Category Archive: 5) Global Macro

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Why Wages Have Stagnated–and Will Continue to Stagnate

2016-08-15

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2016-08-15

Mainstream economists are mystified why wages/salaries are still stagnant after 7+ years of growth / "recovery." The conventional view is that wages should be rising as the labor market tightens (i.e. the unemployment rate is low) and demand for workers increases in an expanding economy.

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Emerging Markets: Preview of the Week Ahead

2016-08-15

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2016-08-15

EM FX ended the week on a soft note, despite the weaker than expected US retail sales report. Official concern about strong exchange rates is beginning to emerge. First it was Korea, then on Friday it was Brazil as acting President Temer said his country needs to maintain a balanced exchange rate, neither too weak nor too strong. We expect more pushback to emerge if the current rally is extended. Still, the global liquidity outlook for now favors...

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Emerging Markets: What has Changed

2016-08-12

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2016-08-12

S&P upgraded Korea a notch to AA with a stable outlook. Voters passed the constitutional referendum in Thailand by a wide margin. The IMF and Egypt have reached a staff-level agreement on a 3-year $12 bln. loan program. Argentina’s central bank will begin using a new overnight rate to manage monetary policy. Political uncertainty has returned to Brazil.

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Emerging Markets: Preview of the Week Ahead

2016-08-07

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2016-08-07

EM ended last week on a firm note, despite the stronger than expected July jobs report. As we suspected, one strong US data point is not yet enough to derail the dovish Fed outlook. With the RBA and BOE cutting last week and the RBNZ expected to cut this week, the global liquidity backdrop remains supportive for EM and risk.

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Emerging Markets: What has Changed

2016-08-05

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2016-08-05

India’s upper house approved the creation of a Good and Services Tax (GST). The Polish government softened its stance on the proposed Swiss franc loan conversion plan. Support for South Africa’s ruling African. National Congress (ANC) appears to have fallen below 60% for the first time ever. Brazil’s Senate impeachment committee recommended putting President Rousseff on trial.

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Do boxers’ headguards protect them from concussion and injury? | The Economist

2016-08-05

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Male boxers will not wear headguards at the Olympic Games in Rio. According to a study by the sport’s governing body, there are fewer cases of concussion when headguards are not worn. However, a new imaging technology known as diffusion MRI could spot signs of potential brain injury at an early stage. Click here to …

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Emerging Markets: Preview of the Week Ahead

2016-07-31

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2016-07-31

EM ended last week on a firm note, helped by the weaker than expected US Q2 GDP report as well as the small bounce in oil. With the RBA and BOE expected to ease this week, the global liquidity backdrop remains favorable for EM and “risk.” US jobs report Friday will be very important for EM going forward. We get our first glimpse of the Chinese economy for July with the PMI readings this week.

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Emerging Markets: Week Ahead Preview

2016-07-25

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2016-07-25

EM ended the week on a soft note, as the dollar reasserted broad-based strength against most currencies. The FOMC meeting this week could see the Fed push back against the market’s dovish take on policy, in which case EM would be likely to remain under pressure.

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How to make Donald Trump look presidential | The Economist

2016-07-22

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The Republican party’s challenge was to make Donald Trump look presidential. Whether they succeeded is up to the voters Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 The Republican Party had a challenging task at the party convention – Make Donald Trump look presidential. They started by projecting an America dangerously distressed in …

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Emerging Markets: What has Changed

2016-07-22

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2016-07-22

The New York Times reported that the US is preparing to seize $1 bln in assets tied to 1MDB. S&P downgraded Turkey a notch to BB with a negative outlook, citing political uncertainty. Turkish President Erdogan declared a three-month state of emergency. The Nigerian Naira weakened above 300 per dollar for the first time. Brazil’s central bank signaled a longer wait until it cuts rates.

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A monarchist and a republican go head to head | The Economist

2016-07-22

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British republicans are stuck in the minority. See both sides to the argument: Graham Smith, who campaigns against the monarchy, and Thomas Mace-Archer-Mills, the chairman of the British Monarchist Society. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Check out Economist Films: http://films.economist.com/ Check out The Economist’s full video catalogue: http://econ.st/20IehQk Like The …

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The music industry and the digital revolution

2016-07-19

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The music industry has come a long way since Radiohead allowed fans to pay what they wanted for an album. But there is still plenty of digital disruption going on. Tech companies such as Kobalt provide an alternative route for musicians to find fans and manage their money—without having to rely on a record deal. … Continue...

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Radiohead’s experimental business model changed the music industry

2016-07-19

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How Radiohead’s “In Rainbows” album release broke the mould in the music industry Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 The Disrupters is an original series exploring how major industries—from music and cars to hospitality—are currently being disrupted by the latest wave of digital innovation. As well as enjoying privileged access into …

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Emerging Markets: Preview of the Week Ahead

2016-07-18

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2016-07-18

EM ended last week on a soft note, due in large part to the attempted coup in Turkey. Weakness in the lira spilled over into wider EM weakness in thin Friday afternoon market conditions. The situation in Turkey has calmed, and so EM may gain some limited traction this week. However, that calm will likely be very fragile and so we retain a defensive posture with regards to EM.

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Emerging Markets: Preview of the Week Ahead

2016-07-11

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2016-07-11

EM and other risk assets rallied on Friday after the strong US jobs data. It appears that markets are pricing in a benign backdrop for risk near-term; that is, the US economy is recovering but not by enough to warrant an imminent Fed rate hike. The July 27 meeting seems unlikely, and so the next likely window would be September 21. Yet EM typically weakens in the run-up to FOMC meetings and so investors should be very careful about taking on too...

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Emerging Markets: What has Changed

2016-07-08

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2016-07-08

In the EM equity space as measured by MSCI, Hungary (+3.0%), UAE (+2.0%), and Qatar (+0.7%) have outperformed this week, while Mexico (-3.4%), South Africa (-2.1%), and Colombia (-1.7%) have underperformed. To put this in better context, MSCI EM fell -1.2% this week while MSCI DM fell -0.3%. In the EM local currency bond space, the Philippines (10-year yield -22 bp), Singapore (-12 bp), and Brazil (-11 bp) have outperformed this week, while Russia...

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What if everyone had a personal drone? | The Economist

2016-07-06

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The elation of flying is the stuff of dreams. But what if personal drones could make our dreams come true? The Economist’s resident cartoonist KAL lets his imagination fly. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 For more imaginary scenarios in the fields of politics, business, technology and history, visit http://worldif.economist.com/ Check …

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The biggest street mural in the world | The Economist

2016-07-05

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Alfredo shows off the street art of Buenos Aires. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Passport is an original travel series for the intellectually and culturally curious, exploring some of the most exciting city destinations in the world. The insiders’ guide to each city follows at the shoulder of three local …

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Carnival at night in Buenos Aires | The Economist

2016-07-05

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Barbara Aguirre shows us a traditional Argentine street festival—a murga. The performance is steeped in the history of the country. Click here to subscribe to The Economist on YouTube: http://econ.trib.al/rWl91R7 Passport is an original travel series for the intellectually and culturally curious, exploring some of the most exciting city destinations in the world. The insiders’ …

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Emerging Markets: Preview for the Week Ahead

2016-07-04

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2016-07-04

EM and risk recovered nicely from the Brexit turmoil last week. Yet we think markets are getting too carried away with the "low rates forever" theme and are likely underestimating the capability of the Fed to tighten before 2018. This Friday, the June jobs data could spark a shift in sentiment with a strong reading. Consensus is currently 175k jobs created, up from 38k in May.

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