Fulcrum Perspectives

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

Francis Kelly 7/14/24 Francis Kelly 7/14/24

The Global Week Ahead

July 7 - 14, 2024

Four major geopolitical events unfold this coming week, which we believe will be of significant focus and interest to global markets.

First, the 75th NATO Summit in Washington, D.C., takes place this week. The ongoing debate over President Biden's re-election bid adds a layer of complexity to the summit, where the leaders of the NATO member states will convene to deliberate on crucial issues, particularly the strategy for supporting Ukraine in the future. The potential inclusion of Ukraine in NATO will be a pivotal point of discussion, underscoring the summit's significance.

In addition, several Indo-Pacific leaders will be joining the meeting as NATO is expected to outline new plans on how to work more closely with Australia, Japan, and South Korea – something which is not playing well with China, Russia, or North Korea.

The second significant event his week is Indian Prime Minister Narendra Modi traveling to Moscow to participate in a summit with Russian President Vladimir Putin. This is Modi's first bilateral visit since being re-elected to a third term as India's Prime Minister. Traditionally, Indian Prime Ministers make their first visits to one of India's neighbors. However, Modi, who recently skipped the 2024 Shanghai Cooperation Organization meeting Kazakhstan and India-China relations remain tense, is looking to balance China's growing relationship with Russia. The two leaders are expected to discuss expanding economic ties and purchasing Russian military hardware.

The third major event this week is the second round of French parliamentary elections. Following last week's near outright majority results for the far-right National Rally Party headed by Marine Le Pen, French far-left parties have been working with French President Emmanual Macron's centrist alliance to find a way to ensure Le Pen does not get that outright majority via the second round of voting – and, according to pollsters, it looks like they may have succeeded.

The fourth major event is what President Biden will do as a growing chorus of Democratic members of Congress and other Democratic leaders call for him to stand down from his re-election bid against former President Biden. As of this writing, Biden is insistent he will not withdraw because of physical and cognitive issues. However, the pressure seems to be mounting by the hour and the day, and most Washington observers believe it is highly likely he will have to withdraw, perhaps immediately after the NATO Summit.

Looking to the global economic radar screen this week, markets will be watching closely as Federal Reserve Board Chair Jay Powell testifies twice before Congress – before the Senate Banking Committee and before the House Financial Services Committee – giving the semi-annual Monetary Policy Report. Also this week, U.S. Treasury Secretary Janet Yellen testifies on the state of the international financial system.

In terms of economic reports, the US CPI report will be of major focus this Thursday, and the PPI is out Friday. Additionally, the University of Michigan consumer survey is out Friday.

Looking at Asia, China releases its monthly inflation print on Wednesday, while Japanese wage figures, PPI figures, and the trade balance will be of particular focus to markets.

Moving to Europe, the U.K. monthly GDP report will be watched closely as the new Labour Majority takes power in Parliament.

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

Sunday, July 7, 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 –

· UN Secretary-General Antonio Guterres visits Tajikistan.

· Vanuatu Prime Minister Prime Minister Charlot Salwai travels to Beijing for meetings through July 12.

· Belarus Foreign Minister Maksim Ryzhenkov travels to Beijing for meetings with Chinese Foreign Minister Wang Yi.

· Tokyo holds gubernatorial elections.

· Today is Independence Day in the Solomon Islands. The country gained its independence from the UK in 1978.

Economic Reports/Events –

· China Foreign Exchange Reserves (June)

Europe

Political/Social Events –

· France holds the second round of parliamentary elections.

· In Pamplona, Spain the annual Running of the Bulls takes place.

Economic Reports/Events –

· Nothing significant to report.

Middle East

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Israel Foreign Exchange Reserves (June)

Africa

Political/Social Events –

· The Economic Community of West African States (ECOWAS) Leaders’ Summit begins in Abuja, Nigeria. In advance of the meetings, the military regimes of Niger, Mali, and Burkino Faso have announced they are quitting the organization “permanently.”

· Today is Saba Saba Day in Tanzania, celebrating the unification of the country and its independence.

Economic Reports/Events –

· Nothing significant to report.

Monday, July 8, 2024

Global

· The UN Security Council is scheduled to hold a briefing on the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO), followed by consultations.

· The UN’s International Maritime Organization meets in London through July 12.

Americas

Political/Social Events –

· The 64th Mercosur and Associated States Summit begins in Asunción, Paraguay. Leaders from the five full member countries (Argentina, Brazil, Paraguay, and Uruguay) along with the associated member countries (Bolivia, Chile, Colombia, Ecuador, Guyana, Peru). Argentine President Javier Milei is going to skip the meeting to avoid having to meet with Brazilian President Luiz Inacio Lula da Silva (Lula), whom he has called “an angry communist” and “corrupt.” Milei is sending his foreign minister, Diana Mondino, instead. But in an act further enraging Lula, Milei is scheduled to travel to Brazil to meet with Lula’s political opponent, Jair Bolsonaro.

Economic Reports/Events –

· Chile Inflation Rate YoY JUN/ Imports/ Exports/ Balance of Trade JUN

· USA Consumer Inflation Expectations JUN/ Consumer Credit Change MAY/ Used Car Prices YoY JUN

· Colombia Inflation Rate YoY JUN

· Brazil BCB Focus Market Readout

Asia

Political/Social Events –

· Japan and the Philippines are scheduled to hold high-level talks between their respective foreign ministers and defense ministers in Manila. It is expected a deal will be reached allowing each nation’s defense forces to visit each other’s territory - via a Reciprocal Access Agreement – and conduct coordinated drills, further deepening defense cooperation.

· Chinese Premier Li Qiang will host Bangladeshi Prime Minister Sheikh Hasina in China through July 10.

Economic Reports/Events –

· Japan Average Cash Earnings YoY MAY/ Overtime Pay YoY MAY/ Current Account MAY/ Bank Lending YoY JUN

· Australia Home Loans MoM MAY/ Investment Lending for Homes MAY

· Thailand Foreign Exchange Reserves JUN

· Singapore Foreign Exchange Reserves JUN

· Philippines Foreign Exchange Reserves JUN

Europe

Political/Social Events –

· Indian Prime Minister Narendra Modi travels to Russia for a summit with Russian President Vladimir Putin. This is traditionally an annual summit but since the War on Ukraine was launched by Putin, there has been questions about the future of Russia-Indian relations.

· There will be an informal meeting of EU Competitiveness Ministers (Internal market and industry) in Budapest, Hungary through July 9.

Economic Reports/Events –

· Bank of England Member of the Monetary Policy Committee Jonathan Haskel gives a speech at Kings College.

· Bank of England Executive Director for Data Analytics Transformation/Chief Data Officer James Benford gives a speech at the FCA Data Innovation for Future of Regulation (DiFoR) Conference in London.

· Ireland Construction PMI JUN

· Germany Imports/ Exports/ Balance of Trade MAY

· Romania GDP Growth Rate Final Q1

· France Current Account MAY/ Foreign Exchange Reserves JUN

· Greece Balance of Trade MAY

· Turkey Auto Production YoY JUN/ Auto Sales YoY JUN

· Hungary Budget Balance JUN

Middle East

Political/Social Events –

CIA Director Bill Burns is expected to travel to Qatar to join negotiations over the Gaza hostage situation and a possible breakthrough on a ceasefire.

Economic Reports/Events –

· Israel Business Confidence JUN/ Interest Rate Decision

· Kuwait M2 Money Supply YoY MAY/ Private Bank Lending YoY MAY

Africa

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Egypt Foreign Exchange Reserves JUN

Tuesday, July 9, 2024

Global

· The G7 Science and Technology Ministers will meet in Bolognia and Forlí, Italy, through July 11.

Americas

Political/Social Events –

· U.S. President Joe Biden will meet with Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol on the sidelines of the NATO summit in Washington.

· Today, Argentina celebrates Independence Day, celebrating the day in 1816 when the country declared its independence from Spain.

Economic Reports/Events –

· Federal Reserve Board Chair Jay Powell will deliver the Semimanual Monetary Policy Report to Congress before the Senate Banking Committee.

· Federal Reserve Board Vice Chair for Supervision Michael Barr gives a speech entitled “Financial Inclusion: Past, Present, and Hopes for the Future” at the Financial Inclusion Practices and Innovation Conference in Washington,

· Treasury Secretary Janet Yellen will present the annual testimony to Congress on the state of the international financial system before the House Financial Services Committee.

