Category Archive: Global Macro

Emerging Market Preview: Week Ahead

EM enjoyed an extended rally last week, and it should carry over to the early part of the week. The Wednesday FOMC meeting poses a risk to EM, especially if markets continue to price in a more hawkish Fed. The dot plots and press conference will be...

Emerging Markets Preview: Week Ahead

(from my colleague Dr. Win Thin)Risk sentiment ended last week on a strong note, and that should carry over into this week.  The global liquidity backdrop remains positive for EM, with the ECB widely expected to add more stimulus on Thursday.  I...

Emerging Markets: What has Changed

In the EM equity space, Brazil (+17.8%), Singapore (+7.1%), and India (+6.4%) have outperformed this week, while Qatar (+0.6%), Poland (+1.1%), and Malaysia (+1.7%) have underperformed.  To put this in better context, MSCI EM rose 6.8% this week whil...

Revolutionary Guards: The Way of the Iranian Future

Iranian elections have supposedly put a very nice ‘moderate’ spin on Iranian politics in parliamentary ranks, and more importantly, Assembly of Experts composition. While it would be churlish to deny, it represents a significant step forward for...

Emerging Market Preview, First Week of March

  EM ended last week on a soft note, due to a variety of both external and internal factors.  Firm US data continue to support our call for resumed Fed tightening, and this gave the dollar a bit of a bid.  With the dollar gaining against the...

Weekly Emerging Markets: What has Changed?

(from my colleague Dr. Win Thin)

Emerging Market Preview: Week Ahead

(from my colleague Dr. Win Thin) We think that it’s still too early to say whether Friday's price action was simply profit-taking ahead of the weekend, or the resumption of overall negative market sentiment.  We think the global backdrop...

Weekly Emerging Markets: What has Changed?

In the EM equity space, Colombia (+0.3%), Chile (+0.2%), and Poland (-0.6%) have outperformed this week, while India (-6.6%), Czech Republic (-5.5%), and Hong Kong (-5.0%) have underperformed.  To put this in better context, MSCI EM fell -3.9% this w...

Emerging Markets: Preview of the Week Ahead

Czech Republic reported disappointing December industrial (0.7 vs 5.9% y/y consensus).  It reported a small trade surplus rather than the expected deficit.  It will report January CPI on Friday, and is expected to rise 0.5% y/y vs. 0.1% in...

China’s 3 trillion dollar mistake

When looking at the current state of the Chinese economy it is important to note what happened leading up the ongoing predicament. By managing the USD/CNY exchange rate the Chinese factory worker was essentially funding excess consumption in the Unit...

Emerging Markets: What has Changed

In the EM equity space, UAE (+6.2%), Indonesia (+4.0%), and Qatar (+1.8%) have outperformed this week, while Hong Kong (-2.0%), Czech Republic (-1.9%), and Hungary (-1.2%) have underperformed.  To put this in better context, MSCI EM fell -0.1% this w...

Emerging Market Preview: Week Ahead

As we suspected, the current EM bounce still has some legs.  The BOJ’s surprise easing helped EM and risk end on last week on a strong note, and we expect that to carry over into this week.  Within EM, we will start to see the first readings for...

Emerging Market Preview: Week Ahead

Singapore reports December CPI Monday, and is expected at -0.7% y/y vs. -0.8% in November.  It then reports December IP Tuesday, and is expected at -6.8% y/y vs. -5.5% in November.  Q4 unemployment will be reported Thursday.  With deflation risks...

Honey, I Shrunk the Middle Class: Perhaps 1/3 of Households Qualify

If it takes more than $126,000 to fund a qualitatively defined middle class lifestyle, what sense does it even make to call this "middle"? The Pew Research Center's recent report The American Middle Class Is Losing Ground: No longer the majority and...

China, the SDR, and Toward a Less Euro-Centric World

(Here is a draft of a monthly column I write for a Chinese paper) It is official.  The Chinese yuan will be in the SDR.  At a 10.4% share, it is a bit more than I expected, but less than the 14%-16% share that the IMF staff has intimated a few ...

Emerging Markets: What has Changed

(from my colleagues Dr. Win Thin and Ilan Solot) 1) Mauricio Macri, the mayor of Buenos Aires, won the Argentine presidential election with 52% of vote  2) The latest political developments in Brazil rocked asset prices  3) The Brazilian...

China in Continuous PPI Deflation and No Depression In Sight?

Both Chinese PMI and the producer price index (PPI) are in deflation since 2012. This opens a lot of questions about the sustainability of Chinese economic growth, but also about the certain economic theories that consider deflation as a precursor of...

Will wage inflation stop the stock market rallye?

Stock markets can only improve if sales increase more than the costs of the companies. Wage inflation describes the development of the major component of company costs. Torsten Sløk of Deutsche Bank describes the development of American wages

The Self-Employed Middle Class Hardly Exists Anymore

It's sobering that in a nation of 317 million people (of which 145 million people file tax returns), only 3% of all those reporting income are self-employed people earning enough to support a middle class life without the additional income earned by a...

Endangered Species: The Self-Employed Middle Class

Including the professional class, perhaps 3% of the workforce is truly independent. Being self-employed (i.e. owning your own small business that does not require employees) is an integral part of the American Dream. Many start out dreaming of a corner...