Fulcrum Perspectives

An interactive blog sharing the Fulcrum team's policy updates and analysis.

Francis Kelly Francis Kelly

U.S. Financial Regulatory Week Ahead

February 5 - 9, 2024

The work of the Financial Stability Oversight Council (FSOC) gets a thorough review this coming week as Treasury Secretary Janet Yellen testifies before both the House Financial Services Committee and the Senate Banking Committee.  Secretary Yellen will present the FSOC's annual report.  We should expect a wide range of regulatory issues - particularly the Federal Reserve's proposed bank capital rulemaking as well as the CFPB's recent proposal on overdraft fees to come under intense criticism.

Also, this coming week, the SEC will be considering new regulations as to whether to further define the phrase "as a part of a regular business" as used in the statutory definitions of the terms "dealer" and "government securities dealer." This is all part of SEC Chair Gary Gensler's efforts to reform the Treasury bond trading system.

Speaking of the SEC: In a House Financial Services Committee hearing last week looking at the SEC's proposed changes to how investment advisors should crypto, real estate, and other assets, Representative Andy Barr (R-KY) released letters from both Fed Chair Jay Powell and Acting Comptroller of the Currency Michael Hsu expressing their concerns over the proposal.  Barr had sought their views on the proposal and, in a surprise to many, both Powell and Hsu responded in advance of the hearing, expressing their criticisms (this seems to be a new thing in the Washington regulatory space: Financial regulators criticizing other regulators publicly when they disagree on proposed regulations instead of working it out quietly behind the scenes– recall our note from last week pointing out the sharp public criticism Fed Governors Christopher Waller and Michelle Bowman leveled at Fed Vice Chair Michael Barr's capital requirement rule).  

Powell said the proposed rule "…requires a significant change in custody practices at depository institutions," while Hsu said it "would be a departure from the usual manner in which bank custodians hold clients' cash" while its "liability and indemnification requirements would be another departure from current practice." Clearly, the SEC is headed to a significant revision in the proposal.

Below is a listing of all the issues and events U.S. regulators are engaged in this week, along with relevant think tank and trade association events.   Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

 

House of Representatives

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

 

U.S. Treasury Department

  • Treasury Secretary Janet Yellen will testify before the House Financial Services Committee on February 6 (10:00 a.m.) and the Senate Banking Committee on February 8 (9:00 a.m.) to present the Annual Report of the Financial Stability Council.  See above for links to watch online.

 

Securities and Exchange Commission

 

Commodities Futures Trading Commission

 

FINRA

 

Federal Deposit Insurance Corporation

  • There are no significant meetings or events scheduled at this time.

 

Office of the Comptroller of the Currency

  • February 8, 8:00 a.m. – 5:45 p.m. – The OCC will hold a Symposium on the Tokenization of Real-World Assets and Liabilities at the OCC Headquarters in Washington, D.C.  A full agenda of the event can be found HERE.  Acting Comptroller of the Currency Michael Hsu will give opening remarks.

 

The Consumer Financial Protection Bureau

  • There are no significant meetings or events scheduled at this time.

 

National Credit Union Administration

 

Federal Trade Commission & Department of Justice Antitrust Division

  • There are no significant meetings or events scheduled at this time.

 

Farm Credit Administration

 

Farm Credit System Insurance Corporation

 

World Bank

 

 

Trade Associations & Think Tank Events

Trade Association Events

 

Think Tank Events

  • February 6, 8:30 a.m. – NextGov/FCW hosts Zero Trust Workshop 2024 in Washington, D.C.  Scott Braus, Director of Cybersecurity Operations, Consumer Financial Protection Bureau (CFPB), will speak.

 

  • February 7, 12:30 p.m. – The Economic Club of Washington, D.C., holds a discussion on "the 2024 economic outlook, the regional economy, and the economic indicators the Federal Reserve monitors to guide its decisions on monetary policy." Tom Barkin, President and CEO of the Federal Reserve Bank of Richmond, and Jodie McLean, CEO of EDENS, chair of the board of the Federal Reserve Bank of Richmond, and Economic Club Board member, will speak.

 

Please let us know if you have any questions or would like to be added to our email distribution list.

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Francis Kelly Francis Kelly

Recommended Weekend Reads

February 2 - 4, 2024

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list. 

 

Global Terrorism, Crime, and Economics 

  • “Terrorism in Developing and Advanced Economies: A Historical Look”  Federal Reserve Bank of St. Louis

    Acts of terrorism occur throughout the globe, yet the toll on human lives and economic activity can weigh much heavier in different parts of the world.  For example, 83% of attacks worldwide from 2002 to 2019 occurred in South Asia, the Middle East, North Africa, and sub-Saharan Africa.1 Many nations in these regions are relatively poor and lack state capacity to counter terror threats effectively.2 Terrorist attacks also create an additional challenge to economic development; studies have shown that terrorism can negatively affect the flow of foreign direct investment and bilateral trade. In this blog post, we first show the number of terrorist attacks from 1970 to 20203occurring in advanced economies and in emerging markets and developing economies as defined by the International Monetary Fund. For brevity, we use the term “developing economies” to refer to this latter group. Second, we list the top 25 nations and territories ranked by cumulative number of terrorist attacks in the post-9/11 period (2002-20). Finally, we list the top 25 nations and territories ranked by per capita terrorist attacks, again over the post-9/11 period.


  • “Inside the Crime Rings Trafficking Sand”   Scientific American

    Organized crime is mining sand from rivers and coasts to feed demand worldwide, ruining ecosystems and communities. Every year the world uses up to 50 billion metric tons of sand, according to a United Nations Environment Program report. The only natural resource more widely consumed is water. A 2022 study by researchers at the University of Amsterdam concluded that we are dredging river sand at rates that far outstrip nature's ability to replace it, so much so that the world could run out of construction-grade sand by 2050. The U.N. report confirms that sand mining at current rates is unsustainable. Can it be stopped?

The Americas

  • “Help the Heartland? The Employment and Electoral Effects of the Trump Tariffs in the United States”  Working Paper/National Bureau of Economic Research

    Abstract: We study the economic and political consequences of the 2018-2019 trade war between the United States, China, and other US trade partners at the detailed geographic level, exploiting measures of local exposure to US import tariffs, foreign retaliatory tariffs, and US compensation programs. The trade war has not to date provided economic help to the US heartland: import tariffs on foreign goods neither raised nor lowered US employment in newly-protected sectors; retaliatory tariffs had clear negative employment impacts, primarily in agriculture; and these harms were only partly mitigated by compensatory US agricultural subsidies. Consistent with expressive views of politics, the tariff war appears nevertheless to have been a political success for the governing Republican party. Residents of regions more exposed to import tariffs became less likely to identify as Democrats, more likely to vote to reelect Donald Trump in 2020, and more likely to elect Republicans to Congress. Foreign retaliatory tariffs only modestly weakened that support.

  • “When Journalism Dies”  Sebastian Junger/National Review

    Award-winning journalist, author (“The Perfect Storm”), and Academy Award nominee Sebastian Junger writes a fascinating essay on the state of international reporting and journalism in the US today.

      

Russia

  • “Russia’s Mortgage Bubble”  The Bell

    One of the most significant aberrations in the Russian economy at the moment is an apparent mortgage bubble. According to data published this week, the total mortgage portfolio of Russian banks rose a record 34.5% year-on-year in 2023 (compared to 20.4% rise the year before). There’s no mystery about the reason: state-subsidized lending. As the mortgage boom continues, the Central Bank is lobbying for an end to most preferential mortgages, arguing that low-income taxpayers are subsidizing homes for those rich enough to save a deposit and service a loan. But the war in Ukraine makes this a politically sensitive topic: those most likely to benefit from subsidized mortgages are often in the security forces or the military – groups the Kremlin must keep on its side.