· Federal Reserve Board Governor Michelle Bowman gives a speech entitled “Promoting an Inclusive Financial System” at the Financial Inclusion Practices and Innovation Conference in Washington, D.C.

· USA NFIB Business Optimism Index JUN/ Redbook YoY JUL/ Fed Barr Speech/ Fed Chair Powell Testimony/ Fed Bowman Speech/ API Crude Oil Stock Change JUL/ Treasury Secretary Yellen Testimony

· Mexico Consumer Confidence JUN/ Inflation Rate YoY JUN/ Auto Exports YoY JUN/ Auto Production YoY JUN/ Core Inflation Rate YoY JUN

Asia

Political/Social Events –

· Thai Minister of Foreign Affairs Maris Sangiampongsa will visit China through July 10.

· Solomon Islands Prime Minister Jeremiah Manele makes an official visit to China through July 15. China has been eager to establish stronger economic and military ties with the island nation in the hoping of using its port to support Chinese naval operations.

· Today is Palau Constitution Day, celebrating the day when the country passed a new constitution modeled on the US Constitution.

Economic Reports/Events –

· Australia Westpac Consumer Confidence Change JUL

· Philippines Unemployment Rate MAY/ Industrial Production YoY MAY

· Taiwan Imports/ Exports/ Balance of Trade JUN

· China Vehicle Sales YoY JUN

· Indonesia Motorbike Sales YoY JUN

Europe

Political/Social Events –

· The 75th Anniversary NATO Summit begins in Washington, D.C., and runs through July 11. The main topics for discussion will be Ukraine’s prospects for joining NATO, how to continue supporting Ukraine’s war efforts, and how to deal with Russia. In addition, NATO is planning to release its first joint document on expanding cooperation with Australia, Japan, New Zealand and South Korea.

· The new UK Parliament meets for the first time since last week’s elections.

Economic Reports/Events –

· European Central Bank Board Member Piero Cipollone will give a video message at a digital euro event organized by the Central Bank of Cyprus.

· Bank of England Executive Director for Payments Victoria Cleland gives a speech on the Financial Stability Board, Regulatory Oversight Committee, and Global LEI Foundation Conference in London.

· Bank of England Executive Director, Insurance Supervision Gareth Truran gives a speech at the Insurance Asset Risk Webinar.

· Great Britain BRC Retail Sales Monitor YoY JUN

· Hungary Inflation Rate YoY JUN

· Slovakia Balance of Trade MAY

· Greece Inflation Rate YoY JUN

· Ireland Industrial Production YoY MAY

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.

Wednesday, July 10, 2024

Global

· OPEC releases its Monthly Oil Market Report.

Americas

Political/Social Events –

· In Bogota, Colombia, preparatory hearings begin in the trial of ex-president Alvaro Uribe, accused of bribing witnesses and fraud.

· The Bahamas celebrates Independence Day, marking the date when the country gained its independence from the UK in 1973.

Economic Reports/Events –

· Federal Reserve Board Chair Jay Powell will deliver the Semiannual Monetary Policy Report to Congress before the House Financial Services Committee.

· Federal Reserve Governor Lisa D. Cook gives a speech entitled “Global Inflation and Monetary Policy Challenges” at the 2024 Australian Conference of Economists, Adelaide, South Australia.

· USA MBA Mortgage Market Index JUL/05/ MBA Purchase Index JUL/05/ Fed Chair Powell Speech/ Wholesale Inventories MAY/ EIA Crude Oil & Gasoline Stocks Change JUL/05

· Brazil Inflation Rate YoY JUN

· Paraguay Balance of Trade JUN

· Ecuador Balance of Trade MAY

· El Salvador Inflation Rate YoY JUN

· Peru Balance of Trade MAY

Asia

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· New Zealand Visitor Arrivals YoY MAY/ RBNZ Interest Rate Decision

· South Korea Unemployment Rate JUN

· Japan PPI YoY JUN/ Eco Watchers Survey Current & Outlook JUN

· Philippines Imports/ Exports/ Balance of Trade MAY

· Australia Building Permits MoM Final MAY/ Private House Approvals MoM Final MAY/ RBA Simon Speech

· China Inflation Rate YoY JUN/ PPI YoY JUN

· Indonesia Consumer Confidence JUN

· Malaysia Unemployment Rate MAY

· India M3 Money Supply YoY JUN/28

Europe

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Bank of England Chief Economist Huw Pill gives a speech at Asia House in London.

· Romania Balance of Trade MAY

· Slovakia Industrial Production YoY MAY

· Turkey Industrial Production YoY MAY/ Unemployment Rate MAY/ Participation Rate MAY

· Italy Industrial Production YoY MAY

· Slovenia Industrial Production YoY MAY

· Greece Industrial Production YoY MAY

· Hungary Monetary Policy Meeting Minutes

· Ukraine Inflation Rate YoY JUN

· Russia Inflation Rate YoY JUN

Middle East

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· The International Monetary Fund will discuss Egypt's Extended Fund Facility for its third review.

· Saudi Arabia Industrial Production YoY MAY

· Jordan Inflation Rate YoY JUN

· Israel Consumer Confidence JUN

Africa

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Egypt Inflation Rate YoY JUN

· Tanzania Inflation Rate YoY JUN

· Mozambique Inflation Rate YoY JUN

Thursday, July 11, 2024

Global

· The UN Security Council is scheduled to hold consultations on the United Nations Peacekeeping Force in Cyprus (UNFICYP). In the afternoon, it is scheduled to hold a briefing on Colombia, followed by consultations.

· The International Energy Administration releases its monthly Oil Market Report.

Americas

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Federal Reserve Bank of Atlanta CEO & President Raphael Bostic will give the keynote “Call to Action” speech at the National Credit Union Administration’s DEI Summit 2024 in Minneapolis, Minnesota.

· Brazil Retail Sales YoY MAY

· USA Inflation Rate YoY JUN/ CPI JUN/ Initial Jobless Claims JUL/06/ EIA Natural Gas Stocks Change JUL/05/ Fed Bostic Speech/ Monthly Budget Statement JUN/ Fed Balance Sheet JUL/10

· Mexico Monetary Policy Meeting Minutes

· Paraguay Consumer Confidence JUN

· Peru Interest Rate Decision

Asia

Political/Social Events –

· In Beijing, the China International Development Cooperation Agency holds the 2nd Conference of the Forum on Global Action for Shared Development through July 13.

Economic Reports/Events –

· New Zealand Food Inflation YoY JUN

· Japan Machinery Orders YoY MAY/ Foreign Bond Investment JUL/06/ Stock Investment by Foreigners JUL/06/ Machine Tool Orders YoY JUN

· Australia Consumer Inflation Expectations JUL

· Philippines Foreign Direct Investment APR

· South Korea Interest Rate Decision

· Thailand Consumer Confidence JUN

· Malaysia Retail Sales YoY MAY/ Interest Rate Decision

· China New Yuan Loans JUN/ M2 Money Supply YoY JUN/ Outstanding Loan Growth YoY JUN/ Total Social Financing JUN

· Sri Lanka PPI YoY MAY

· Indonesia Car Sales YoY JUN

Europe

Political/Social Events –

· There will be an informal meeting of EU Environmental Ministers in Budapest, Hungary through July 12.

Economic Reports/Events –

· Great Britain RICS House Price Balance JUN/ GDP YoY MAY/ Goods Trade Balance MAY/ Industrial Production YoY MAY/ Manufacturing Production YoY MAY/ Balance of Trade MAY/ Construction Output YoY MAY/ NIESR Monthly GDP Tracker JUN

· Germany Inflation Rate YoY Final JUN

· Romania Inflation Rate YoY JUN

· Slovakia Construction Output YoY MAY

· Turkey Retail Sales YoY MAY/ Foreign Exchange Reserves JUL/05

· Ireland Inflation Rate YoY JUN

· Serbia Interest Rate Decision

· Belarus Inflation Rate YoY JUN

· Russia Current Account Q2

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 –

· South Africa Gold Production YoY MAY/ Mining Production YoY MAY/ Manufacturing Production YoY MAY

Friday, July 12, 2024

Global

· The UN Security Council is scheduled to vote on draft resolutions concerning BINUH - United Nations Integrated Office in Haiti, and UNMHA - UN Mission to support the Hudaydah Agreement. Afterwards, it is scheduled to hold a briefing on the United Nations Office for West Africa and the Sahel (UNOWAS) followed by consultations.

