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macro and politics

Has Europe really turned the corner?

Lately a growing number of indicators have suggested that the European economy might be out of the woods, heading towards a more robust recovery. For instance, while European inflation remains significantly below the ECB’s inflation target of close to but below 2%, it is worth highlighting that the year-on-year headline rate has in fact doubled from 0.7% in October 2019 to 1.4% in January 2020….

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Some quick thoughts on Italy after yesterday’s regional elections

Italy currently has a “yellow-red” government

Conte is the Prime Minister supported by 5 Star Movement (yellow) and the left party (red). Prior to this government there was a “yellow-blue” government led by Conte and supported by 5 Star movement (yellow) and the right party with Salvini (blue).

Over the last couple of years there have been 2 significant changes

  1. The right-wing parties…

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Brazil’s election: What’s at stake?

Global investors are paying special attention to the forthcoming general election in Brazil, not only because the country is the world’s eighth-largest economy, ahead of Italy and Canada, but also because in these turbulent times for Emerging Markets (EMs), an unexpected or market-unfriendly outcome could bring more volatility to the entire asset class. After the recent sell-offs in Turkey and …

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“The Great Economists” by Linda Yueh. Our interview, and chance to win her book!

We interview the academic and TV presenter about her choices of history’s most important economists, and ask what we can learn from them in solving our current problems. Also, win a copy of Linda’s book in our competition.

From Adam Smith, to Robert Solow, Linda Yueh’s latest book examines twelve important economists and suggests how we might use their thinking as we tackle modern society’s ec…

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Beyond hard, soft and no Brexit

(Blog originally posted on www.bruegel.org)

Recent declarations by political leaders suggest that a hard Brexit is the most likely outcome of the negotiation between the European Union and the United Kingdom that will start next spring after the UK government triggers Article 50. In Britain, several cabinet members have made statements pointing in this direction. And in Brussels, Donald Tusk, p…

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President-elect Trump. 5 predictions on what happens next in the global economy and markets

The votes are in and it is clear. For the second time in 2016 we have had a major rejection of the political status quo. Following on from the shock UK referendum result, a Trump victory is further evidence that many believe that we have reached peak globalisation and income inequality. The perceived losers of globalisation have turned the incumbent political system on its head, and with it we …

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What I am doing to protect against Brexit… or Bremain.

Over the last few days and weeks, as the odds of a vote to leave in the referendum have moved from a remote possibility to somewhat less so, market participants have spent more and more time wondering about how they are positioned going into the vote, relative to their benchmark, their peer group, or their risk budget. The significant moves that we have seen in recent trading sessions show pret…

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Russia Trip Notes – catching a cold but still standing up

Russian corporate bonds were one of the best performing asset classes last year, with a total return for the JPM CEMBI Russia index of +26%, despite Russia’s GDP dropping by -3.7% on the back of a hugely challenging economic backdrop and geopolitical headwinds. I recently spent a week in the cold of Moscow’s early spring, meeting banks and corporates to help me assess whether the economic sanct…

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How long until China reaches the floor of the recommended reserve adequacy range?

Much has been discussed on the topic of the optimal level of foreign exchange reserves. One of the common methodologies is the IMF’s ARA (Assessing Reserve Adequacy) metric, which essentially provides a range based on a country’s trade, broad monetary aggregates and external liabilities. How much weight should be given to each factor varies according to the economic structure of each country, i…

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Inflation expectations at lowest level in last three years – M&G YouGov Inflation Expectations Survey Q4 2015

We recently blogged about the marked effect the collapse in commodity prices, particularly oil and energy, have had on global inflation rates across the world. Headline inflation rates in major western economies have been in, or have flirted with, deflation throughout the year in spite of ongoing economic growth and a steady recovery in labour markets.

An interesting issue is whether this, seem…

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