 

European Union

  • “Europe’s Greens Are on the Ropes”  Politico EU

    Farmers’ ire and a right-wing surge are testing the EU’s climate goals. And the Greens that backed them are teetering.  The Greens now face a stark choice as they strategize for their next big electoral test in the June EU elections: compromise to save the best of the Green Deal or stick to their ideals and risk their calls for a greener agenda being sidelined. 


  • “EU-China Relations in 2024”  MERICS China Podcast

    What are the most pressing issues in EU-China relations in 2024? What does Europe need to focus on in managing relations with China? How might China seek to exploit the campaign season, in which Europe will be preoccupied with its own problems? In this podcast, Abigaël Vasselier, Director of Policy & European Affairs/Head of Program Foreign Relations at MERICS, discusses these and other questions with Claudia Wessling, Director of Communications and Publications.


  • “Italy’s G7 presidency can be a breakthrough for the ‘West’ and the ‘Rest”   Atlantic Council

    As it begins its Group of Seven (G7) presidency, Italy has an opportunity to leverage its unique historical and cultural perspective to act as a bridge-builder between the “West” and the “Rest” of the world. Indeed, it must do so because a more inclusive and collaborative approach between these two blocs has become imperative.  The dichotomy between the West and the Rest has come to the fore over the past few years, marked by the return of war in Europe and great power competition—embodied most clearly by the rivalry between China and the United States.

 

Chart of the Week

Iran’s Oil Production has Surged to a 5-Year High

As tensions in the Middle East continue to grow with Iranian-sponsored provocations and attacks, it is worth noting Iran’s oil production – despite US and EU sanctions – has steadily surged.   Will the US and EU move to tighten sanctions on Iranian oil?  And if so, what impact would that have on global oil prices and the economic recoveries in the US and EU?  Most likely, it would cause a surge in oil prices and ultimately reach around to slow economic growth.  But one thing is clear: The question is now on the table in Brussels and Washington, D.C., as to whether tougher sanctions will help strip Tehran of a critical revenue stream.

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Francis Kelly Francis Kelly

Global Challenges Impacting U.S. Agricultural Exports

A Changing Geopolitical Landscape is Proving Challenging to America’s Farmers

I had the great privilege of addressing the Iowa Soybean Association on January 29, 2024, in Des Moines, Iowa. America’s farmers are, in many ways, more keenly focused on - and deeply understanding of - geopolitical risk than just about any other profession. What happens in the Red Sea or in the Panama Canal has a direct impact on their product and delivery - and inflationary pressures here in the US, in significant parts of Asia, and in the EU (see map below):

Below is the full presentation that served, I am proud to say, as the groundwork for a lively and really fun discussion with the attendees. Thank you, Iowa Soybean Association, for having me. I really enjoyed it!

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Francis Kelly Francis Kelly

The Global Week Ahead

January 28 - February 4, 2024

This coming week, the Gaza War will likely dominate geopolitical attention. Senior intelligence officials from Israel, the US, and Egypt, along with the Qatari Prime Minister, will gather to discuss efforts to reach a deal with Hamas on the release of Israeli hostages. On the table is a possible two-month pause in fighting in return for the hostages. 

 CIA Director Bill Burns, Mossad Director David Barnea, Egyptian intelligence chief Abbas Kamel, and Qatari Prime Minister Sheik Mohammed bin Abdulrahman al-Thani will meet in a still-undisclosed location in Europe to negotiate all this and perhaps more: Hamas is also demanding a number of Palestinian prisoners be released as part of the deal, many of them reportedly some of the most dangerous and violent terrorists in prison.  The question markets will ask: If an agreement is reached, will it also create at least a temporary suspension of Houthi attacks on commercial shipping in the Red Sea?  

Also this week, NATO Secretary General Jens Stoltenberg will travel to the US for high-level meetings with senior Biden Administration officials, all four Congressional leaders, give a speech at the conservative think tank, the Heritage Foundation (which has been a critic of continued military aid to Ukraine) all as a part of an effort to unlock the frozen Congressional funding legislation for Ukraine (as well as Israel).

That effort has been tripped up by efforts to find a compromise measure on more significant US border security measures, which, at this point, appear to be dead as House Speaker Michael Johnson (R-LA) sent a letter to colleagues stating what he understood to be the likely points of agreement to small and unworkable. 

Ukraine aid will also be a major issue in the EU this week as there will be a special meeting of the European Council in Brussels to consider a $54 billion financial aid package for the beleaguered country. 

In Latin America this week, two significant events are worth markets watching closely: First, Argentinean President Javier Milei’s massive fiscal reform package will be considered by the Argentinian Congress. Milei is facing enormous push-back from labor unions opposing his plan, with more than 80,000 union members taking to the streets last week in protest. 

The second event is that the US is likely to announce whether they will “snap back” on an agreement (the Barbados Agreement) reached with Venezuela in October 2023 granting a relaxation of US sanctions on the regime in return for allowing free and fair elections. Venezuelan President Nicholás Maduro, while freeing some political opponents from jail, has effectively flaunted the agreement ever since, denying the ability of anyone to run against him in elections, arresting other political opponents, and significantly raising tensions in the region by threatening to invade neighboring Guyana. Reimposing sanctions on Venezuela will likely have a measurable impact on global oil prices. 

Finally, turning back to the US, presidential politics are increasingly going to dominate the focus of markets in the weeks ahead now that the Republican New Hampshire Presidential primary is behind us. All eyes are now turning to South Carolina. Democrats hold their first primary in the Palmetto State this coming Saturday, where President Biden’s victory is assured. Republicans have their primary on February 24th, but there is one Republican primary before it: Nevada on February 8th, where former President Trump is expected to win soundly.  

Looking at the global economic radar screen this week, all eyes will be glued to the Federal Reserve’s Open Market Committee meeting and Fed Chair Jay Powell’s subsequent press conference for the slightest hint of interest rates coming down. The Bank of England is also meeting this week to consider rates.  

Many important economic reports are coming out this week, too.  The US markets will be looking at the US labor market report on Friday and the Conference Board’s consumer confidence index on Tuesday. Additionally, the US Treasury Quarterly Refunding Announcement comes out Wednesday (for a great inside look at who and how that is done, this Wall Street Journal profile is fun and informative: “The Most Important Man in Finance You’ve Never Heard Of”).  

Several CPI prints are released in the EU along with Eurozone and German GDP results. In Asia, China’s official CPI and Caixin CPI reports are released, and in Japan, markets will be watching industrial production and consumer confidence report results.  

Here is what else we are watching around the world this coming week:

Sunday, January 28, 2024

 

Global

  • Nothing significant to report.

 

Americas

Political/Social Events –

  •  Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Asia

Political/Social Events –

  • China’s month-long Lunar New Year travel season begins this weekend.  An estimated 1.8 billion trips by mass transit and 7 billion trips by car are expected.

Economic Reports/Events –

  • Nothing significant to report.

 

Europe

Political/Social Events –

Economic Reports/Events –

  • Nothing significant to report.

 

Middle East

Political/Social Events –

  • Senior US, Israeli, Qatari, and Egyptian officials are expected to meet in Europe(exact location not disclosed) this weekend to discuss ongoing negotiations with Hamas for the release of Israeli hostages. CIA Director William Burns, Mossad Director David Barnea, Egyptian Intelligence Director Abbas Kamel, and Qatari Prime Minister Sheikh Mohammed Al Thani are expected to attend. 

Economic Reports/Events –

  • Nothing significant to report.

 

Africa

Political/Social Events –

Economic Reports/Events –

  • Nothing significant to report.

 

 

Monday, January 29, 2024

Global

  • The UN Security Council is scheduled to hold a briefing on ICC Sudan.

