Republican presidential hopeful Donald Trump’s protectionist prescriptions have led to renewed speculation about whether trade wars are on the horizon.

In other words, if, under a Trump presidency, the United States were to raise its tariffs against some of its biggest trading partners – China, Japan, and Mexico – would those countries retaliate in kind? In addition, what would this mean for the global economy?

Markets Stabilize after the Brussels Attacks

A series of attacks at Brussels airport and metro casts a pall over the market.  The attacks come as Europe prepares what for many will be a long holiday weekend.  Gold, the dollar and yen seem to have been the beneficiaries.   Bonds are generally firmer and equities lower.  However, in late morning activity in London, the markets began stabilizing.

If You're Happy and You Know It, Ditch Your GDP

Denmark reclaimed its place as the happiest country in the world, according to the latest annual World Happiness Report. Switzerland, Iceland, Norway and Finland followed in quick succession at the top, while Benin, Afghanistan, Togo, Syria and Burundi languished at the bottom.

Can 'Economic Gravity' Pull India and Pakistan Together?

South Asia is one of the least economically integrated regions in the world. At 5 percent, trade shares among South Asian neighbours are lower than trade shares among Sub-Saharan African economies. This is largely because the region’s two biggest players — India and Pakistan — do not have normalised economic relations.

SAFTA Not Working Like NAFTA

Pakistan’s trade with India leaves much to be desired. The volume of bilateral trade is very low, ranging between only 2 to 3 percent of each country’s total trade, and is concentrated in a few commodities. Trade is low and limited because the trade regimes of each country are closed to each other.

Bilateral trade between Pakistan and India has always faced a series of tariff and non-tariff barriers that are a consequence of the political tensions between the two countries.

Ian Duncan Smith is Out, Pressuring Cameron and the Pound

The US dollar is beginning the week mostly firmer against the major and emerging market currencies.  The Japanese yen, where local markets were closed for the spring equinox is up slightly, and the Australian dollar turned higher in the European session. 

However, sterling has remained under pressure from the start.  Ian Duncan Smith's resignation ostensibly over cuts in disability spending is seen as another front in the Brexit debate that has split the cabinet and the Tory Party. 

Thank Goodness for the Second Half of the First Quarter

The year started poorly, to say the least. Equity markets plunged from the get-go.  The Nikkei, DAX and S&P 500 gapped lower on the first trading day of the year.  Emerging markets and commodities were smashed. 

Many economists blamed the Federal Reserve for hiking rates in mid-December.  Pundits warned that the seven-year bull market and weak economic recovery in the US was ending.  A recession loomed and worse because monetary policy had lost its effectiveness and fiscal policy was political neutered. 

Additional Dollar Weakness Would Not Surprise

The US dollar had a difficult week.  The price action after the ECB meeting had undermined the technical tone, and the dollar took another leg down after the FOMC moved closer to the market expectation by reducing the number of rate hikes the median official thinks would be appropriate this year from four to two.

Modi's 'Act East' Policy gets a Boost from Bangladeshi Relations

While attention has focused on India’s strained ties with its neighbours, some notable strides have been made in the bilateral relationship with Bangladesh. Progress on the political front has captured the spotlight, with the recent Land Boundary Agreement. However, both sides have also made significant progress in developing their economic ties and connectivity.

After a Weak Week, the Dollar Regains Some Ground

The US dollar is firmer against most major and emerging market currencies to pare this week's decline.  There are three notable exceptions, and they are all in Asia.  For all practical purposes, the dollar is flat against the Japanese yen near JPY111.30. 

The South Korean won is up almost 1% to extend this week's pace setting the gain to 2.65%.  The dollar has fallen 7.2% against the won since it peaked at the end of last month.  The Taiwanese dollar is 0.6% higher, which essentially doubles this week's gains.