Americas

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Asia

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· New Zealand Business NZ PMI JUN/ Electronic Retail Card Spending YoY JUN

· Singapore GDP Growth Rate Adv Q2

· China Imports/ Exports/ Balance of Trade JUN

· Malaysia Industrial Production YoY MAY

· Japan Capacity Utilization MAY/ Industrial Production Final MAY

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.

Saturday, July 13, 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 –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· Today is Sovereignty Day in Montenegro, celebrating when the Berlin Congress recognized the nation as independent in 1878.

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, July 14, 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 –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· Today is Bastille Day in France, celebrating the end of the French monarchy.

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.

Francis Kelly 7/5/24 Francis Kelly 7/5/24

Our Recommended Summer Reading List (Part II) - Plus, Some Great TV Shows!

July 2, 2024

As we promised in Part 1 of our Recommended Summer Reading Lists last month, here is our follow-up list of more books we’ve been plowing through this summer. Plus, there are a few shows we’ve become addicted to that we wanted to suggest to you. We would love to hear what you are reading (or watching) this summer - send us your recommendations. And we hope you enjoy this list!

At the Edge of Empire: A Family’s Reckoning with China by Edward Wong (Viking Press 2024, 45 pages)
Wong is a diplomatic correspondent and former Beijing Bureau Chief for the New York Times. He is also the son of Chinese immigrants who settled in Washington, D.C. His father had, before escaping to the US, served in the People’s Liberation Army but rarely spoke of life in China. Wong, when he became the Times Beijing Bureau Chief, decided to investigate his father’s mysterious past and, in so doing, learned and decided to write about what his family had endured and what the nation had experienced. It is a fascinating and highly insightful chronicle of the extraordinary changes China has undergone - and is still undergoing.

Moscow X by David McCloskey (W.W. Norton, 2023, 464 pages)
If you are looking for a ripping good spy novel, Moscow X is the book to read. McCloskey is a former CIA analyst who wrote regularly for the President’s Daily Brief, delivered classified testimony to Congressional oversight committees, and briefed senior US government officials. He then went to McKinsey, focusing on national security, aerospace, and transportation clients on a range of strategic and operational issues. Armed with these rich experiences, McCloskey gives us a fantastic, fast-moving yarn of global espionage, the vicious internal politics of Putin’s Kremlin, the lives of Moscow’s super-wealthy, and the never-ending shadow war between the US and Russia. And if you like this one, try McCloskey’s earlier novel, Damascus Station (which I couldn’t put down, either).

No Trade is Free: Changing Course, Taking on China, and Helping America’s Workers by Robert Lighthizer ( Broadside Books, 2023, 364 pages)
With the presidential elections fast approaching, understanding the thinking of Donald Trump’s foreign and trade policy is important. Lighthizer, previously Trump’s U.S. Trade Representative who oversaw the implementation of the tariff regime on China (which President Biden has essentially kept in place) as well as negotiation of the US-Mexico-Canada (USMCA) trade agreement, presents a crisp overview of what drives not just Trump’s but the current Republican view of free trade - essentially, there is no free trade and the US gives away too much. Lighthizer is no rube to Washington politics and policy, having previously served as Deputy U.S Trade Representative in the Reagan Administration, as an important congressional staffer focused on trade, and as a highly successful lawyer at one of the US’ biggest law firms. This is an excellent tutorial for understanding what is proving to be, in many ways, a rough Washington consensus on the future of globalization. And keep in mind: If Trump wins, Lighthizer is being widely touted as his likely Treasury Secretary.

Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein & Michael Pettit (Yale University Press, 2020, 288 pages)
This one is not new, but it was highly recommended by a friend of mine, who I consider a genius on trade and geoeconomic issues. The author’s premise is trade disputes are usually understood as conflicts between countries with competing national interests, “but they are often the unexpected result of domestic political choices to serve the interests of the rich at the expense of workers and ordinary retirees.” The authors go deep to understand how trade decisions are made, researching policy decisions in China, Europe, and the US over the last 30 years. The book is well-researched, provocative, and - following on the above book by Robert Lighthizer - is highly complementary and necessary to understanding how global trade policy is being rethought and reformulated.

The War Below: Lithium, Copper, and the Global Battle to Power Our Lives by Ernest Scheyder (One Signal Publishers, 2024, 370 pages)
Almost three years ago, the U.S. Congress approved the spending of almost $1 trillion via the CHIPS Act, the Inflation Reduction Act, and the Infrastructure Bill - all highly dependent on accessing and using “critical minerals.” On a global scale, it is arguably the largest single driver of geopolitical tensions literally everywhere in the world. Everyone talks about critical minerals. But to be honest, I find most people really do not understand what is at stake and what it takes to get those minerals that are powering electric vehicles, solar panels, cell phones, and millions of other devices. Scheyder takes us, via this well-written and well-researched book, to school us on it all. This book is the perfect companion to the 2022 blockbuster “Chip Wars: The Fight for the World’s Most Critical Technology.”

The End of Everything: How Wars Descend into Annihilation by Victor David Hanson (Basic Books, 2024, 334 pages)
Military historian Victor David Hanson looks at a series of sieges and sackings in history to show how societies can and have been obliterated and that war is indeed hell and can wipe out a city, a race, a nation, or a culture.

American Buffalo: In Search of a Lost Icon by Steven Rinella (Random House, 2009, 304 pages)
This is an old one but one of my very favorites. If you are a hunter of fisherman, you probably know who Steve Rinella is - a chef, an outspoken conservationist, and a hunter and fisherman. In 2005, he won a lottery permit to hunt for a wild buffalo, or American bison, in the Alaskan wilderness. Despite the odds—there’s only a 2 percent chance of drawing the permit, and fewer than 20 percent of those hunters are successful—Rinella managed to kill a buffalo on a snow-covered mountainside and then raft the meat back to civilization while being trailed by grizzly bears and suffering from hypothermia. While that is all fascinating, what makes this book a true masterpiece is his deeply researched extraordinary history of the buffalo in America going back 14,000 years. I was blown away by what I learned and I promise it will give a deeper love for our environment and for one of the most majestic animals still walking the face of North America.

Television Recommendations

Clarkson’s Farm (Amazon Prime - 3 seasons and more coming)
I am blessed to live on a small farm - Open Door Farm - outside Washington, D.C. My wife is the farmer, and she’s quite good at it, raising sheep, chickens (Swedish Isebars), Turkeys (Heritage), Guinea Fowl (which eat almost 300 ticks a day!), horses, German Shepards, and Burmese cats. Growing up, I was rarely exposed to animals in general, and I cannot remember even stepping foot on a farm. It has been the greatest experience, thanks to my wife, being around all these animals. But I am most amazed by how little friends, associates, and business colleagues have been exposed to farm life, too. We are all the sad victims of a tech-dominant world with too many apps. Recently, I was asked to speak before a major midwestern farming organization, and in prepping for the event, I asked the coordinator (an agro-economist) what he thought was the best way for folks to learn about farming. Without missing a beat, he said, “Watch Clarkson’s Farm!” He was so right. Starring Jeremy Clarkson (best known for his long-running show “Top Gear”), it is a wonderfully funny, real, and massively enlightening way to learn how farming actually works - from raising livestock to growing agriculture. It shows episode after episode, the massive challenges farmers face getting food onto our tables - something we all take too much for granted.

Manhunt (Apple TV+)
We all periodically hear the complaint the US is going through the worst times in our history. Wrong. Watch this magnificently acted, historically accurate 7-part mini-series on the manhunt for John Wilkes Booth and his co-conspirators responsible for assassinating President Abraham Lincoln, the attempted simultaneous murder of Vice President Andrew Johnson, Secretary of State William Seward, and Secretary of War Edward Stanton just five days after General Robert E. Lee surrendered in Appomattox. If you watch this show, you will be given a fantastic lesson on what was the most truly perilous time in our democracy. And you will learn a lot about a truly great but largely forgotten American hero, Secretary of War Stanton. Stanton, deeply devoted to Lincoln and his vision for reunifying the country, personally oversaw the manhunt - often racing about the countryside with a Union Calvary unit, interrogating suspects and collaborators, all while overseeing the implementation of Lincoln’s plans for integrating freed slaves into American society - plans which were vigorously opposed by Lincoln’s successor, President Andrew Johnson.
I love history but was amazed at how little I actually knew about the true extent of the assassination plan: The role of the Bank of Montreal, of wealthy businessmen in New York, of the Confederate Secret Service, and the direct knowledge and approval of the plans by Confederate President Jefferson Davis. And how all of them were attempting to reignite the Civil War.
But the biggest surprise for me? I won’t ruin it for you, but just say make sure you watch the very end of the last episode to see the extraordinary thing Stanton did to stay in power so he could ensure Lincoln’s vision was put in place. This is a superb series.

