU, while putting Tories who favored remaining in the EU in the internal ministries.