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latam

World economy 14th December 2015

LatAm anti populists have won a battle, but not the war

The world, mostly Latin America governments lined up with social markets economies and the US, like Mexico, Peru, Colombia or Chile, have welcomed the victories of anti populist forces in Argentina and Venezuela. In a run-off election on November 22, voters in Argentina elected centrist Mauricio Macri to succeed peronist Cristina Fernandez de Kirchner, with 51.4% of the vote. In Venezuela, the opposition won a two-thirds majority of 112 seats in the 167-seat National Assembly, 67% of the seats, despite winning only 56% of the popular vote.

china A shares1

World economy 12th December 2015

China A- Shares: Value trap or growth bubble?

UBS | A – shares have seen choppy trading since November amid Fed rate hike expectations, expansion of European QE, inclusion of the Rmb into the SDR basket, easing of curbs on prop trading at brokers and resumption of IPOs.

fed decision

World economy 11th December 2015

The Fed’s discourse obliges it to raise rates

In a few days the Fed will meet and, inevitably, will raise interest rates. It is inevitable because it would contradict its discourse if this doesn’t happen. In the short-term it is unlikely to present any problems, because the move is already discounted. But there is something worse: there is the risk that the Fed makes a mistake which it later has to rectify, as has happened in other countries. Sweden is the main example.

china industry

World economy 10th December 2015

China Announces Plan To Close “Zombie SOEs”

UBS | We have been saying that rising downward pressure in the economy and pain in the corporate sector will drive faster SOE restructuring and closin g of excess capacities. Today’s State Council meeting confirms our prediction. For the first time, the government has publically given a timetable and specific guidelines on cleaning up “zombie companies” and reducing losses at the SOE sector.

Prat Gay

World economy 9th December 2015

Argentina Designs An Economic Roadmap

BARCLAYS | Argentina’s incoming finance minister, Alfonso Prat-Gay, has made some important statements about short-term economic policies. We think that his comments are steps in the right direction and indicate pragmatism, in that they seek a solution to economic problems while addressing restrictions imposed by social, political, and economic realities.

ECB 1

World economy 9th December 2015

The Communications “Conundrum”

Does central banks’ “communication” matter? Some analysts believe it does. Therefore, Draghi may now have to work to repair his reputation as “Super Mario”.

citigroup

World economy 8th December 2015

The Pivotal Questions For Global Banks In 2016

UBS | With a rise in the Fed funds rate looking imminent, and given last week’s ECB QE extension, ascertaining how diverging interest rate policies could impact bank fundamentals will be key to helping investors identify winners and losers among global banks in 2016.

poverty1

World economy 8th December 2015

How COP21 Will Impact on the SDGs

On November 30, the 21st Conference of Parties (COP21) started in Paris. After almost 20 years of climate talks, it is hoped that the international community will finally agree concerted action to tackle climate change. A good COP21 will mean that the Sustainable Development Goals are taken more seriously.

Renminbi internationalisation

World economy 5th December 2015

China, the SDR And A Less Eurocentric World

Marc Chandler via Caixin | It is official. The yuan will be included in the International Monetary Fund’s special drawing rights (SDR). The 10.4 percent share is a bit more than I expected, but less than the 14 to 16 percent the IMF’s staff intimated a few months ago. This is a significant event, even if there is no short-term market opportunity.

argentine primary elections

World economy 3rd December 2015

Can Argentina’s President-Elect Overcome The Obstacles To Reform?

The election of Mauricio Macri, the candidate for the Cambiemos (Let’s Change) coalition, as president has been welcomed as a potential turning point in Argentina’s financial, political and foreign policy outlooks. The country’s economic performance has been overshadowed by high inflation and isolation from global capital markets, and planned reforms will likely boost its exports and could accelerate investment in areas such as infrastructure and the nascent shale gas sector.