Tokyo Vice (Max - 2 seasons - not clear if there will be another season)
It is an edgy, gritty, and always thrilling dramatization of the real-life story of American Jake Adelstein, who went to Tokyo and became a crime-beat reporter at the prestigious Yomiuri Shinbun newspaper. The viewer is plunged into the complex, tradition-bound world of the Yakuza, Japan’s transnational organized crime syndicates, as Adelstein endures intense threats to himself, his friends, and even his family back in the US as he writes about the powerful, sprawling Japanese mobs. Maybe best of all is the acting of legendary actor Ken Watanabe. The real-life Adelstein wrote his memoirs “Tokyo Vice: An American Reporter on the Police Beat in Japan” in 2009, which I hope to read later this summer.

Francis Kelly 7/2/24 Francis Kelly 7/2/24

GeoData

This is our weekly collection of important data points we believe may impact the future geopolitical outlook. We hope you find it useful. Please let us know if you have any questions.

Japan’s Answer to The Growing Shortage of Truck Drivers (Due to the Nation’s Spiraling Population Decline)? Build a 310-mile-long Conveyor Belt

The Japanese government has announced plans to build a 310-mile-long conveyor belt—an “Autotflow Road”—to move freight to and from Tokyo and Osaka. The belt would move the equivalent of freight that 25,000 trucks (and, thus, 25,000 drivers) move per day.

Why are they doing this? Japan’s dire population decline, it is expected that the number of truck drivers will shrink from 660,000 to 480,000 by 2030.

It should be noted the government is also making the point that they believe it will help reduce greenhouse emissions and ease Tokyo’s notorious traffic congestion. The expected cost would be approximately $500 million per 6-mile stretch.

But Japan is not the only country planning giant conveyor belt systems. In the UK, the British company Magway is planning a system that would send goods around London on a “magnetic surfboard” - a levitating magnetic field in hundreds of miles of narrow tunnels and pipes. And Switzerland is working on the Cargo Sous Terrain, a 310-mile network of underground freight tunnels. The first 43-mile section between Zurich and Häkingen is expected to open in 2031 and the rest by 2045.

Love Don’t Live Here No More: Majority of Chinese and Saudis Dislike Russia. Indians are Not Too Fond of Russia, Either.

Russian President Vladimir Putin has been focusing heavily on winning the hearts and minds of the Global South. We all saw his recent visits to North Korea and Vietnam, and he has been meeting with other leaders in Moscow on a tear. But this does not seem to be improving his or Russia’s overall approval ratings around the world.

Three examples: In a new poll released by Morning Consult, in China - which is seeing significant economic benefit from increased trading due to the Ukraine War - Russia comes in the low 40 percent approval range. That is down from a high of more than 75 percent in 2022. In Saudi Arabia - which Putin has tried but failed to build relations with - Russia comes in below 25 percent approval ratings. Even India - which, like China, has benefitted from a significant uptick in trade with Russia, particularly in the oil sector - seems to not like Russia much, coming in just below 50 percent.

The one factor that emerges as to why Russia is not building a fan base in the Global South is the invasion of Ukraine. All the numbers started to tank after Putin ordered the attack.

Corporate Earnings, the U.S. 2024 Elections, and The Constancy of Political Risk Concerns in the C-Suite

Political risk continues to be a consistent issue of focus among corporate leaders and in corporate earnings and projections. The New York Times Dealbook had an interesting little piece on how often the upcoming U.S. presidential elections are being mentioned in earnings calls.

In Q2, election-related issues have come up 364 times (per data provider AlphaSense.) - that’s more than in 2016 when the topic was raised 307 times but, as Dealbook points out, is below the rate that led to the all-time high of 902 times in 2020.

But we still have another reporting quarter to go - which I suspect will spike this number up considerably. At the very least, it shows that political risk is embedded in the corporate strategies of most major corporations (and that is a smart and good thing).

The Global Battle for Chip Supremacy is Really a Battle for High-Skilled Workers

In 2022, the U.S. Congress passed the CHIPS Act, authorizing $280 billion in new funding to encourage domestic research and manufacturing of semiconductors. So far, $30 billion in direct subsidies and $25 billion in loans have been handed out to support roughly $350 billion in investments. As the Semiconductor Industry Association pointed out, this is likely to trip U.S. chipmaking by 2023, taking the output of advanced logic chips from zero in 2022 to 28 percent of total global production.

But the big question hanging over the ultimate success of this massive effort is where is the U.S. going to get the workforce. As Bloomberg recently reported, “To build and run those fabs, however, companies need workers the US doesn’t have. Shortages of skilled installers of hyper-precise chipmaking equipment have already delayed projects. The number of Americans studying in relevant graduate programs has been flat for 30 years. A third of current fab workers are 55 and older, and more than half say they’re eager to quit. The Semiconductor Industry Association says chipmakers will face a shortfall of 67,000 skilled workers by 2030.”

Congress, anticipating this challenge, appropriated (only) $200 million to help build training and educational programs to help build the workforce. But that will not satisfy the challenge as current trends in the various programs of study necessary for chipmaking show.

What to do? Currently, there are two options, and they are not mutually exclusive: 1. Pour more money into programs for advanced degrees in the necessary fields for chip manufacturing jobs, and 2. Significantly hike the number of H-1B visas, allowing highly-skilled foreign workers into the U.S. Neither option is politically easy to achieve, but pressure will be growing in the next few years to move on both options.

Russia is Selling Ukraine’s Grain. And Among the Country’s They Sell It To Are Two NATO Members

Radio Free Europe/Radio Liberty (RFE/RL) recently investigated of what happened to millions of tons of Ukrainian wheat, grain, and peas seized by Russian forces. Incredibly, they discovered Russia sold it mostly to Iran, Azerbaijan, and Syria as well as Spain and Turkey - both NATO members. Using satellite photography provided by NASA’s Harvest Program, At least 6.4 million tons of Ukrainian-grown wheat alone was harvested by Russia and sold.

As RFE/RL explains, “…the European Union has banned over 91.2 million euros ($97.6 million) worth of Russian imports but has avoided barring Russian-EU trade in food and health products “in order not to harm the Russian population,” an EU explainer states. Clearly, Moscow is now taking advantage of this as a further money-maker to fund the war.

Francis Kelly 7/1/24 Francis Kelly 7/1/24

The Global Week Ahead

June 30 - July 7, 2024

Elections are again dominant on the global stage this coming week. As of this writing, the French far-right National Rally Party, led by Marine Le Pen, has scored a massive victory in parliamentary elections. A run-off election will be held next Sunday to determine how significant the margin of victory will be. But it appears it will be just short of an outright majority as French President Emmanuel Macron’s alliance of centrist parties are looking to potentially form an alliance with the far-left bloc to blunt the National Rally’s power in parliament.

Also this week, the UK holds parliamentary elections this Thursday . Looking at polls, the Labor Party is positioned to score a massive win – perhaps by the biggest margins in UK history. The Economist is estimating Labor could win as many as 434 seats – far more than the 334 seats needed to hold a majority. The Conservatives could shrink to as little as 106 seats from their current 365 seats.

But the most watched election-related event this week is not an actual vote but rather what President Biden will do after his disastrous debate performance. We do not believe President Biden will withdraw despite growing pressure, as most senior Democratic leaders (former Presidents Obama and Clinton, former Speaker Nancy Pelosi, etc.) have rallied to support the President staying in the race. However, the debate over the President’s mental and physical abilities and whether he should stand down will not go away any time soon and will likely intensify as Republicans get ready for the Republican Convention in Milwaukee, Wisconsin, on July 15.

