U.S. Financial Regulatory Week Ahead

A New Chair of the House Financial Services Committee, The CFPB’s Says He’s Not Leaving, the Blockchain Association’s Powerhouse Policy Summit, And Are We Getting Ready to Spin Out the GSEs?

December 16 - 20, 2024

We are a little more than a week away from the two-week holiday break (the ultimate quiet time in Washington), but things remain busy as regulators and Congress prepare to hit the ground running in 2025.

Last week, we saw the final pieces of the Congressional puzzle fall into place with the election of Congressman French Hill (R-AK) as the new chair of the House Financial Services Committee.  Hill, a former banker and the crypto expert, has said his first priority will be on the regulatory burden community banks and "the misdirected oversight and the regulatory priorities of the SEC," as well as finding a way to craft a market structure bill for digital assets.

Hill, who is known to have an excellent relationship with incoming Senate Banking Committee Chair Tim Scott (R-SC), also spoke last week about the need to end the conservatorship of Freddie Mac and Fannie Mae, an issue which seems to be suddenly gaining steam (we would note the Congressional Budget Office (CBO) releasing a letter and report released a letter and report last week saying improved finances at the two mortgage giants have improved considerably, making them likely more attractive to investors and for the government to sell its stake in the companies.  The incoming "Department of Government Efficiency" (DOGE), headed by Elon Musk and Vivek Ramaswamy, will likely consider spinning out Freddie and Fannie as among their recommendations to restructure the federal government. 

Also last week, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra said at a Senate Banking Committee hearing that he is not planning to step down when President Trump takes office in January.  He acknowledged that the President can remove him, but for now, he will wait and see what happens.  (Our view?  Chopra will get fired on day one.) 

Chopra also keeps churning out new regulations.  Last week, the CFPB released a final rule restricting banks' overdraft fee charges for customers with insufficient funds.  The rule caps overdrafts at $5.  As you might imagine, banks are unhappy with the rule.

Looking forward to what is happening this week, the Blockchain Association is holding its annual policy summit in Washington.  The list of speakers is, quite frankly, quite impressive by trade association standards and shows the rapidly increasing power of blockchain and crypto in Washington.  Both the chair of the Senate Banking Committee and House Financial Services Committee are speaking along with eight additional senators and members of Congress, two SEC Commissioners, one CFTC commissioner, a number of senior Treasury and IRS officials, and the CEOs of virtually all the major blockchain companies.

Below are all the other noteworthy events in the financial regulatory world in the coming week.  Please let us know if you have any questions.

U.S. Congressional Hearings

U.S. Senate

·       Wednesday, December 18, 10:00 a.m. – The Senate Budget Committee holds a hearing on "Next to the Fall: The Climate-Driven Insurance Crisis is Here And Getting Worse.".

House of Representatives

·       There are no significant events scheduled at this time.

Congressional Joint Committees

·       Wednesday, December 18, 2:30 p.m. – The Joint Economic Committee holds a hearing entitled “Trade Wars & Higher Costs: The Case Against Trump’s Tariffs”

Federal Department & Regulatory Agency Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• December 18-19 – The Federal Reserve Board’s Federal Open Market Committee meets to discuss the economy and interest rates. Federal Reserve Board Chair Jay Powell will hold a press conference on Thursday at 2:00 p.m.

  U.S. Treasury Department

• There are no significant events scheduled at this time.

Department of Commerce

• There are no significant events scheduled at this time.

Department of Housing and Urban Development

• There are no significant events scheduled at this time.

Small Business Administration

• There are no significant events scheduled at this time.

Securities and Exchange Commission

• Tuesday, December 17, 1:00 p.m. – SEC Commissioners Hester Peirce and Mark Uyeda will participate on a panel discussion entitled “View from the SEC” at the Blockchain Association Policy Summit in Washington, D.C.

• Wednesday, December 18, 10:00 a.m. – The SEC will hold an Open Meeting.  They will consider the 2025 Final Budget and Accounting Support Fee for the Public Company Accounting Oversight Board whether to approve the 2025 Final Budget and Accounting Support Fee for the Public Company Accounting Oversight Board.