  • At the UN, the World Food Programme (WFP) and the Permanent Mission of Germany to the United Nations are organizing a panel discussion titled Strengthening the Resilience of Agricultural Systems and Food Security in the Sahel. 

 

Americas

Political/Social Events –

  • NATO Secretary General Jens Stoltenberg will travel to the US for meetings with Secretary of State Antony Blinken and the Secretary of Defense Lloyd J. Austin III, as well as U.S. National Security Advisor Jake Sullivan. On January 30, he will meet with the Speaker of the House of Representatives, Mike Johnson, Democratic Leader of the House, Hakeem Jeffries, Republican Leader of the Senate, Mitch McConnell, as well as other Democratic and Republican Representatives and Senators.  Then on January 30, he will deliver a speech at the Heritage Foundation. On the same day, he will also travel to Troy, Alabama, and visit the Missiles and Fire Control Facility of Lockheed Martin. He will wrap up his visit to the US on February 1 when he goes to Tampa, Florida, to visit the headquarters of the US Special Operations Command.

  • Colombia’s latest six-month cease-fire with the Marxist insurgent National Liberation Army group is set to expire.

Economic Reports/Events –

  • US Dallas Fed Manufacturing Index (January)

  • Brazil Gross Debt to GDP (December), Nominal Budget Balance (December), BCB Focus Market Readout

 

Asia

Political/Social Events –

Economic Reports/Events –

  • Vietnam Balance of Trade (January), Industrial Production (January), Inflation (January), Retail Sales (January), Tourist Arrivals (January)

  • Singapore Monetary Policy Statement, Export & Import Prices (December), PPI (December)

  • Thailand New Car Sales (December)

  • Pakistan Central Bank Interest Rate Decision

 

Europe

Political/Social Events –

  • The 15th meeting of the Accession Conference with Montenegro will be held in Brussels.  The intergovernmental conference will provide a forum for political dialogue between the EU member states and Montenegro on the country’s reforms, take stock of the overall accession process, and provide political steer for future work. The focus of the meeting is expected to be on the key reforms that would allow Montenegro to make further progress in its accession process.

  • Georgia's ruling party will hold its first meeting with the parliamentary opposition on implementing the European Commission's requirements to begin EU membership negotiations.

  • The EU General Affairs Council meets in Brussels.  On the agenda is a discussion of the defense of democracy and the annual rule of law dialogue.

Economic Reports/Events –

 

Middle East

Political/Social Events –

Economic Reports/Events –

  • Israel M1 Money Supply (December)

  • Qatar GDP (Q3), Balance of Trade (December)

  • Kuwait M2 Money Supply (December), Private Bank Lending (December)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Zimbabwe Inflation Rate (January)

  

 

Tuesday, January 30, 2024 

Global

 

Americas

Political/Social Events –

  • Argentina's lower house of Congress will vote on President Javier Milei's omnibus reforms.  The massive reform package is facing widespread opposition from unions and Milei’s political opponents. 

  • The US State Department is expected to reveal whether the US will reimpose sanctions on Venezuela for failing to comply with the terms of an agreement that allowed the relaxation of US sanctions on the country in return for free and fair elections – something Venezuelan President Maduro effectively flaunted within days of the agreement, denying opposition candidates the opportunity to run.

  • The EU-U.S. Trade and Technology Council summit will take place at the U.S. State Department in Washington, D.C.   they are expected to discuss discussions around sustainable trade and artificial intelligence, among other issues.

  • US Commerce Secretary Gina Raimondo will join Margrethe Vestager, Executive Vice President of the European Commission for Europe, to discuss US-EU trade and technology policy at the Atlantic Council in Washington, D.C.  

Economic Reports/Events –

  • US Redbook (January 27), S&P/Case Shiller Home Price Index (November), JOLTs Job Openings (December), the Conference Board’s Consumer Confidence (January), Dallas Fed Services Index (January), Dallas Fed Services Revenues Index (January)

  • Brazil IGP-M Inflation (January)

  • Mexico GDP (Q4), Fiscal Balance (December)

  • Chile Unemployment (December)

  • El Salvador Balance of Trade (December)

 

Asia

Political/Social Events –

Economic Reports/Events –

  • Japan Unemployment (December)

  • Australia Retail Sales (December)

  • Philippines PPI (December)

  • Taiwan Consumer Confidence (January)

 

Europe

Political/Social Events –

Economic Reports/Events –

  • ECB Board Member Philip R. Lane gives opening remarks at a conference entitled 'A year with the euro in Croatia' organized by Hrvatska narodna banka in Zagreb, Croatia.

  • ECB Board Member Anneli Tuomine participates in a webinar organized by European Banking Institute on book launch: "Artificial Intelligence and Market Abuse".

  • Eurozone GDP (Q4), Economic Sentiment (January), Consumer Confidence (January), Consumer Inflation Expectations (January), Industrial Sentiment (January), Selling Price Expectations (January), Services Sentiment (January)

  • Germany GDP (Q4)

  • UK BoE Consumer Credit (December), Mortgage Approvals & Lending (December)

  • Ireland GDP (Q4), Wholesale Prices (December)

  • Greece PPI (December)

  • Italy PPI (December)

  • France GDP (Q4), Household Consumption (December)

  • Switzerland Balance of Trade (December), KOF Leading Indicators (January)

  • Spain GDP (Q4), Inflation (January), Business Confidence (January)

  • Hungary Central Bank Interest Rate Decision

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Saudi Arabia Imports/Exports/Balance of Trade (November), M3 Money Supply (December), Private Bank Lending (December)

  • Turkey Economic Confidence Index (January)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Zambia M3 Money Supply (December), Private Sector Credit (December), Budget Balance (December)

 

 

Wednesday, January 31, 2024

Global

  • the Security Council is scheduled to hold a briefing on the 2140 Committee and another briefing on ICC Libya.

  •  The UN Committee on the Exercise of the Inalienable Rights of the Palestinian People will convene the first Committee Meeting of the year. At this meeting, the UN Secretary–General, António Guterres, will preside over the Bureau elections, and the Committee will adopt its Programme of Work for 2024. The Permanent Representative of South Africa and the Director of the UNRWA Representative office in New York are expected to brief.

 

Americas

Political/Social Events –

Economic Reports/Events –

  • US Federal Reserve Open Market Committee Interest Rate Decision and press conference.

  • US MBA Mortgage Market Index (January 28), ADP Employment Change (January), Treasury Refunding Announcement, Chicago PMI (January), EIA Crude Oil Stocks (January 26)

  • Canada GDP (November & December)

  • Brazil Unemployment (December), Central Bank Interest Rate Decision, Net Payrolls (December)

  • Chile Copper Production (December), Industrial Production (December), Manufacturing Production (December), Retail Sales (December), Central Bank Interest Rate Decision

  • Uruguay Balance of Trade (December)

  • Colombia Central Bank Interest Rate Decision, Unemployment (December), Cement Production (December)

 

Asia

Political/Social Events –

  • In Thailand, the Constitutional Court will rule whether opposition lawmaker Pita Limjaroenrat and his Move Forward Party conspired to overthrow Thailand's system of constitutional monarchy through its signature policy of amending laws that criminalize royal insult.

  • Today is Nauru Independence Day, marking when the nation declared independence in 1968.

