China and Spain in Latin America: Cooperate or Compete
China is already the top lender in Latin America, while Spain is the second biggest investor in the region after the US. But joint projects there are scarce.
In the World
It Is Time To Break Up The BRICS
BoAML | One of the most popular ideas in emerging markets economics is grouping Brazil, Russia, India and China together. Here we argue that grouping these very different economies together for economic forecasting was never very useful in the first place. The only thing they have in common is size. The recent divergence in the group makes it even less useful.
The USA: a country where everything is free
Trump and the republicans are already considering a fiscal amnesty which would repatriate – with a tax rate of 10% – the 2.5 billion dollars US companies have outside the country.
Central Banks Face A Moral Dilemma With Monetary Normalisation
Of all the arguments I have heard against monetary normalisation, I would definitely highlight the potential destablising effect which it could have on some financial markets. And I am not emphasising this in a positive way: I sincerely believe that delaying a decision which can help reduce uncertainty in the medium and long-term to avoid a negative impact (which I think will be limited) in the short-term is, without any doubt, questionable.
What If The Market Is Being Too Complacent About Trump’s Inflationary Effect ?
The markets are still discounting the inflationary impact of Trump’s measures. Furthermore, they are anticipating the positive effects of his fiscal policy, the best short-term guarantee of which is in economic agents’ shift in expectations. Our criticism of excessive complacency on these issues is well-known, although it’s true that the market doesn’t see it that way.
Janet Yellen does not cave in to market pressure
Janet Yellen intends to hold firm against market pressure as her press conference showed yesterday. The 0.25% rise in federal funds was downgraded to a modest move, wholly anticipated by investors, while hinting at a moderate path in rate hikes over the next couple of years.
Fed’s rate hike a question of credibility
Natixis AM | The Fed decided On Wednesday to increase its main rate by 25 bp. The US central bank had mentioned so many times this hike that it has to do it. But what will happen now?
Economic populism threatens to prevail amongst both the right and the left
Reliable economists coincide in assuring us that if populists like Podemos got into power, it would mean a “a fast and intense” deterioration in GDP. But social inequality, characterised in the developed countries by the empoverishment of the middle class, is already causing alarm bells to ring in the economic world which pays more attention to global trends.
Are You Worried About Inflation? All Eyes On Fed Meeting
J.L.M. Campuzano (Spanish Banking Association) | Many argue that the conditions are not there for an uptick in inflation on a global scale. Well, that’s true: weak world growth, globalisation and a still negative output-gap in many developed countries (and emerging ones). But are we not being carried away to some extent by the disinflation inertia of the last few years? All eyes will be on the US Fed’s decision on interest rates and its forward guidance at this week’s meeting.
Emerging Markets In 2017: Politics Taking Centre Stage
Julius Baer Research | Emerging markets are still in a trading and not in a trending environment. The past was about central banks and monetary policy. 2017 will be about politics. We divide 2017 into two phases. In Q1/Q2 2017 we expect emerging markets to underperform and believe that there is a buying opportunity sometime in Q2 2017.