• Thursday, December 19, 2:00 p.m. – The SEC will hold a Closed Meeting.

 Commodities Futures Trading Commission

• Tuesday, December 17, 1:35 p.m. – CFTC Commissioner Summer K. Mersinger will participate in the “View from the CFTC” fireside chat at the Blockchain Association Policy Summit.

• Wednesday, December 18 9:30 a.m. – The CFTC will hold an Open Meeting.  They will consider two items: 1) The Final Rule on Real-Time Public Reporting Requirements and Swap Data Recordkeeping and Reporting Requirements and 2) The Final Rule on Regulations to Address Margin Adequacy and to Account for the Treatment of Separate Accounts by Futures Commission Merchants.

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.

FINRA

• There are no significant events scheduled at this time.

National Credit Union Administration

• Tuesday, December 17, 10:00 a.m. – The NCUA Board will hold a board meeting. They will consider two items: 1) NCUA’s 2024-2026 Diversity, Equity, Inclusion, and Accessibility Strategic Plan, and 2) the NCUA’s 2024 Annual Performance Plan.

Federal Trade Commission & Department of Justice Antitrust Division

• Wednesday, December 18, 9:30 a.m. – The FTC will hold a virtual public workshop entitled “Competition Snuffed Out: How Predatory Pricing Harms Competition, Consumers, and Innovation.”  

Farm Credit Administration

• There are no significant events scheduled at this time.

Farm Credit Insurance Corporation

• 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.

Think Tanks and Other Events

Trade Associations

• Monday – Tuesday, December 16-17, the Blockchain Association holds its annual policy summit.  Speakers include incoming Senate Banking Committee Chair Senator Tim Scott (R-SC), incoming House Financial Services Committee Chair French Hill (R-AR), SEC Commissioners Hester Peirce and Mark Uyeda, CFTC Commissioner Summer Mersinger, and anumber of other members of Congress and the Biden Administration.

Think Tanks and Other Events

• Wednesday, December 18, 9:00 a.m. – The Peterson Institute for International Economics holds an event entitled “BRICS cooperation: An alternative to the current global order?”

• Thursday, December 19, 10:00 a.m. – The Brookings Institution will hold an event with National Economic Advisor Lael Brainard on how to strengthen America’s supply chains.

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

Recommended Weekend Reads

Implications for the Middle East Post-Assad, Latin America is About to Become a Major Priority for Trump, Where is India Going? And The Looming U.S. Tax & Budget Battle

December 13 - 15, 2024

Please find below 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.

Post-Assad Syria and Implications for the Rest of the Middle East 

• Khamenei Loses Everything    Eliot Cohen/The Atlantic

  When Hamas’s Yahya Sinwar launched Operation Al-Aqsa Flood against Israel on October 7, 2023, he intended to deal a decisive blow against a powerful nation-state—and he succeeded. But the state his attack has devastated turned out not to be Israel, but Iran, his key sponsor.
  

• In Post-Assad Middle East, Iran’s Loss Is Turkey’s Gain  Foreign Policy

  The cataclysmic events of the last few weeks in Lebanon and Syria—from Israel’s decimation of Hezbollah to the fall of the Assad regime—have opened a new chapter for the Middle East. The hope may be that the collapse of Iran’s so-called axis of resistance in the Levant augurs a period of peace and stability in the region. The more likely outcome, however, is an intensification of regional competition to fill the vacuum left by the diminishment of Iran and its allies. The collapse of Hezbollah changed the balance of power between Iran and Israel, and the fall of Bashar al-Assad has further weakened Iran. However, the broader consequence is a change in the balance of power between Turkey and everyone else.

• Lines on a 1916 map may not keep Syria together   Australian Strategic Policy Institute

  Hayat Tahrir, al-Sham (HTS) has just taken Damascus. However, the capture of Damascus will be just the beginning to a massive change in the balance of power in the Middle East and perhaps the world.  The boundaries of Syria were set following the collapse of the Ottoman Empire - lines on the map drawn Mark Sykes and Georges Picot in a secret agreement in 1916, known as the Picot-Sykes Agreement.  Like many European borders drawn before and after the First World War, lines on maps did not match the population already present.