Economic Reports/Events –

  • China NBS Manufacturing PMI (January), NBS General PMI (January)

  • Bank of Japan Summary of Opinions released, Industrial Production (December), Retail Sales (December), Consumer Confidence (January), Housing Starts (December), Construction Orders (December)

  • India Government Budget Value, Infrastructure Output (December)

  • South Korea Industrial Production (December), Retail Sales (December)

  • Australia Inflation (Q4), Housing Credit (December), CPI (Q4), Private Sector Credit (December)

  • Taiwan GDP (Q4)

  • Hong Kong GDP (Q4)

  • Philippines Full Year GDP (2023), GDP (Q4)

  • Singapore Bank Lending (December), Unemployment (Q4), Business Confidence (Q4)

  • Thailand Industrial Production (December), Current Account (December), Private Consumption (December), Private Investment (December)

  • Sri Lanka Inflation (January)

 

Europe

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • ECB Bank Lending Survey

  • Germany Retail Sales (December), Import Prices (December), Unemployment (January), Inflation (January)

  • France Inflation (January), PPI (December)

  • Italy Unemployment (December), Industrial Production (November)

  • Ireland Inflation (January)

  • Spain Retail Sales (December), Current Account (November)

  • Hungary PPI (December)

  • Switzerland Retail Sales (December), Economic Sentiment Index (January)

  • Poland Full Year GDP (2023)

  • Greece Retail Sales (November)

  • Ukraine Current Account

  • Russia Industrial Production (December), M2 Money Supply (December)

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Saudi Arabia GDP (Q4)

  • Turkey Imports/Exports (December), Tourist Revenues (Q4), Tourist Arrivals (December)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nigeria FX Reserves (January)

  • South Africa Balance of Trade (December)

  • Mozambique Central Bank Interest Rate Decision

 

Thursday, February 1, 2024

Global

 

Americas

Political/Social Events –

  • In Cuba, a significant increase in the price of gasoline goes into effect.  As the Center for Strategic and International Studies reported this past week, Cuba has faced a steep decline in tourism revenue following the Covid-19 pandemic, exacerbated by high global fuel prices caused by the war in Ukraine, which have contributed to years of chronic fuel shortages, resulting in frequent blackouts and long queues at gasoline pumps in what analysts have described as “the worst financial position it has been in since the collapse of the Soviet Union.” Starting in February, the regime announced that gasoline prices would increase by over 500 percent due to the government’s inability to continue sales at current subsidized prices.

Economic Reports/Events –

  • US Challenger Job Cuts (January), Initial Job Cuts (January), S&P Manufacturing PMI (January), ISM Manufacturing PMI (January), Construction Spending (December), ISM Manufacturing New Orders (January), ISM Manufacturing Prices (January), EIA Natural Gas Stocks (January 26)

  • Canada S&P Global Manufacturing PMI (January)

  • Brazil PPI (December), S&P Global Manufacturing PMI (January), Balance of Trade (January)

  • Mexico Business Confidence (January), S&P Global Manufacturing PMI (January)

  • Chile IMACEC Economic Activity (December)

  • Colombia Davivienda Manufacturing PMI (January)

  • Argentina Central Bank Interest Rate Decision, Tax Revenues (January)

 

Asia

Political/Social Events –

  • Taiwan's legislature, which is effectively a hung parliament between three parties, will open its spring session and meet to select the president and vice president of the legislature.  In the elections, the Kuomintang (KMT) won 52 seats, the Democratic Progressive Party (DPP) secured 51, and the Taiwan People’s Party (TPP) won eight.

  • Indian Finance Minister Nirmala Sitharaman is set to present an interim national budget just before the country's general election in April-May.

  • Today is Federal Territory Day in Malaysia, marking the day Kuala Lumpur was transferred from the state of Selangor to the Federal Government.  Financial Markets are closed.

Economic Reports/Events –

  • China Caixin Manufacturing PMI (January)

  • Japan Jibun Bank Manufacturing PMI (January)

  • India HSBC Manufacturing PMI (January)

  • Hong Kong Retail Sales (December)

  • South Kora Imports/Exports/Balance of Trade (January)

  • Australia Judo Bank Manufacturing PMI (January), Building Permits (December), Import & Export Prices (Q4), Private House Approvals (December), CoreLogic Dwelling Prices (January), Commodity Prices (January)

  • Indonesia S&P Global Manufacturing PMI (January), Indonesia Inflation (January), Tourist Arrivals (December)

  • Philippines S&P Global Manufacturing PMI (January)

  • Thailand S&P Global Manufacturing PMI (January)

  • Vietnam S&P Global Manufacturing PMI (January)

  • Pakistan Consumer Confidence (December & January), Balance of Trade (January), Inflation (January), Wholesale Prices (January)

  • Sri Lanka Balance of Trade (December)

  • Kazakhstan Current Account (Q4), Tengri Partners Manufacturing PMI (January), Inflation (January)

 

Europe

Political/Social Events –

Economic Reports/Events –

  • ECB Board Member Philip R. Lane gives remarks at an event organized by Einaudi Institute for Economics and Finance (EIEF) in Rome, Italy.

  • Eurozone HCOB Manufacturing PMI (January), Inflation (January), Unemployment Rate (December), CPI (January)

  • Germany HCOB Manufacturing PMI (January)

  • France HCOB Manufacturing PMI (January)

  • Bank of England Interest Rate Decision and Meeting Minutes, UK Nationwide Housing Prices (January), S&P Global Manufacturing PMI (January), Labor Productivity (Q3)

  • Italy HCOB Manufacturing PMI (January)m Inflation (January)

  • Ireland AIB Manufacturing PMI (January)

  • Poland S&P Global Manufacturing PMI (January)

  • Spain HCOB Manufacturing PMI (January), New Car Sales (January)

  • Greece S&P Global Manufacturing PMI (January), Unemployment (December)

  • Switzerland procure.ch Manufacturing PMI (January)

  • Romania Unemployment (December)

  • Hungary HALPIM Manufacturing PMI (January)

  • Russia S&P Global Manufacturing PMI (January)

  

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Egypt Central Bank Interest Rate Decision, M2 Money Supply (December), Overnight Lending Rights

  • Turkey MPC Meeting Summary, Istanbul Chamber of Industry Manufacturing PMI (January), FX Reserves (January 26)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nigeria Stanbic IBTC Bank Nigeria PMI (January)

  • South Africa ABSA Manufacturing PMI (January), Total New Vehicle Sales (January) 

Friday, February 2, 2024

Global

  • Nothing significant to report.

 

Americas

Political/Social Events –

  • It’s Groundhog Day!  Will Punxsutawney Phil see his shadow, predicting six more weeks of winter?

Economic Reports/Events –

  • US Non-Farm Payrolls (January), Participation Rate (January), Factory Orders (December), Michigan Consumer Sentiment (January), Michigan 5-Year Inflation Expectations (January), Michigan Current Conditions (January), Baker-Hughes Oil Rig Count (February 2), Total Vehicle Sales (January)

  • Brazil IPC-Fipe Inflation (January), Industrial Production (December)

  • Mexico FX Reserves (December)

  • Paraguay Inflation (January)

  • Costa Rica Unemployment (Q4)

Asia

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • India FX Reserves (January 26)

  • South Kora Inflation (January), CPI (January)

  • Australia Home Loans (January), Investment Lending for Homes (December), PPI (Q4)

  • Singapore SIPMM Manufacturing PMI (January)

Europe

Political/Social Events –

  • The EU-ASEAN Ministerial meeting will take place in Brussels. 

  • There will be an informal meeting of EU Foreign Affairs Ministers in Brussels.

  • The German Bundestag is expected to finalize a new budget in the wake of an unexpected ruling from the German Constitutional Court last November, forcing a massive rewrite and brief fiscal crisis for the country.

Economic Reports/Events –

  • ECB Survey of Professional Forecasters

  • France Industrial Production (December), Budget Balance (December), New Car Registrations (January)

  • Spain Unemployment (January), Tourist Arrivals (December)

  • Switzerland Consumer Confidence (Q1)

  • Romania PPI (December)

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Turkey Imports/Exports/ Balance of Trade (January),  Auto Sales (January)

 

Africa:

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

 

Saturday, February 3, 2024

Global

  • Nothing significant to report.

