Closer to Normal and the U.S. Dollar Moves Up

The combination of stronger US economic data and signals from the Federal Reserve that it is looking to continue the normalization process helped the dollar extended its recovery.  The dollar posted a significant technical reversal against many of the major currencies on May 3.  The Dollar Index rose for its third week, as the greenback climbed against all the major currencies but sterling (+0.9%).

OPEC: Let the Bickering Continue

The next OPEC meeting on 2 June will act as little more than a forum for continued altercations between Saudi Arabia and Iran.  The 2 June 2016 OPEC meeting will be held amid a backdrop of oil prices near $50 per barrel, a sharp drop in Nigerian production due to sabotage, turmoil in Venezuela, Saudi Arabia operating with a new oil minister, and Iran aggressively pumping close to pre-sanction levels. 

ASEAN can still Influence the TPP and OBOR

In 2016, Southeast Asia has found itself engaged in proactive regional initiatives led by major powers. The recently signed, but still to be ratified, US-led Trans-Pacific Partnership (TPP) is one attempt, while China’s land-based ‘Silk Road Economic Belt’ and ‘21st Century Maritime Silk Road’ — which together make up its ‘One Belt, One Road’ (OBOR) initiative — puts Beijing’s proactive engagement and growing confidence on display.

Maybe India isn't Interested in American-Style Trade Rules

On 2 May 2016, US President Barack Obama published an op-ed in the Washington Post in an attempt to bolster support for the highly controversial Trans-Pacific Partnership (TPP). The TPP has become a political football in the US election primaries, with all of the leading candidates for President expressing their opposition to it.

Obama’s main argument was that the US should be writing the trade rules of the 21st century, rather than ‘countries like China’.

Africa's Looming Debt Crisis

The 2008 economic crisis is the single largest factor that has driven developing countries to seek alternative sources of financing for social and developmental infrastructure. This was a result of the drying up of bilateral loans and grants from European and American countries.

Russia's Interest in Asia comes in Below Expectations

In early 2014, Russia faced economic sanctions in response to its annexation of Crimea. Many in the country viewed the sanctions as proof that the West has contempt for Russia’s ‘sphere of influence’ in Ukraine and were trying to subvert Russian foreign policy. Responding to this pressure from the West, Moscow turned its attention to the East — specifically, to China.

Not Seeing the Leadership for the Minutes

We felt strongly that the FOMC minutes would be more hawkish than the statement that followed the meeting, and we were not disappointed.  However, our caveat remains the minutes dilute the signal that emanates from the Fed's leadership, Yellen, Fischer, and Dudley.