• What's next for Syria's devastated economy?     Deutsche Welle

  Syria's economy was worth $67.5 billion (€63.9 billion) in 2011 — the same year that large-scale protests broke out against President Bashar Assad's regime, which sparked a rebel insurgency that escalated into a full-blown civil war. The country was placed 68th among 196 countries in global GDP rankings, comparable to Paraguay and Slovenia.  By last year, the economy had fallen to 129 in the league table, having shrunk by 85% to just $9 billion, according to World Bank estimates. That put the country on par with the likes of Chad and the Palestinian Territories. Almost 14 years of conflict, international sanctions and the exodus of 4.82 million people  — more than a fifth of the country's population — has taken its toll on what was already one of the poorest nations in the Middle East.

Latin America

• Latin America Is About to Become a Priority for U.S. Foreign Policy  Foreign Policy

  Donald Trump’s second presidency seems destined to focus more attention on Latin America than any U.S. administration in perhaps 30 years, including the incoming president’s first term. The reason is straightforward: Trump’s top domestic priorities of cracking down on unauthorized immigration, stopping the smuggling of fentanyl and other illicit drugs, and reducing the influx of Chinese goods into the United States all depend heavily on policy toward Latin America.
  

• Political Risk and Resource Nationalism in Latin American Mining and Minerals  Baker Institute for Public Policy

  South American economies now figure prominently in yet a new round of natural resource pursuits, focusing attention on minerals to support technologies bundled into the “energy transition” notion, a shift from fossil fuels with broad decarbonization and “net zero” imperatives. A question is whether a better job can be done to realize and distribute economic benefits from businesses that will continue to be characterized by sharp commodity cycles and robust international competition.  The energy transition paradigm differs from past cycles in that governments and industry are under extreme pressure to demonstrate that mining and processing can also be decarbonized.  Taken all together, the energy transition minerals “rush” appears to be creating expectations that could increase political and country risk factors across the region, invoking “resource nationalism” tendencies. How resource nationalism risks are defined, how these risk factors materialize, and how they might manifest across countries distinctive in traditions and languages will drive future results. These questions are the main focus of our paper.

• Javier Milei’s Argentina in 6 Charts    Gallup

  At the one-year mark of Javier Milei’s presidency, Gallup data show that his “shock treatment” appears to be working in terms of public opinion. Argentines feel more optimistic about the economy and more confident under Milei’s government.  However, many long-standing challenges remain, and people continue to struggle to meet basic needs and have a dim view of the current job market.

•   What is the future of democracy in Colombia? Analysis of the Tensions Between the Branches of Power   Colombia Risk Analysis

  Colombia is no exception to a global context marked by a significant decline in confidence in democracy and its institutions. President Gustavo Petro, through a confrontational and alarmist narrative, has further strained the system of checks and balances. While his rhetoric aims to mobilize a social base to support his transformative political agenda, it has also generated uncertainty about institutional stability and democratic equilibrium, impacting public perception of the political system’s functionality. In this context, and with an eye toward 2026, the potential rise of new populist leaders presents an additional challenge. Such leaders often advocate for reforms that weaken institutions by diminishing their independence or capacity for action.

India

• India Will Carve Its Own Path   Foreign Affairs

  For more than a decade, the United States’ Asia policy has been consumed with one issue: the rise of China.  But China is not the only rising power in Asia. The continent is also home to India: another nuclear-armed country with a huge population, army, and economy. And like China, India has a regional reputation for hegemonic behavior. Yet the United States hardly considers the possibility that India might pose a challenge of its own. Instead, American officials have reached out to India as a partner and encouraged its rise, hoping New Delhi will amass enough power to counterbalance Beijing. They seem to want India to become a regional power, perhaps even something akin to a “third pole” in the global order.  American officials should consider a more complex strategy.  Should India acquire the heft to become, as U.S. officials hope, a true counterbalance to China, it will likely also consider itself a counterbalance to the United States. In short, a tripolar world, with India as the third pole, will not strengthen Washington’s or Beijing’s hand. Instead, it will produce a more unstable global dynamic.