 

Americas

Political/Social Events –

  • The Democratic Party holds its first presidential primary in South Carolina.

Economic Reports/Events –

  • Nothing significant to report.

 

Asia

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Europe

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

 

Sunday, February 4, 2024

Global

  • Nothing significant to report.

 

Americas

Political/Social Events –

  • El Salvador holds presidential and legislative Elections. Current President Nayib Bukele and Vice President Felix Ulloa are expected to be re-elected.

  • Facebook turns 20 years old today.

  • Costa Rica holds municipal elections.

Economic Reports/Events –

  • Nothing significant to report.

 

Asia

Political/Social Events –

  • Today is National Day in Sri Lanka, celebrating the island nation’s independence from Great Britain in 1972.

Economic Reports/Events –

  • Nothing significant to report.

 

Europe

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Africa

Political/Social Events –

  • Today is Angola Independence Day, celebrating when the nation gained independence from Portugal in 1975.

Economic Reports/Events –

  • Nothing significant to report.

 

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Francis Kelly Francis Kelly

Recommended Weekend Reading

January 26 - 28, 2024

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list. 

The Americas

  • “2023: A Year of Mexican Oil to Cuba”  Center for Strategic and International Studies

    Cuba is in a deep energy crisis. A steep decline in tourism revenue following the Covid-19 pandemic, exacerbated by high global fuel prices caused by the war in Ukraine, has contributed to years of chronic fuel shortages, resulting in frequent blackouts and long queues at gasoline pumps in what analysts have described as “the worst financial position it has been in since the collapse of the Soviet Union.” Starting in February, the regime announced that gasoline prices will increase by over 500 percent due to the government’s inability to continue sales at current subsidized prices.  The functioning of the Cuban economy hinges on imported petroleum. In the 1980s, Cuba depended on the USSR to supply 98 percent of its crude oil needs. Following the end of Soviet subsidies, Cuba’s so-called Special Period—a decade of widespread food rationing, mass outward migration, and paralysis of the country’s industrial and agricultural sectors—ended only after Hugo Chávez’s Venezuela agreed to barter its crude oil in exchange for Cuban doctors, teachers, and military advisors in the early 2000s.

 

International Economics

  •   “De-dollarization reshaping central bank reserves in 2024”   OMFIF Research

    De-dollarisation has grabbed headlines as the expanded Brics bloc plans for a common currency, reducing reliance on the dollar. Though a BRICS currency is unlikely to threaten the dollar's dominance soon, it signals geopolitics will increasingly shape reserve management.  Key findings from OMFIF's Global Public Investor report, based on a survey of 75 managers controlling nearly $5tn in reserves, include: 

    • Dollar's share of reserves is expected to gradually fall five percentage points but remain above 50%

    • Renminbi likely to rise from nearly 3% now to 6% of reserves in a decade

    • Sub-Saharan Africa and Asia Pacific central banks shifting from dollar to renminbi

 

  • “How the Fed Should Deal with Forecasting Errors”  Peterson Institute for International Economics

    Like many other central banks around the world, including the Federal Reserve, the Bank of England failed to anticipate the inflation surge of 2021 and 2022. Now Ben S. Bernanke, former chair of the Federal Reserve, has been commissioned by the Bank of England to review the Bank’s “forecasting and related processes during times of significant uncertainty.” The Financial Times reports [paywall] that, unsurprisingly, the European Central Bank and the Fed have also undertaken similar, albeit less formal, retrospective looks at what went wrong and how they might do better. The Bank of England’s move to commission a formal report prompts an interesting thought experiment: If the Federal Reserve were to request a similar outside review of its forecasting operations, what should it say?

 

Indo-Pacific

 

The Middle East, Israel, and the Gaza War

  • “US Aid to Israel in Four Charts”  Council on Foreign Relations

    Israel, the United States closely ally in the Middle East, has been the largest cumulative recipient of U.S. foreign aid since its founding, receiving about $300 billion (adjusted for inflation) in total economic and military assistance. The United States has also provided large foreign aid packages to other Middle Eastern countries, particularly Egypt and Iraq, but Israel stands apart.

 

  • “Israel does not want a war with Iran”  Al-Monitor Pro Podcast

    The assassination of Hamas' number two man in Beirut has deepened concerns that the conflict in Gaza will engulf neighboring Lebanon. However, Esther Solomon, the editor-in-chief of Haaretz English, dismisses the idea that Israel wants to provoke a war with Iran that would drag on the United States.

  • “Were the Saudis Right About the Houthis After All?   The Atlantic

    The Houthis are a potent Iranian proxy group, and their slogan, adapted from Iranian revolutionary propaganda, is being made manifest in action. They’ve attacked Red Sea shipping lanes more than 30 times since October 17, under the implausible pretext of aiding Hamas and protesting Israeli military actions in Gaza. Washington long-held, against Saudi protestations, that the Houthis didn’t or couldn’t possibly pose a significant threat beyond Yemen. Now the United States is leading a large coalition of countries determined to restore maritime security against Houthi piracy in the Red Sea. Surely those behind Washington’s efforts are asking themselves: Were the Saudis right about the Houthis all along?

  

Energy

  • “Winter Reliability, A Growing Not Passing Problem”  The Power Line

    The nation’s electric power grids have emerged largely unscathed from a continent-spanning snap of cold weather and winter storms this winter. This outcome stands in stark contrast to previous bulk power system failures, with grid operators resorting to load shedding in December 2021 during Winter Storm Uri and in February 2022 during Winter Storm Elliot. Though this round avoided system failures, narrow margins of error were everywhere. Across the country, winter reliability scares have now emerged as an annual tradition, one that bodes ill for the nation’s energy systems and the economic engine they power.

  

Map of the Week

U.S. Bases in the Middle East

As tensions grow in the Middle East – the Houthi attacks on commercial shipping in the Red Sea, Iranian proxy militias attacking U.S. troops in Syria and Iraq – we have gotten a number of questions about the size of the U.S. military presence in the region.  The American Security Project offers an excellent map detailing where known U.S. military facilities are located in the region.  As of 2022, there are more than 170,000 U.S. troops stationed outside the United States, and as of June 2023, there are more than 30,000 US troops stationed in the Middle East alone.

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Francis Kelly Francis Kelly

U.S. Financial Regulatory Week Ahead

January 28 - February 2, 2024

It is going to be another busy week next week in the financial regulatory space in Washington, D.C., coming off a week shortened by snow and cold (it is now 75 degrees outside as I write this note – it was 7 degrees five days ago), the most important event in the coming week is likely to be Acting Comptroller of the Currency Michael Hsu's speech at the University of Michigan on Monday where he will discuss banker merger policy. 

Bank merger policy has been a hot topic among bank regulators for months, notably since the Department of Justice's Assistant Attorney General for Antitrust Jonathan Kanter effectively announced the Antitrust Division would subsequently engage in bank merger reviews.  Usually, the Antitrust Division would go along with whatever the Federal Reserve decided, but no more.  And with the Antitrust Division's decision to engage effectively brings the Federal Trade Commission (FTC) into the process, too (and one of the main reasons we include activities at the Antitrust Division and FTC in our weekly Financial Regulatory Week Ahead).

Also of note this coming week, the Senate Banking Committee will hold two important hearings, one on fraud in the banking system and the other examining the role of artificial intelligence and housing. 

Over on the House side, The House Financial Services Financial Institutions and Monetary Policy Subcommittee will hold a hearing entitled "Rules Without Analysis: Federal Banking Proposals Under the Biden Administration."  This will likely be another blast at the Fed's proposed bank capital rules.