Elsewhere in the world, the EU is set to make a significant decision this week. The EU will formally select its next Commission President, with current President Ursula von der Leyden likely to retain her position. This decision comes at a crucial time as Hungary, a long-standing antagonist of EU policies (especially its support for Ukraine), assumes the six-month chair of the European Union. EU leaders are actively strategizing to counter Hungary's potential efforts to implement policies that could undermine current EU's consensus policies.

We also note another change taking place this week in another important chair: At the United Nations today, Russia takes the chair of the UN Security Council for the month of July.

On the global economic radar screen, the big event this week will be the European Central Banks Conference, which will be held in Sintra, Portugal. Federal Reserve Chair Jay Powell and several other major central bank chiefs will be there, too, speaking on panels and likely giving important insights on global economic policy.

In the US, markets will look to the Fed releasing the June FOMC meeting minutes and the JOLTs and ADP data on Tuesday and Wednesday, leading into the overall jobs numbers report on Friday. Looking at Europe, Germany, Italy, France, and Spain release CPI reports. In Asia, China releases June PMIs and the Caixin indices, which will give a clearer indication of whether the country's growth is returning to normal. And Indonesia, the Philippines, South Korea, and Taiwan are due to release their June inflation reports.

Below is everything else we are watching happening around the world in the coming week:

Sunday, June 29, 2024

Global

· Nothing significant to report.

Americas

Political/Social Events –

· Uruguay will hold primary elections ahead of its Oct. 27 general election

Economic Reports/Events –

· Nothing significant to report.

Asia

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· China NBS Manufacturing PMI (June)/ NBS Non-Manufacturing PMI (June)/ NBS General PMI (June)

Europe

Political/Social Events –

· The First Round of parliamentary voting begins in France.

· Belgium’s six-month presidency of the Council of the European Union ends. Hungary takes the chair tomorrow, July 1.

Economic Reports/Events –

· Nothing significant to report.

Middle East

Political/Social Events –

· Qatar will host the third U.N.-led meeting of special envoys to Afghanistan in Doha through July 1, and the Afghan Taliban will attend.

· Egypt will host the Egypt-EU Investment Conference in Cairo.

Economic Reports/Events –

· Saudi Arabia Unemployment Rate Q1/ M3 Money Supply YoY MAY/ Private Bank Lending YoY MAY

· Israel Composite Economic Index MoM MAY

Monday, July 1, 2024

Global

· Russia assumes the presidency of the UN Security Council for the month of July.

Americas

Political/Social Events –

· Panama will inaugurate Jose Raul Mulino as president.

· In Mexico, judicial branch workers are expected to go on strike to show their opposition to President-elect Claudia Sheinbaum’s legal reform plan that would make all judges elected positions.

· The US Congress is out this week for the Independence Day holiday.

Economic Reports/Events –

· Mexico Business Confidence JUN

· Chile IMACEC Economic Activity YoY MAY

· Brazil S&P Global Manufacturing PMI JUN/ Balance of Trade JUN/ BCB Focus Market Readout

· USA S&P Global Manufacturing PMI JUN/ ISM Manufacturing PMI JUN/ ISM Manufacturing Employment JUN/ Construction Spending MAY

· Colombia Business Confidence MAY

· El Salvador Current Account Q1/ GDP Growth Rate YoY Q1

· Peru Inflation Rate YoY JUN

Asia

Political/Social Events –

· Hong Kong marks 27 years since it was returned to Chinese rule. Meanwhile, on the mainland, Monday is the first anniversary of an updated counterespionage law that expanded the definition of spying and gave authorities sweeping new powers.

Economic Reports/Events –

· Australia Judo Bank Manufacturing PMI Final JUN/ ANZ-Indeed Job Ads MoM JUN/ CoreLogic Dwelling Prices MoM JUN

· South Korea Exports/ Imports/ Balance of Trade JUN

· Indonesia S&P Global Manufacturing PMI JUN/ Inflation Rate YoY JUN/ Tourist Arrivals YoY MAY

· Japan Jibun Bank Manufacturing PMI Final JUN/ Consumer Confidence JUN

· Malaysia S&P Global Manufacturing PMI JUN

· Philippines S&P Global Manufacturing PMI JUN/ Business Confidence Q2/ Consumer Confidence Q2

· Taiwan S&P Global Manufacturing PMI JUN

· Vietnam S&P Global Manufacturing PMI JUN

· China Caixin Manufacturing PMI JUN

· Singapore Bank Lending MAY

· India HSBC Manufacturing PMI Final JUN

· Kazakhstan S&P Global Manufacturing PMI JUN/ Inflation Rate YoY JUN

· Thailand Retail Sales YoY APR

· Pakistan Inflation Rate YoY JUN/ Wholesale Prices YoY JUN/ Balance of Trade JUN

· Sri Lanka Current Account Q1

Europe

Political/Social Events –

· Hungary assumes the rotating presidency of the Council of the EU.

· The First payment to Ukraine of Russa’s windfall profits made from frozen Russian assets in the European Union are expected to be made.

· Armenia and Azerbaijan will submit work regulations to their governments for approval to resume operation of the bilateral border demarcation commission.

Economic Reports/Events –

· ECB President Christine Lagarde gives an introductory speech at the opening reception of the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· Ireland Consumer Confidence JUN/ AIB Manufacturing PMI JUN/ Harmonized Inflation Rate YoY Prel JUN

· Romania BCR Manufacturing PMI JUN

· Russia S&P Global Manufacturing PMI JUN/ Consumer Confidence Q2

· Great Britain Nationwide Housing Prices YoY JUN/ BoE Consumer Credit MAY/ S&P Global Manufacturing PMI Final JUN/ M4 Money Supply MoM MAY/ Mortgage Approvals & Lending MAY

· Hungary Balance of Trade Final APR/ HALPIM Manufacturing PMI JUN

· Switzerland Retail Sales YoY MAY

· Euro Area ECB Non-Monetary Policy Meeting/ HCOB Manufacturing PMI JUN/ ECB Forum on Central Banking

· Poland S&P Global Manufacturing PMI JUN

· Turkey Istanbul Chamber of Industry Manufacturing PMI JUN

· Spain HCOB Manufacturing PMI JUN

· Italy HCOB Manufacturing PMI JUN

· France HCOB Manufacturing PMI JUN

· Germany HCOB Manufacturing PMI JUN/ Baden Wuerttemberg CPI YoY JUN/ Bavaria CPI YoY JUN/ Brandenburg CPI YoY JUN/ Hesse CPI YoY JUN/ North Rhine Westphalia CPI YoY JUN/ Saxony CPI YoY JUN/ Inflation Rate YoY Prel JUN

· Greece S&P Global Manufacturing PMI JUN/ Unemployment Rate MAY

Middle East

Political/Social Events –

· The U.N. ban on Iranian production of IR-6 and IR-8 centrifuges will expire.

Economic Reports/Events –

· Kuwait M2 Money Supply YoY MAY

Africa

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Nigeria Stanbic IBTC Bank Nigeria PMI JUN

Tuesday, July 2, 2024

Global

· Nothing significant to report.

Americas

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Federal Reserve Chair Jerome H. Powell will participate in a policy panel discussion at the European Central Bank (ECB) Forum on Central Banking 2024, Sintra, Portugal.

Asia

Political/Social Events –

· In Thailand, election authorities will announce the names of 200 new senators who passed a final round of scrutiny, after an obscure process in which 20 professional groups nominated and voted for their peers without input from the general public. While the new Senate will not have a say in future votes for prime minister it will maintain oversight of the executive

branch and a role in appointing members of independent organizations such as the election and anti-corruption commissions. Nothing significant to report.

Economic Reports/Events –

· New Zealand NZIER Business Confidence Q2/ NZIER Capacity Utilization Q2

· South Korea Inflation Rate YoY JUN

· Philippines PPI YoY MAY

· Australia RBA Meeting Minutes

Europe

Political/Social Events –

· European Commission President Ursula von der Leyden is expected to be formally chosen for another term.

· In the Italian city of Siena, the Il Palio bareback horse race - where riders race each other through the center of the city – takes place.

Economic Reports/Events –

· European Central Bank Vice President Luis de Guindos chairs Session 1 "The rise and fall of inflation in the euro area – past, present and future" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· European Central Bank Board Member Frank Elderson chairs Session 2 "The economics of biodiversity at ECB Forum on Central Banking" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· European Central bank Board Member Isabel Schnabel chairs Panel 1 "Geopolitical shocks and inflation" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

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.