• Where’s the Indian Economy Headed?    Dereck Scissors/American Enterprise Institute

  Optimism inside and outside India over the country’s economic performance is overdone. Recent quarters of fast official gross domestic product growth were accompanied by weak international competitiveness, fiscal irresponsibility, and low employment quality.  For the longer term, India’s performance is decent but far from transformative. Talk of becoming rich by mid-century clashes with being by far the poorest among large economies and catching up much slower than is possible.  The central question is why this is so. India claims a young labor force will carry it to preeminence. The labor force isn’t utilized properly, with tens of millions stuck on farms because laws discourage hiring and agricultural efficiency. This depresses export gains and investor interest. India’s demographic window is not indefinite, and its leaders are fiddling. 

The Coming Battle Over U.S. Tax and Budget Policy 

• CBO’s Analysis Shows Importance of Fiscally-Sustainable Tax Reform   Kyle Pomerleau/American Enterprise Institute

  Last week, the Congressional Budget Office (CBO) released a new macroeconomic analysis of how the expiration of the Tax Cuts and Jobs Act (TCJA)’s individual provisions impacts their baseline. They found that the expiration would result in economic output to rise in the United States by the end of the next decade. This implies that if lawmakers were to extend these expiring provisions, it would be a negative for the US economy in the long run. This analysis highlights how important it is for lawmakers to approach TCJA as an opportunity to reform the tax code in a fiscally sustainable manner.

• Principles-Based Illustrative Reforms of Federal Tax and Spending Programs  Penn Wharton Budget Model

  Expanding federal debt presents an opportunity to rethink U.S. federal fiscal policy while growing the economy and enhancing social insurance. This study offer illustrative fundamental reforms of federal tax and spending programs consistent with standard design principles that have emerged over time in the field of public economics. Specifically, the study analyze 13 major tax and spending reforms that include a full accounting of their budgetary and economic interactions, arguably one of the most ambitious computational public finance experiments performed to date.  Over the next 30 years, relative to current law, these reforms: (i) reduce federal budget deficits by 38 percent; (ii) grow the capital stock by 31 percent, GDP by 21 percent, and wages by almost 7 percent; (iii) reduce health insurance premiums by 27 percent; (iv) produce almost universal health insurance enrollment along with improvements in average health and productivity; (v) reduce old-age poverty; and (vi) reduce carbon emissions, relative to current law. These changes improve the welfare of many current and all future generations, especially future lower-income households who gain the equivalent of $300,000 in lifetime value from the reforms.

The Global Week Ahead

The Implications of Syria’s Assad Regime Stunningly Collapse, What Next for South Korea? Why Romania’s Election Crisis Matters to Markets, And A Big Week for Central Banks.

There is an old saying that in life, there are weeks when nothing happens. and then there are weeks when decades happen.  This has been one of those weeks, and the fallout will likely be felt for a long time.  First, the more than 50-year despotic Assad Dynasty in Syria has collapsed, suddenly and significantly reshaping the Middle East.

It all happened in less than two weeks. when rebels launched a surprise, lightning-fast offensive from northwestern Syria, stunning the Syrian Army. While we will be writing a more in-depth analysis of what this means for markets, we would two initial market-impactful implications:  

First, aside from Bashar Assad, the biggest losers here are Iran and Russia.  Iran spent decades carving out a “Shia Crescent” from Iran’s border through Syria and into Southern Lebanon, giving them direct access to the Mediterranean.  Now, with Israel effectively destroying Hezbollah in Lebanon and Assad’s defeat, Iran has now lost this strategic pathway.

Moreover, we would note there have been numerous reports Israel has taken advantage of the situation and has spent the last 24 hours destroying every major military airfield, military radar facilities, and anti-aircraft capability in Syria, depriving Iran of their first line of defense against Israel.  Now, if Iran were again attacking Israel, forcing Israel to retaliate or, more significantly, if Israel wants to go after Iran’s nuclear weapons facilities or oil production facilities, Israel now has a clear path of attack, which they have never had before.