Finally, Treasury Secretary Janet Yellen will testify before the House Financial Services Committee and the Senate Banking Committee in two weeks (February 6 & 8) to present the Financial Stability Oversight Council's annual report to Congress.  You can expect some fireworks at both hearings as some members are likely to press Yellen hard on bank merger policy (making OCC Director Hsu's comments this week particularly timely), the Consumer Financial Protection Bureau's just announced proposed rule on junk fees on bank accounts (which is already getting hit with hard criticism from the banking sector), and the proposed capital rules we just alluded to above.  

Below is a listing of all the issues and events U.S. regulators are engaged in this week, along with relevant think tank and trade association events.  Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

 

House of Representatives

 

US Regulatory Meetings & Events

 

Federal Reserve Board and Federal Reserve Banks

  • January 30 & 31:  The Federal Reserve’s Open Market Committee meets to discuss the economy and interest rates.  Fed Chair Jay Powell will hold a press conference on January 31 following the conclusion of the meetings at 2:30 p.m.

 

U.S. Treasury Department

  • January 30, 9:00 a.m. – The Treasury Department holds a closed meeting of the Debt Management Advisory Committee for discussions and debates of the issues presented to the committee by the Secretary of the Treasury and the making of recommendations of the Committee to the Secretary.

  • February 1, 2:00 p.m. – The Treasury Department holds a meeting of the Advisory Committee on Risk-Sharing Mechanisms to address topics related to the role of nongovernmental mechanisms in supporting the terrorism risk insurance market.

 

Office of the Comptroller of the Currency

  

Securities and Exchange Commission

 

Commodities Futures Trading Commission

 

Federal Deposit Insurance Corporation

  • No significant events are scheduled or have been announced at this time.

 

The Consumer Financial Protection Bureau

  • No significant events are scheduled or have been announced at this time.

 

National Credit Union Administration

  • No significant events are scheduled or have been announced at this time.

 

Federal Trade Commission & Department of Justice Antitrust Division

  • February 2, 8:30 – 9:00 a.m. – FTC Commissioner Alvaro Bedoya gives a keynote speech at the 13th Annual Law Leaders Global Global Conference in Miami, Florida.  Also speaking at the event will be Michael Kades, Deputy Assistant Attorney General for the Antitrust Division, U.S. Department of Justice, and Sarah Cardell, Chief Executive of the UK’s Competition and Markets Authority.

 

Farm Credit Administration

  • No significant events are scheduled or have been announced at this time.

 

 

Trade Associations & Think Tank Events

 

Trade Association Events

 

 

Think Tank Events

Please let us know if you have any questions or would like to be added to our email distribution list.

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Francis Kelly Francis Kelly

U.S. Financial Regulatory Week Ahead

It is a snowy and frigid beginning of the week here in Washington. There is only one major regulatory meeting this week: The SEC is looking to move forward with new regulations of SPACs and is holding an open meeting on Wednesday to consider several new proposals. 

It was not just the Nation's capital hit by a frigid front this past week: The Federal Reserve's Bank Capital proposal was hit with a frosty blast of opposition from several important regulatory players. As we reported in last week's Reg Week Ahead, Federal Reserve Board Governor Michelle Bowman continues to take a tough stance on the proposal at the U.S. Chamber of Commerce's Center for Capital Markets "Protect Main Street" event. Bowman was joined this past Tuesday by Federal Reserve Governor Christopher Waller, who, in a speech at the Brookings Institution, said of the proposal, "It's got to have a major overhaul, in my view, to get a reasonable product and possibly even taking it back and starting over." He also said of the portion dealing with operational risk, "The way it's calculated made absolutely no sense to me whatsoever." 

At this point, Federal Reserve Board Vice Chair Michael Barr's efforts to push forward on the proposal has run into a turbo-charged buzzsaw of opposition from all the major bank trade associations, along with the U.S. Chamber of Commerce, the Mortgage Bankers Association, the National Association of Homebuilders, and the National Association of And the Bank Policy Institute has hired former Secretary of Labor Eugene Scalia to (most assuredly) bring a federal lawsuit against the Fed if they push forward with the proposal as current written.  Scalia has a long and highly successful track record of suing financial regulators over a variety of controversial proposals. 

Another highly controversial regulatory proposal emerged this past week: The CFPB announced its intention to move forward with new regulations around overcharge fees.  The proposal immediately was hit with intense criticism from most of the banking sector and several influential members of Congress.  We expect this to be yet another set of regulatory proposals that end up being challenged in Federal Court soon. 

Also, this past week, U.S. Treasury staff traveled to China for a working group session on financial stability and capital markets.   No breakthroughs were reached. Still, the read-out was generally positive and is all part of the reproachment between Beijing and Washington set in motion as a result of President Biden's meeting with Chinese President Xi in San Francisco this past November. 

Finally, we would note a timely event being hosted by the Peterson Institute for International Economics this week: A virtual discussion on "Next steps for the Basel Committee on Banking Supervision" that will feature Neil Esho, Secretary General, Basel Committee on Banking Supervision and  Isabelle Vaillant, Director of Prudential Regulation and Supervisory Policy, European Banking Authority. This should be an informative event, considering the growing pushback on the Fed's capital rules.

Below is a listing of all the issues and events U.S. regulators are engaged in this week, along with relevant think tank and trade association events. Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

 

House of Representatives

  • The House is out of session this week.

 

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

  • No public events are scheduled as the Federal Reserve is in its “Blackout Period” in advance of the January 31 Federal Open Market Committee meeting on interest rates.

 

U.S. Treasury Department

  • There are no announced scheduled events of note.

 

Securities and Exchange Commission

 

Commodities Futures Trading Commission

  • CANCELLED - January 22, 9:00 a.m. – The CFTC had announced (and canceled on Saturday) an open meeting to consider requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions.

  • January 26, 12:00 p.m. – CFTC Summer K. Mersinger will participate on a panel, Digital Assets: What’s in Store for the Future, at the ABA Business Law Section’s Derivatives and Futures Law Committee Winter Meeting in Naples, Florida.

     

  • January 26, 1:15 p.m. – CFTC Chairman Rostin Behnam will keynote at the ABA Business Law Section Committee on Derivatives and Futures Law Winter Meetings in Naples, Florida.

 

Federal Deposit Insurance Corporation

  • There are no announced scheduled events of note.

 

Office of the Comptroller of the Currency

  • There are no announced scheduled events of note.

 

The Consumer Financial Protection Bureau

  • There are no announced scheduled events of note.

 

National Credit Union Administration

  • There are no announced scheduled events of note.

 

Federal Trade Commission & Department of Justice Antitrust Division

  • January 24, 3:00 p.m. – The FTC will hold a Closed Commission meeting.

  • January 25, 12:00 p.m. – 4:30 p.m. – The FTC is holding a Tech Summit in Washington, D.C. The Summit events goal is “to facilitate a dialogue amid a dynamic landscape.”  You can see the agenda and list of speakers HERE.

 

Farm Credit Administration

  • There are no announced scheduled events of note.

 

Trade Associations & Think Tank Events

Trade Association Events

Think Tank Events

  

Please let us know if you have any questions or would like to be added to our email distribution list.

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Francis Kelly Francis Kelly

The Global Week Ahead

January 21 - 28, 2024

Greetings from a frigid, snowy Washington, DC!  Central bank interest rate decisions will dominate the news in the coming week as the Bank of Japan, the European Central Bank, and the Bank of Canada all meet this coming week (with the Federal Reserve meeting the following week on January 30-31).   

For now, geopolitical events this week are at a minimum, with perhaps the most significant global event being India's 75th Republic Day, celebrating the nation's constitution and independence. Foreign leaders, led by French President Emmanuel Macron, will arrive to help celebrate and meet with Prime Minister Narendra Modi. The Macron and Modi meeting is particularly important for Macron, as he is seeking to sign sizeable defense and energy agreements with India.