Wednesday, July 3, 2024

Global

· Nothing significant to report.

Americas

Political/Social Events –

· Grenada hosts a the 47th Regular Meetings of the Conference of CARICOM (Leaders from Caribbean Community).

Economic Reports/Events –

· New York Federal Reserve Bank President John Williams to participate on “Panel 2: Drivers of Equilibrium Interest Rates" before hybrid European Central Bank Forum on Central Banking 2024.

Asia

Political/Social Events –

· The Shanghai Cooperation Organization meets in Kazakhstan. The Organization is a China-led grouping considered part of Beijing's effort to promote an alternative world order. But there is no shortage of friction between the nine full members, which include India and Pakistan, Iran, Russia, and several Central Asian states. However, Indian Prime Minister Narendra Modi is not expected to attend.

· Vietnamese Prime Minister Pham Chinh will travel to Seoul, South Korea to meet with Prime Minister Han Duck-soo. Chinh will also meet with business leaders to encourage further investment in Vietnam.

· Indonesia's Ministry of National Development Planning hosts the Green Economy Expo in Jakarta from Wednesday to Friday. The CEO of energy giant Pertamina and the head of fertilizer maker Pupuk Indonesia are among those expected to attend.

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· European Central Bank Board Member Luis de Guindos chairs of Session 3 "Monetary Policy Cycles" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· European Central Bank Board Member Piero Cipollone chairs Session 4, "Euro area productivity in the short and long-run," at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· European Central Bank Board Member Philip R. Lane chairs Panel 2 "Drivers of equilibrium interest rates" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· European Central Bank President Christine Lagarde gives closing remarks at ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

Middle East

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Africa

Political/Social Events –

· The BlueInvest Africa event, organized by the European Commission, begins in Diani, Kenya, to discuss opportunities in the “blue economy” – maritime and coastal sectors and interior waterways.

Economic Reports/Events –

· Nothing significant to report.

Thursday, July 4, 2024

Global

· Nothing significant to report.

Americas

Political/Social Events –

· Today is Independence Day in the United States. Financial markets banks, and the government are closed so we can celebrate our freedom.

· Ecuador's United Workers Front union will march in opposition to the end of fuel subsidies.

· The political campaign period for the July 28 presidential election in Venezuela will begin.

· Argentine President Javier Milei will meet with Chinese President Xi Jinping in Beijing, China (to be confirmed)

Economic Reports/Events –

· Nothing significant to report.

Asia

Political/Social Events –

· The World Artificial Intelligence Conference begins in Shanghai, China. The state-backed four-day event will showcase the latest technology under the theme "Governing AI for Good and for All."

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· The United Kingdom holds parliamentary elections. The Labour Party is widely expected to sweep the elections.

· The European Union's provisional tariffs on China's electric vehicles are due to take effect, barring an 11th-hour deal between the two sides. Europe in mid-June said it would slap additional duties of up to 38% on imported cars deemed to have been unfairly subsidized by the Chinese state. But the move has stirred concerns over potential retaliation, with major auto exporter Germany pushing for a compromise.

· Today is the deadline for the European Commission to decide on a proposed acquisition by Lufthansa of a minority stake in Italy’s state-owned ITA Airways.

Economic Reports/Events –

· European Central Bank Board Member Philip R. Lane gives the Master in Economics and Finance (MEF) 2024 Lecture at the University of Naples Federico II in Naples, Italy.

· European Central Bank Board Member Elizabeth McCaul participates in the 28th Annual Economist Government Roundtable in Athens, Greece.

· European Central Bank Board Member Piero Cipollone gives a keynote speech at the 15th edition of the National Statistics Conference in Rome, Italy.

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.

Friday, July 5, 2024

Global

· The 100th Anniversary of the Paris Olympic Games opening ceremony is today where the modern games are being held. This year’s Olympics begin on July 26 and run through August 11.

Americas

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· New York Federal Reserve Bank President John Williams to give keynote before the 4th Suresh Tendulkar Memorial Lecture event organized by the Reserve Bank of India.

Asia

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· NATO Secretary General, Jens Stoltenberg, will give a press conference at the NATO Headquarters in Brussels, to preview the NATO Summit in Washington DC.

Economic Reports/Events –

· European Central Bank President Christine Lagarde participates in an 0n-stage conversation at the 24th edition of Les Rencontres Economiques d'Aix-en-Provence 2024 "Relier les mondes" in Aix-en-Provence, France.

· European Central Bank Board Member Frank Elderson gives introductory remarks followed by Q&A on a panel entitled "Embedding data culture in supervision" at Data Innovation for Future of Regulation (DIFoR) Conference organized by the Financial Conduct Authority in London, UK.

Middle East

Political/Social Events –

· Iran holds the second round of presidential elections.

Economic Reports/Events –

· Nothing significant to report.

Africa

Political/Social Events –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Saturday, July 6, 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 –

· Tokyo votes to elect its next governor, bringing an end to a two-week race between incumbent Yuriko Koike, backed by Japan's ruling Liberal Democratic Party, and her main challenger, Renho Saito, endorsed by the opposition. Over 11.5 million Tokyoites are registered to vote, and a record 56 candidates are on the ballot. The winner will hold the job for four years and oversee Japan's largest municipal budget.

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· In London, the National March for Palestine organized by the Stop the War coalition takes place. Organizers expect at least 100,000 people to attend.

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, July 7, 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 –

· Nothing significant to report.

Economic Reports/Events –

· Nothing significant to report.

Europe

Political/Social Events –

· France holds the second round of parliamentary elections.

· In Pamplona, Spain the annual Running of the Bulls takes place.

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

Francis Kelly 6/29/24 Francis Kelly 6/29/24

U.S. Financial Regulatory Week Ahead

July 1 - 5, 2024

It is about to be the quietest week of the summer in Washington. Independence Day is on Thursday, and everyone is taking the whole week off. And after all the massive legal fireworks that happened last week, we (and virtually all financial regulators) badly need it.

If you haven't caught up yet, the U.S. Supreme Court handed down two pivotal decisions that significantly impacted regulators. The more seismic of the two rulings was the dismantling of the Chevron deference, a 40-year-old doctrine that mandated federal judges to defer to regulatory agencies 'reasonable' interpretation of 'ambiguous' federal laws.

What are the implications of Chevron's reversal? For those celebrating the ruling, "regulatory creep" in Washington is now in check. Hard stop. What we are curious about is what happens next – do we see a flood of lawsuits from various business organizations challenging regulations that have been put in place over recent years due to the Chevron deference? That could shake the financial regulatory framework to its core.

The second case saw the Supreme Court rebuking the Securities and Exchange Commission's use of their in-house court to resolve certain enforcement disputes. The 6-3 decision, hailed by conservative groups, is a significant rollback of 'regulatory creep' at the SEC. Practically, it means a defendant can compel the SEC to take their case to a jury trial – a costly, labor-intensive action that could deter the Commission from initiating a case.

Elsewhere, life does not get any easier for FDIC Chair Marty Gruenberg. The National Treasury Employees Union (NTEU) – which represents FDIC staff – is fighting Gruenberg's efforts to get employees back into the office. Last Friday, Gruenberg issued a new order requiring employees to show up at least two days a week, effective July 15. The NTEU says the order is illegal, and Gruenberg had not consulted with the union, accusing Gruenberg of "bad faith bargaining." At this point, you must think Gruenberg cannot wait to get out of the FDIC.

And there was the release of the annual stress test results from the Federal Reserve. All 31 banks passed the test – which gave an opening to virtually all the major bank trade groups to argue this is further evidence the Fed's proposed bank capital rule is not necessary.

Speaking of the proposed bank capital rule – the Fed began shopping around a "revised" (read: scaled back) version of the rule. The revision has not been seen publicly yet, but the rumor is the proposal will scale back the capital increase number to 5 percent from the original 16 percent plus, but our guess is two things will happen: Progressive Democrats in Congress will not be happy with it, and bank trade groups will not be satisfied, either, saying it was not scaled back enough. The fight will continue.

As for what is happening this coming week, the only two events or speeches we could find scheduled among financial regulators are overseas: Fed Chair Jay Powell will attend the European Central Bank Forum in Portugal, and CFTC Commissioner Caroline Pham will participate in a conference in Zurich.