For Russia, Assad’s defeat is a major strategic loss:  Syrian rebels have demanded Russia withdraw from their prized naval base in Tartus (which, as of this writing, it appears they are doing) as well as evacuate all ground forces inside Syria who have been supporting Assad.  The loss of the Tartus port is stunning for Russia, as the Russian Navy only has two warm-water naval ports, one in Crimea and the facilities in Tartus. 

Second, the true intentions of the Syrian rebels are confusing and to many experts, worrisome. Rebel forces are led by Abu Mohammad al-Jolani, a former member of Al Qaeda who was captured by USS forces in Iraq and who spent five years in a US prison in Iraq.  After being released, he went to Syria to fight in the Syrian Civil War, establishing Al Queda’s Syrian branch.  He and his forces, Hayat Tahrir al-Sham, eventually broke with Al Qaeda and professes to be more moderate now.  Joining al-Jolani are Kurdish forces (whom US Special Forces have been assisting on the ground for a number of years).  But has al-Jolani and his group truly moderated themselves?  Or are we about to see Syria become the new Afghanistan, led by a radical Islamist organization while being riven by internal fighting among various other factions?  

While all this is going on, several other nations were and continue to be dealing with internal crisis’, most notably South Korea and Romania.  In South Korea, President Yoon Suk Yeol created a political crisis last week by briefly declaring martial law.  He was forced to retract it soon after, but politicians and citizens are demanding he resign and face criminal charges.  We expect Yoon to step down soon but there remain many questions as to what led to him declaring martial law and what happens next to this critical Asian democracy.

Meanwhile, in Romania, the nation’s top court annulled a recent first-round presidential vote which was won by a far-right candidate, Calin Georgescu, who is seen as aligned with Moscow.  The significance of this for markets is Romania is both a member of the EU and NATO and is now facing potential civil strife until a new election can be held.  The Romanian Intelligence Service and Interior Ministry released files last week showing significant “foreign interference” – e.g., Russian – in the election which led to the Constitutional Court annulling the election.  Among the findings was declassified evidence that, among other things,  Tiktok – which Georgescu used extensively to campaign – had given his campaign massive preferential treatment over the other candidates.  The second-round vote was scheduled for today – Sunday – but the court order effectively canceled it.

We would also note Georgia is undergoing similar troubles as evidence emerged of significant Russian interference in their October 26th election which has led the newly elected Prime Minister, Irakli Kobakhidze, to announce he was discontinuing talks with the EU about Georgia joining – despite the Georgian Constitution having enshrined in it the goal of joining the EU.

Looking at the global economic radar screen for the coming week, it is going to be a big week for central banks.  The European Central Bank, the Reserve Bank of Australia, the Central Bank of Brazil, the Reserve Bank of Canada, and the Swiss Central Bank all meet this week to set interest rates – a week before the U.S. Federal Reserve meets on interest rates.  Markets will be closely attuned to where rates are set and any indication of how the Fed may act in concert – or not.

In the U.S. this coming week, the CPI print comes out on Wednesday and the PPI is out on Thursday.   In Asia, the Bank of Japan’s Tankan Survey is out Friday – which is closely watched by the Bank of Japan – and in China, inflation figures are out on Monday and trade data is out on Tuesday. 

Moving to Europe, the UK GDP and consumer confidence reports are out on Friday. 

Below are all the other major events and reports we are watching closely in the coming week:

Sunday, December 8, 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 –

·       Today is Constitution Day in Uzbekistan, a national holiday.

Economic Reports/Events –

·       Japan Foreign Exchange Reserves (November)

Europe

Political/Social Events –

·       Romania was scheduled to hold a presidential election run-off.  However, late last week the Romanian Supreme Court ruled the election was invalid due to foreign interference and has ordered new elections.

·       Notre-Dame Cathedral official reopens to the public after a catastrophic fire five years ago.

Economic Reports/Events –

·       Euro Area Eurogroup Meeting

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia GDP Growth Rate Q3

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Monday, December 9, 2024

Global

·       The BRICS holds the Seminars on Institutional Development Issues in Moscow.

Americas

Political/Social Events –

·       The OECD releases its Latin America Outlook.

·       The Wall Street Journal holds its annual CEO Summit in Washington and continues through December 10.  A number of Fortune 100 CEOs along with members of Congress and Treasury Secretary Janet Yellen will speak.