All eyes will be on New Hampshire in the US as the state holds the Republican Presidential Primary. While it is only the first primary after last week's Iowa caucus, it might be the last Republican primary for former South Carolina Governor Nikki Hailey. With the surprise withdrawal from Florida Governor Ron DeSantis' presidential campaign (and his endorsement of former President Donald Trump), Haley faces a do-or-die moment in the race. 

Looking at Europe, we will be watching this week as the European Commission debate and likely approve the European Economic Security Package (EESP).  Notably, the package will likely include new trade and investment restrictions aimed at China while seeking to bolster the economic national security of the EU. The EESP is closely watched in the US Congress as similar restrictive legislation is being considered this year.

Also in Europe this week, NATO begins its biggest training exercise, Steadfast Defender 2024, since the end of the Cold War.   More than 90,000 NATO member soldiers will participate in the event that lasts until late May.

Back to the global economic outlook this week: Beyond the big central bank meetings, markets will watch several US data releases, particularly Q4 GDP figures and the PCE print.  Germany’s always influential Ifo Survey comes out Thursday along with key consumer confidence gauges in the UK, France, and Germany.   

Here is what else we are watching around the world this coming week

Sunday, January 21, 2024

Global

Americas

Political/Social Events –

Economic Reports/Events –

  • Nothing significant to report.

 

Asia

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Europe

Political/Social Events –

Economic Reports/Events –

  • Nothing significant to report.

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Monday, January 22, 2024

Global

  • The UN Security Council is scheduled to hold a meeting on threats to international peace and security.

 

Americas

Political/Social Events –

Economic Reports/Events –

  • US CB Leading Index (December)

  • Brazil BCB Focus Market Readout

  • Costa Rica Balance of Trade (December)

  • Colombia Imports/Exports/Balance of Trade (November)

 

Asia

Political/Social Events –

Economic Reports/Events –

  • China Loan Prime Rate 1Y, Loan Rate 5Y, M2 Money Supply (December)

  • Taiwan Export Orders (December), Unemployment Rate (December)

  • Hong Kong Consumer Price Index (December), Inflation (December)

  • Sri Lanka Central Bank Interest Rate Decision

 

Europe

Political/Social Events –

Economic Reports/Events –

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Israel Manufacturing Production (November)

  • Turkey Central Government Debt (December)

  • Lebanon Inflation (December)

  • Qatar GDP (Q3), M2 Money Supply (December), Total Credit Growth (December)

  • Kuwait Inflation (December)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Tuesday, January 23, 2024

Global

  • The UN Security Council is scheduled to hold an open debate on the Middle East. UN Secretary-General António Guterres is expected to deliver remarks.  

Americas

Political/Social Events –

  • The New Hampshire Republican Presidential Primary is held today, with the town of Dixville Notch being the first town to report results.

  • The 96th Academy Award nominations are announced.  The award ceremony will be held on March 10, which gives us all enough time to see all those movies they are going to nominate that none of us have ever heard of before.

Economic Reports/Events –

  • US Redbook (January 20), Richmond Fed Manufacturing Index (January), Richmond Fed Services Index (January), API Crude Oil Stock Change (January 19)

  • Canada New Housing Price Index (December)

  • Argentina Economic Activity (November)

 

Asia

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Bank of Japan Interest Rate Decision and Quarterly Outlook Report

  • South Korea PPI (December)

  • Taiwan Industrial Production (December), Retail Sales (December)

  • Australia NAB Business Confidence (December)

  • Singapore Inflation (December), CPI (December), Inflation (December)

 

Europe

Political/Social Events –

Economic Reports/Events –

  • Eurozone Consumer Confidence (January)

  • UK Public Sector Net Borrowing (December)

  • Hungary Gross Wage (November)

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Turkey Consumer Confidence (January)

 

Africa

Political/Social Events –

  • Joseph Boakai will be sworn in as President of Liberia.

Economic Reports/Events –

  • South Africa Leading Business Cycle Indicator (November) 

 

Wednesday, January 24, 2024

Global

 

Americas

Political/Social Events –

Economic Reports/Events –

  • US Global Manufacturing & Services & Composite PMIs (January), MBA Mortgage Market Index (January 19), EIA Crude Oil Stocks Change (January 19)

  • Bank of Canada Interest Rate Decision and Monetary Policy Report

  • Brazil Federal Tax Revenues (December)

  • Mexico Economic Activity (November), Mid-month Inflation (January)

  • Argentina Unemployment (December), Retail Sales (November)

 

Asia

Political/Social Events –

Economic Reports/Events –

  • Japan Imports/Exports/Balance of Trade (December), Jibun Bank Manufacturing & Services & Composite PMIs (January)

  • India M2 Money Supply (January 8)

  • South Korea Consumer Confidence (January)

  • Taiwan fM2 Money Supply (December)

  • Australia Judo Bank Manufacturing & Services & Composite PMIs (January), Westpac Leading Index (December)

  • Thailand Imports/Exports/Balance of Trade (December), New Car Sales (December)

 

Europe

Political/Social Events –

  • Russia invaded Ukraine 700 days ago.

  • There will be an informal meeting through January 26 of EU Justice and Home Affairs Ministers in Brussels. 

  • Romania celebrates Unification Day, marking the day in 1859 when Moldavia and Wallachia came together to form the Union of the Romanian Principalities.

Economic Reports/Events –

  • Eurozone HCOB Manufacturing & Services & Composite PMIs (January)

  • Germany HCOB Manufacturing & Services & Composite PMIs (January)

  • France HCOB Manufacturing & Services & Composite PMIs (January)

  • UK S&P Global Manufacturing & Services & Composite PMIs (January), CBI Business Optimism (November)

  • Ireland Residential Property Prices (November)

  • Poland Unemployment Rate (December)

  • Russia PPI (December)

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Jordan Industrial Production (November)

 

Africa

Political/Social Events –

  • Today is UNESCO World Day for African and Afrodescendant Culture.

Economic Reports/Events –

  • South Africa Inflation (December)  

 

Thursday, January 25, 2024

Global

  • The UN Security Council is scheduled to hold a briefing, followed by consultations, on Haiti. 

 

Americas

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • US GDP (Q4), Durable Goods Orders (December), Chicago Fed National Activity Index (December), Durable Goods Orders (December), Goods Trade Balance (December), Initial Jobless Claims (January 20), Retail Inventories (December), Wholesale Inventories (December), Real Consumer Spending (Q4), New Home Sales (December) EIA Natural Gas Stocks Change (January 19), Kansas Fed composite Index (January), Kansas Manufacturing Index (January), Building Permits (December)

  • Canada CFIB Business Barometer (January), Average Weekly Earnings (November), Manufacturing Sales (December)

  • Mexico Unemployment Rate (December)

  • Brazil FGV Consumer Confidence (January), Current Account (December), FDI (December)

  • Paraguay PPI (December)

 

Asia

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • South Korea Business Confidence (January), GDP (Q4)

  • Hong Kong Imports/Exports/Balance of Trade (December)

  • Australia Reserve Bank of Australia Bulletin

 

Europe

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • European Central Bank  (ECB) Interest Rate Decision and Press Conference

  • ECB President Christine Lagarde will give remarks on the occasion of International Holocaust Remembrance Day in Frankfurt, Germany

  • Bank of England Director for Banking, Payments, and Innovation Victoria Cleland speaks at the City & Financial Global Payments Regulation and Innovation Summit in London.

  • Germany Ifo Business Climate (January), Ifo Current Conditions (January)

  • France Business Confidence (January), Business Climate Indicator (January), Unemployment Benefit Claims (December)

  • UK Car Production (December), CBI Distributive Trades (January)

  • Spain PPI (December)

  • Ukraine Central Bank Interest Rate Decision

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Turkey Business Confidence (January), Capacity Utilization (January), Central Bank Interest Rate Decision, FX Reserves (January 19)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • South Africa PPI (December), Central Bank Interest Rate Decision

 

Friday, January 26, 2024

Global

  • Nothing significant to report.