Below is a listing of what is happening at the financial regulatory agencies this week and in Congress. Please let us know if you have any questions.

Below is a full listing of what is happening at the financial regulatory agencies this week and in Congress. Please let us know if you have any questions.

U.S. Congressional Hearings

U.S. Senate

The Senate is out of session for the July 4 holiday and returns July 8.

House of Representatives

The House is out of session for the July 4 holiday and returns July 8.

Joint Committees

Congress is out of session for the July 4 holiday and returns July 8.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

Tuesday, July 2, 9:30 a.m. (Portugal time) – Federal Reserve Chair Jerome H. Powell will participate in a policy panel discussion at the European Central Bank (ECB) Forum on Central Banking 2024, Sintra, Portugal.

U.S. Treasury Department

There are no significant events scheduled at this time.

Securities and Exchange Commission

There are no significant events scheduled at this time.

Commodities Futures Trading Commission

Wednesday, July 3, 10:00 a.m. Zurich Time – CFTC Commissioner Caroline D. Pham will participate in a panel titled “Navigating and making sustainable the Al and DLT paradigm shift: Challenges and opportunities in the financial services market” at the Point Zero Forum in Zurich, Switzerland. Later in the day (11:50 a.m. Zurich time) she will participate in a “Capital Meets Policy” dialogue on the global AI regulatory landscape. And then at 1:30 p.m. Zurich time, Commissioner Pham will participate in a panel discussion entitled “Global policymakers’ dialogue on state of CBDCs and digital money regulations.”

FINRA

There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

There are no significant events scheduled at this time.

Office of the Comptroller of the Currency

There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

There are no significant events scheduled at this time.

National Credit Union Administration

There are no significant events scheduled at this time.

Federal Trade Commission & Department of Justice Antitrust Division

Monday, July 1, 11:00 a.m. – The FTC will hold a Closed Commission Meeting.

Farm Credit Administration

There are no significant events scheduled at this time.

International Monetary Fund & World Bank

There are no significant events scheduled at this time.

North American Securities Administrators Association

There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

Tuesday, July 2, 10:30 a.m. – The Institute for International Finance holds an online event entitled “Enhancing Debt Sustainability and the Investment Environment: The Latin American Context.”

Think Tanks and Other Events

Monday, July 1, 1:00 p.m. – The Atlantic Council's GeoEconomics Center holds a virtual event, beginning at 1 p.m., on "marking the 80th anniversary of the opening of the Bretton Woods Conference.

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

Francis Kelly 6/28/24 Francis Kelly 6/28/24

GeoData

Where Data and Geopolitics Intersect - and Explain Possible New Trends

June 24, 2024

US-China Decoupling in One Chart (with Two More Bonus Charts)

In the last few years, there have been a lot of discussions about the rate of decoupling between China and the US. We have noticed the discussion seems to regularly default to a month-by-month analysis or, at best, a quarterly analysis. Recently, CEIC Data published a two-year chart (2022 to 2024) showing Chinese exports not only to the US (which, indeed, have seen significant shrinkage) but also to the rest of the world.

The only actual increase, as the chart below shows, is to Southeast Asia, Latin America, and, of course, Russia. It is probably the best single chart we have seen so far, making clear how decoupling has taken hold and, more importantly, how it is not just a US-China issue but also one impacting the EU and Japan (who counts China as their biggest trading partner). And for the other major trading partner not listed here - South Korea - the second chart below shows their plunge in trade with China versus the spike in trade with the US.

Finally, the third chart shows how increasingly dependent China is on industrial production and exports rather than encouraging consumer spending. So, exports are driving China’s economic recovery—but not to the US and EU like it used to rely on.

A Common Question From Clients: Where Has All the CHIPS Act and IRA Money Gone? The Answer: Most of It Has Not Been Distributed Yet - Meaning The Massive Fiscal Boost Has Yet to Hit the Economy

There is a lot of excitement in the markets about the power of CHIPS Act, the Infrastructure bill, and the Inflation Reduction Act (IRA) spending to turbo-charge the US economy. But the real question is when can we expect it? From the charts below (courtesy of Politico), not for a while. So far, less than 2 percent of available CHIPS funding has been awarded by the Department of Commerce. The simple reason for this is the construction of semiconductor manufacturing facilities is anything but “shovel-ready.” It takes years - our understanding is five years minimum - to construct facilities. And you can only imagine how long it takes to plan such buildings.

The infrastructure bill and the IRA are moving along significantly faster in dispensing funds. But again, infrastructure building of any kind takes a long time to complete.

All in all, the size and scope of the fiscal spending of three bills are going to be a significant plus for the US economy - but not in time for the 2024 elections. And, if anything, Washington politicians will be lucky if it has ramped up enough to significantly impact the economy in a major way by the 2026 midterms.

The US Election, Gasoline Prices, the Budget/Debt Crisis, and the SPR: Is the SPR Doing OK and Is It Ready for a Crisis? And Who Knew Congress has Been Using SPR Sales for Budget Funding?

The Financial Times recently had an interesting and timely piece reporting how President Biden is prepared to use oil from the US Strategic Petroleum Reserve (SPR) again in an attempt to drive down persistently high gas prices ahead of the election. We have had the opportunity to do extensive speaking engagements throughout the Midwest and South in recent months, and in talking to a broad array of voters at all sorts of economic levels, the price of gasoline is the top complaint (quickly followed by high food prices). Heading into November, it continues to be a tough challenge for the Biden Administration as various geopolitical and economic factors have whipsawed the price of oil for the last three years, especially since 2022.

While there is little a President can actually do to drive down oil prices, one of the tools at hand is the ability to release portions of the SPR. Conceptually, added supply in the public market would seem like a smart way to push prices down. But In reality, SPR releases do little to impact prices as it just is not enough to impact the markets in a large enough way. Yet, President Biden (and previous Presidents) do it because, well, at least, they can look like they are doing something.

President Biden has used that tool with vigor. He first announced on March 31, 2022, that the Administration would release 1 million barrels of oil per day from the reserve for the next 180 days, selling it at an average price of $96 per barrel—making it the biggest SPR sale in 40 years. This sale also lowered the SPR to its lowest levels in more than 40 years.

So, that got us wondering: With news of a likely new Presidential mandate to release more SPR stock and ongoing - indeed, increasing - geopolitical tensions and rising shipping rates globally, we were curious about what the current SPR level stands (after all, the whole point of the SPR is have a massive oil reserve in times of crisis. And Republicans have been strong critics of the Biden Administration for allowing to get so low.

By way of background, the SPR is authorized to store 727 million barrels. Currently, according to recent Department of Energy stats, the current level is at 370.9 million barrels.

But there is another little known factor as to why the SPR is so low: Congress has figured out selling SPR reserves is a way to get additional revenue for federal budgets. For example, according to the US Energy Information Agency, “in 2018, Congress directed the sale of more than 100 million barrels of oil from the U.S. Strategic Petroleum Reserve (SPR) in U.S. government fiscal years (FY) 2022 through 2027. Based on legislated sales established in multiple acts of Congress, the SPR could decline by about 40% in the coming decade while still meeting requirements for petroleum import coverage. Assuming no other legislation over this period, the SPR could decline from 695 million barrels at the start of 2017 to about 410 million barrels at the start of 2028.” That money has gone to help fund the Highway Trust Fund and other government programs.

I guess the point of this post is to ask: Do we take the SPR seriously anymore as a critical national economic security program? Or has its time of necessity essentially passed, especially with the ability of US producers to massively increase the pumping of crude at US sites if needed? Just looking at Permian (Texas and New Mexico) production, it seems there is more than enough oil if needed in an emergency.

And do US voters understand - as we march toward the November elections - that whatever President Biden does with SPR releases, it really is not going to impact the price of gasoline now or in the future?

Francis Kelly 6/24/24 Francis Kelly 6/24/24

U.S. Financial Regulatory Week Ahead

June 24 - 28, 2024

The Dog Days of Summer are settling into Washington, DC, and it shows this coming week. Most federal financial regulatory agencies have little on the docket except for the Federal Reserve (see below). The U.S. Senate is out of session until July 8 (although the House is in session this week—more on that below), and everyone is looking forward to the Fourth of July holiday.

First, we note that the Federal Reserve is scheduled to release the results of its annual stress tests on Wednesday. The results will show how 30 lenders with $100 billion in assets or more would fare under intense economic and political scenarios.

