Risk assets especially global equity and oil have been rallying of late and Vix has dropped. This piece looks at what has driven this optimism and relief rally, whether its sustainable and where some of the weak credit links remain. What’s driven this optimism? The best explanation is that signs of peaking or decline in… Continue reading Market Exuberance: Thoughts on EM Credit, Oil and Consolidation
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EM Outlook: Latam Continues to Lag EM Peers
Note: Some of the thoughts expressed in this piece can be found in my November 26 interview with Sri Jegarajah and Nancy Hungerford of CNBC Asia Squawk Box. Global recession risks have abated, along with our forecasts, but underlying growth momentum is far from strong. This sluggish growth includes the engines of global growth in… Continue reading EM Outlook: Latam Continues to Lag EM Peers
Venezuela: Delineating Some “Complications” Ahead
At last count, over 48 countries have recognized the role of Acting President Juan Guaido of Venezuela, adding further pressure to the flailing regime of President Nicolas Maduro. U.S. sanctions further amplify Venezuela’s loss of market access, for key energy inputs, energy exports and credit for other goods. This piece surveys some of the economic… Continue reading Venezuela: Delineating Some “Complications” Ahead
Some Thoughts on the Russian Sale of U.S. Treasurys
Recent Russian reports provide more color on Russian official sector's move out of the the USD in Q2 of last year. The big focus of the CBR reserves composition report (see thread here) was the move into CNY assets, making Russia is now one of the largest holders of offshore CNY reserve assets. Despite the speeding up… Continue reading Some Thoughts on the Russian Sale of U.S. Treasurys
Iran Deal Response: More Unanswered Questions
Last week, I wrote about some of the key questions surrounding the U.S. withdrawal or rather violation of the JCPOA which focused on the responses of Iran (production, discounting, regional policy), Europe (blocking measures), and Asian buyers of Iranian goods. Since then the focus has been on the European counter response to the U.S. decision,… Continue reading Iran Deal Response: More Unanswered Questions
Iran Sanctions: Unanswered Questions
The U.S. has exited the Iran deal/become non-compliant and announced a timeline to reimpose the sanctions that had been suspended in 2015, as many people feared. Some key questions have been answered including the phase-in period, start of discussions with suppliers, but many key ones remain unanswered. In this post, I’ll take a look at… Continue reading Iran Sanctions: Unanswered Questions
Iran’s economy: FX, Energy and Domestic Policy Choices
Early last week I wrote about my concern that the risks Iran deal were not on the radar of many global investors and policy makers, one of the surprises from my last DC trip. I needn’t have worried – its now top of the agenda, or at least sharing it with China trade, Nafta and… Continue reading Iran’s economy: FX, Energy and Domestic Policy Choices
Spring Meetings Takeaways: Robust Outlook Clouded by Trade and Sanctions Worries
The mood at last week’s Spring meetings of the IMF and World Bank was quite upbeat, as anticipated (see my preview here) though there were considerable concerns that near-term strength, exacerbated by U.S. fiscal stimulus and still supportive global monetary stimulus might be masking medium-term vulnerabilities. Many major economies are growing above potential, and are… Continue reading Spring Meetings Takeaways: Robust Outlook Clouded by Trade and Sanctions Worries
MBS World Tour: Saudi Arabia’s Looming Tradeoffs
With Saudi Arabia’s Crown Prince Mohammed bin Salman in Washington at the start of his long U.S. tour, there have been no shortage of good analyses written about what’s at stake and the motivations for the trip and Saudi social and economic reform – my favorites include those by Karen Young and Alastair Newton, as… Continue reading MBS World Tour: Saudi Arabia’s Looming Tradeoffs
What I’m Watching: Signposts and Theme Update
The recent market selloff with its multiple linked triggers (inflation, fiscal expansion, past FX adjustment) and amplifiers (program trading, volatility funds and instruments, pricey valuations and desire to take profits in tax-mitigating way), seems a good time to take stock of the drivers of the macro and market environment going forward, to update you all… Continue reading What I’m Watching: Signposts and Theme Update