 

Americas

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • US PCE Price Index (December), Personal Income (December), Pending Home Sales (December), Baker Hughes Oil Rig Count (January 26)

  • Canada Wholesale Sales (December), Budget Balance (November)

  • Brazil Bank Lending (December), IPCA mid-month CPI (January)

  • Mexico Balance of Trade (December)

  • El Salvador Balance of Trade (December)

  • Argentina Consumer Confidence (January)

 

Asia

Political/Social Events –

  • Japan’s Diet (parliament) convenes.  They are expected to focus on a growing political fundraising scandal that has engulfed Prime Minister Fumio Kishida and the Liberal Democratic Party.

  • Today is the 75th Republic Day in India, celebrating the day the country’s constitution was formed.  French President Emmanuel Macron visits India and meets Indian Prime Minister Narendra Modi. Financial markets in India are closed for the holiday.

  • Today is Australia Day, celebrating the country’s settlement in 1788.

  • Samsung Electronics Chairman Lee Jae-yong will learn his fate in a Seoul, South Korean court over charges of accounting fraud and stock manipulation. He faces five years in prison if convicted by the Court.

Economic Reports/Events –

  • Japan Bank of Japan Monetary Policy Meeting Minutes, CPI (January), Coincident Index (November), Leading Economic Index (November)

  • India Bank Lending (January 12), Bank Loan Growth (January 12), FX Reserves (January 19)

  • Singapore URA Property Index (Q4), Industrial Production (December)

  • Philippines Imports/Exports/Balance of Trade (December)

 

Europe

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Eurozone Loans to Companies (December), Loans to Households (December), M3 Money Supply (December)

  • Germany GfK Consumer Confidence (February)

  • France Consumer Confidence (January)

  • UK Gfk Consumer Confidence (January)

  • Ireland Consumer Confidence (January)

  • Spain Unemployment (Q4)

  • Hungary Unemployment (December)

  • Greece Total Credit (December)

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Israel Composite Economic Index (December)

 

Africa:

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

 

Saturday, January 27, 2024

Global

  • Today is International Holocaust Remembrance Day.

 

Americas

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Asia

Political/Social Events –

Economic Reports/Events –

  • China Industrial Profits (December)

 

Europe

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Nothing significant to report.

 

Middle East

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Jordan PPI (November)

 

Africa

Political/Social Events –

  • Nothing significant to report.

Economic Reports/Events –

  • Zimbabwe Inflation (January)

  

Sunday, January 28, 2024

 Global

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Americas

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Asia

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Europe

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Middle East

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Francis Kelly Francis Kelly

Recommended Weekend Reads

January 19 - 21, 2024

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and that you have a relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list. 

China/Taiwan Tensions

  • “Why China Would Struggle to Invade Taiwan”  Council on Foreign Relations

    This interactive report makes the case that while China’s ambition to gain control of Taiwan is clear, doing so through force would prove to be enormously difficult and costly.  The maps in the report explaining the tough coastline and limited deep water ports alone are worth the read.

 

Ukraine

 

Latin America

  • “Plunging fertility rates are creating problems for Latin America”  The Economist

    Latin America’s fertility rate fell below the 2.1 births per woman required to maintain a stable population in 2016; the region is home to some of the fastest-falling fertility rates in the world. Together with rising life expectancy and high levels of emigration, mostly of working-age people, this is creating a problem for Latin America: the region is getting old very quickly, and this will leave societies struggling to afford pensions and healthcare.

 

Energy

  • “Geopolitics – Not Just Summits – Will Shape the Transition to Clean Energy”  Foreign Affairs

    In late 2023, a consensus was reached at the UN on reducing greenhouse gas emissions at COP28, held in Dubai.  While the deal was hailed for calling for a transition away from fossil fuels. The deal broadly holds some promise for the transition away from fossil fuels—if not necessarily in the ways advertised. A closer look at the language of the official agreement suggests that some of what was agreed to is less significant than meets the eye. Much of the real work needed to advance the energy transition falls outside the realm of the UN climate negotiating mechanism.  The reality is, according to the authors, a fracturing geopolitical landscape—as much as the growth in climate finance or even advancements in climate technology—will determine just how quickly (or how slowly) the transition to net-zero emissions proceeds.

 

Global Finance & Trade

  • “Geopolitics and the geometry of global trade”   McKinsey Global Institute

    Global trade patterns are reconfiguring. More shifts are likely, and businesses need to be aware of the potential trade-offs of different paths ahead. In this new study, the McKinsey Institute argues five points: 1) Trade in concentrated products binds geopolitically distant economies, 2) Trade reconfiguration is underway, 3) Increased investment into a range of developing economies suggests further trade reconfiguration in coming years, 4) The future of global trade will involve trade-offs—reducing geopolitical distance comes with increasing trade concentration, and vice versa, and 5) Business leaders need to position their organizations for uncertainty. 

 

  • “Jobs, National Security, and the Future of Trade”  Bain Consulting

    As the global economy adjusts to persistent economic and geopolitical pressures and disruptions, the familiar routes that define the world trade map are being redrawn, and trade blocs are playing a greater role. In addition, overall global trade is growing at a slower rate than the world economy, a fundamental shift away from the trend of trade-led globalism that has been prevalent since the end of the Cold War. (See “BCG’s Global Trade Model Methodology.”) World trade in goods is forecast to grow at 2.8% per year, on average, through 2032, compared with an estimated 3.1% growth rate for global GDP in the same period, according to a new BCG analysis.

  • “Why Debt Relief Matters to the Wealthy West” Carnegie Endowment for International Peace

    As many low- and middle-income countries (LMICs) grapple with a sharp rise in payments on their sovereign debt in the wake of the COVID-19 pandemic and the war in Ukraine, leaders across the world are calling for urgent debt restructuring and reforms to the development financing system. Their calls are often framed in humanitarian and ethical terms. These ethical arguments are compelling. However, reducing the burden of loan servicing and expanding development financing for LMICs are not just ethical responsibilities for wealthy Western nations—they are also strategic imperatives. The impacts of debt distress are not confined to the borders of indebted nations. High debt servicing costs increase poverty and fragility in developing countries, contributing to political instability. They also reduce those countries’ capacity to combat climate change, the effects of which are felt globally, including in the form of mass migration to Europe and North America.

 

  • “Why global commerce is now in the crossfire” Good Authority

    Modern globalization, dependent on bulk shipping via open seas, is under fire – the real live kind. Most recently, the spillover of the Israel-Hamas conflict has emboldened Houthi rebels from Yemen to attack shipping in the Red Sea. Shipping companies are coping with major new costs as insuring their vessels in dangerous waters becomes more and more difficult.  While the Red Sea developments – and their potential to escalate – are big news, it’s not the first time that territorial or geopolitical conflicts have spilled into the seas. We are watching in real-time as other major powers and their proxies challenge the West’s dominance in sea power – threatening the maritime commerce that makes the global economy run. And what’s happening today won’t be the last time we see this type of threat.

Map of the Week

Russia’s War is Increasingly Spilling Over Onto NATO Soil

As the war in Ukraine continues, Russia’s aerial attacks (missiles, drones, and rockets) are increasingly hitting outside of Ukraine’s border and landing in Romania, Bulgaria, and Turkey – all NATO members.  All of these incidents are not only violations of the national sovereignty of the respective country but a violation of NATO’s mandate – meaning, technically, NATO could invoke Article 5 (the principle that an attack on one member is an attack on all members) and move to defend these member states from Russian attack. 

With the extraordinary warning from German Defense Minister Boris Pistorius this week that Germany believes Russia could attack the NATO military alliance in the next five to eight years, these “accidents” take on new and much more grave significance.

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