Getting back to Congress, as mentioned above, the House of Representatives is in session this week, and the House Financial Services Committee has three hearings scheduled aimed right at regulators, as their titles make clear: "Stress Testing: What's Inside the Black Box?", "Solutions in Search of a Problem: Chair Gensler's Equity Market Structure Reforms," and "Testimony of the HUD and FHFA Inspectors General" (which won't be a boring hearing and go to mismanagement claims).

We should also note that when the Senate returns the week of July 8, the Senate Banking Committee will hold a hearing on Christy Goldsmith Romero's nomination as the Chair of the Federal Deposit Insurance Corporation. We are hearing growing opposition among Republican senators to her nomination, and our assessment at this point is that getting her confirmed will not be easy or happen quickly.

Finally, looking at the speech calendar this coming week, we will be listening closely to Federal Reserve Board Governor Michelle Bowman's speech, "Perspectives on U.S. Monetary Policy and Bank Capital Reform," at the Policy Exchange Event in London. It will likely be another clear criticism of the Fed's proposed bank capital rules.

Below is a complete listing of what is happening at the financial regulatory agencies this week and in Congress. Please let us know if you have any questions.

U.S. Congressional Hearings

U.S. Senate

The Senate is out until July 8. But when they return, the Senate Banking Committee will hold a confirmation hearing on July 11 for Christy Goldsmith Romero to be the next Chair of the Federal Deposit Insurance Corporation.

House of Representatives

·Wednesday, June 26, 10:00 a.m. – The House Financial Services Housing and Insurance Subcommittee holds a hearing on "Testimony of the HUD and FHFA Inspectors General."
Wednesday, June 26, 10:00 a.m. – The House Homeland Security Committee holds a hearing on "Finding 500,000: Addressing America's Cyber Workforce Gap."'
Wednesday, June 26, 2:00 p.m. – The House Financial Services Financial Institutions and Monetary Policy Subcommittee holds a hearing on "Stress Testing: What's Inside the Black Box?"
Thursday, June 27, 10:00 a.m. – The House Financial Services National Security, Illicit Finance, and International Financial Institutions Subcommittee holds a hearing entitled “The Role of the Export-Import (Ex-Im) Bank of the United States Amid Intensifying Economic Competition with China.”
Thursday, June 27, 12:00 p.m. – The House Appropriations Transportation, Housing and Urban Development, and Related Agencies Subcommittee holds a markup of the FY2025 Transportation, Housing and Urban Development, and Related Agencies bill.
Thursday, June 27, 2:00 p.m. – The House Financial Services Capital Markets Subcommittee holds a hearing entitled “Solutions in Search of a Problem: Chair Gensler’s Equity Market Structure Reforms.”

Joint Committees

There are no hearings scheduled at this time.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

Monday, June 24, 3:00 p.m. – Federal Reserve Board Governor Christopher J. Waller gives opening remarks at the International Journal of Central Banking Annual Research Conference 2024, Rome, Italy.

Tuesday, June 25, 7:00 a.m. – Federal Reserve Board Governor Michelle Bowman gives a speech entitled “Perspectives on U.S. Monetary Policy and Bank Capital Reform” at the Policy Exchange Event in London.

Tuesday, June 25, 12:00 p.m. – Federal Reserve Board Governor Lisa D. Cook gives a speech entitled “Economic Outlook” at the Economic Club of New York Luncheon, New York.

Tuesday, June 25, 2:10 p.m. – Federal Reserve Board Governor Michelle W. Bowman gives pre-recorded opening remarks at the Midwest Cyber Workshop hosted by the Federal Reserve Banks of St. Louis, Chicago, and Kansas City.

Friday, June 28, 12:00 p.m. – Federal Reserve Board Governor Michelle W. Bowman patriciates in a conversation At the Ronald Reagan Presidential Foundation and Institute Leadership Council Conference (virtual).

U.S. Treasury Department

There are no significant events scheduled at this time.

Department of Housing and Urban Development

There are no significant events scheduled at this time.

Securities and Exchange Commission

Tuesday, June 25, 2:05 p.m.: SEC Chair Gary Gensler will participate in a one-on-one interview moderated by Bloomberg Businessweek Editor Brad Stone at the Bloomberg Invest Summit in New York.
Thursday, June 27, 2:00 p.m. – The SEC holds a Closed Meeting.

Commodities Futures Trading Commission

There are no significant events scheduled at this time.

FINRA

There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

There are no significant events scheduled at this time.

Office of the Comptroller of the Currency

There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

There are no significant events scheduled at this time.

National Credit Union Administration

There are no significant events scheduled at this time.

Federal Trade Commission & Department of Justice Antitrust Division

There are no significant events scheduled at this time.

Farm Credit Administration

There are no significant events scheduled at this time.

The Federal Financial Institutions Examination Council

There are no significant events scheduled at this time.

International Monetary Fund & World Bank

There are no significant events scheduled at this time.

North American Securities Administrators Association

There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

Monday, June 24, 2:00 p.m. (East South America Time) – The Institute for International Finance holds its joint IIF-Interamerican Development Bank Tokenization Forum in São Paulo, Brazil.
Tuesday, June 25, 8:00 a.m. – The US Chamber of Commerce hosts former SEC Chair Jay Clayton as the keynote speaker for a conference entitled “Investors and the Markets First.”
Thursday, June 27, 8:00 a.m. – the Institute for International Finance holds its Global AI Update (virtual).
Thursday, June 27, 11:00 a.m. – SIFMA holds a Members Briefing (virtual) entitled “The US Economic Outlook.”
Friday, June 28, 10:00 a.m. (Central Europe Time) – The Institute for International Finance holds its IIF/AWS Digital Resilience: Six Months to Dora in Brussels.

Think Tanks and Other Events

Monday, June 24, 8:30 a.m. – The annual OECD USCIB Tax Conference is the premier US-based event of the year for up-to-date OECD tax policy developments and business interaction.
Tuesday, June 25, 9:30 a.m. – The Center for Strategic and International Studies holds a discussion on "AI (artificial intelligence) in the Field of Economic Development."
Tuesday, June 25, 11:00 a.m. – The Center for American Progress holds a virtual discussion on "Increasing Competition and Fairness in Food and Agricultural Markets."
Tuesday, June 25, 12:30 p.m. – The Tax Foundation is hosting an online discussion with Will McBride and Chris Edwards on universal savings accounts, their track record in Canada and the United Kingdom, and how they could help Americans save more.
Wednesday, June 26, 4:00 p.m. – The American Enterprise Institute for Public Policy Research holds a book discussion on "Ending ESG (environmental, social and governance) and Restoring the Economic Enlightenment."
Wednesday, June 26, 12:00 p.m. – The Federalist Society for Law and Public Policy Studies holds a virtual discussion on "The SEC and Cryptocurrency."
Thursday, June 27, 9:00 a.m. – The Peterson Institute for International Economics holds a virtual book discussion entitled “The Green Frontier: Assessing the Economic Implication of Climate Action.”

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

Fulcrum Perspectives

July 12 - 14, 2024

July 7 - 14, 2024

July 5 - 7. 2024

July 2, 2024

Television Recommendations

June 30 - July 7, 2024

Sunday, June 29, 2024

Monday, July 1, 2024

Tuesday, July 2, 2024

Wednesday, July 3, 2024

Thursday, July 4, 2024

Friday, July 5, 2024

Saturday, July 6, 2024

Sunday, July 7, 2024

July 1 - 5, 2024

June 28 - 30, 2024

The French Elections

Tensions in the South China Sea

Russia/Ukraine

Americas

Middle East

Geoeconomics

Where Data and Geopolitics Intersect - and Explain Possible New Trends

June 24, 2024

US-China Decoupling in One Chart (with Two More Bonus Charts)

A Common Question From Clients: Where Has All the CHIPS Act and IRA Money Gone? The Answer: Most of It Has Not Been Distributed Yet - Meaning The Massive Fiscal Boost Has Yet to Hit the Economy

The US Election, Gasoline Prices, the Budget/Debt Crisis, and the SPR: Is the SPR Doing OK and Is It Ready for a Crisis? And Who Knew Congress has Been Using SPR Sales for Budget Funding?

June 24 - 28, 2024

U.S. Congressional Hearings

US Regulatory Meetings & Events

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