Economic Reports/Events –

·       Chile Imports/ Exports/ Balance of Trade (November)

·       Mexico Inflation Rate (November)

·       USA Wholesale Inventories (October)/ Consumer Inflation Expectations (November)

·       Brazil BCB Focus Market Readout

Asia

Political/Social Events –

·       International Atomic Energy Agency officials and international experts arrive in Japan for a review of the safety and regulatory aspects of the discharge of ALPS-treated water from the Fukushima Daiichi Nuclear Power Plant into the sea

Economic Reports/Events –

·       Japan Current Account (October)/ Bank Lending (November)/ GDP Capital Expenditure Q3/ GDP Price Index Q3

·       Australia Building Permits (October)/ Private House Approvals (October)

·       Philippines Foreign Direct Investment (September)

·       China Inflation Rate (November)/ PPI (November)

·       Indonesia Consumer Confidence (November)

·       Thailand Consumer Confidence (November)/ Foreign Exchange Reserves (November)

·       Malaysia Unemployment Rate (October)

·       Taiwan Imports/ Exports/ Balance of Trade (November)

·       Singapore Foreign Exchange Reserves (November)

·       Pakistan Consumer Confidence (November)

Europe

Political/Social Events –

·       French President Emmanuel Macron is expected to announce a new Prime Minister following the French Parliament’s no confidence vote last week which forced Prime Minister Michel Barnier to step down.

·       Large protests by European farmers are expected in Brussels following the EU reaching a deal with Mercosur last week.   Meanwhile, in France, French train, dock, and public sector workers will hold a series of strikes.

·       The Netherlands will impose border controls for six months to limit migration.

·       The Eurogroup meets in Brussels. Ministers will review current macroeconomic development and exchange views with the IMF on euro area policies.  Ministers will also discuss the overall budgetary situation and prospects in the euro area and review the economic and fiscal situation of the euro area member states.

·       The EU Agriculture and Fisheries Council will meet through December 10.  The Council will aim to reach a political agreement on two Commission proposals on fishing opportunities. These are the proposal covering fishing opportunities in the Atlantic and the North Sea for 2025 and, in the case of some stocks, also for 2026, and the proposal on fishing opportunities for 2025 in the Mediterranean and the Black Seas.

Economic Reports/Events –

·       Bank of England Deputy Governor for Markets and Banking Dave Ramsden will give a speech at OMFIF in London on financial stability and the Bank of England’s toolkit.

·       Ireland Construction PMI (November)/ Industrial Production (October)/ Inflation Rate (November)

·       Slovakia Balance of Trade (October)

·       Switzerland Consumer Confidence (November)

·       Russia Vehicle Sales (November)

Middle East

Political/Social Events –

·       Israeli Prime Minister Benjamin Netanyahu is expected to testify at his corruption trial.  He was scheduled to testify last week but it was delayed until this week. 

·       Egyptian President Abdel Fattah al-Sisi visits Norway.

Economic Reports/Events –

·       Egypt Inflation Rate (November)

·       Qatar Balance of Trade (October)/ Inflation Rate (October)

Africa

Political/Social Events –

·       The 23rd International Economic Forum on Africa 2024 will take place in Paris.

·       Tanzania celebrates Independence Day, a national holiday.

Economic Reports/Events –

·       Nigeria Balance of Trade (July)/ (August)/ (September)

·       Mozambique Inflation Rate (November)

Tuesday, December 10, 2024

Global

·       UN Security Council meets to discuss the situation in the Democratic Republic of Congo. Later they will discuss the situation in Gaza.

·       The World Agricultural Supply and Demand Estimates (WASDE) monthly report is released.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Brazil Inflation Rate (November)

·       Mexico Consumer Confidence (November)

·       USA Nonfarm Productivity Q3/ Unit Labour Costs Q3/ Redbook (December/07)/ WASDE Report/ API Crude Oil Stock Change (December/06)

·       El Salvador PPI (November)

Asia

Political/Social Events –

·       Japan's Nihon Hidankyo, an organization that represents survivors of the atomic bombings in Hiroshima and Nagasaki, receives the Nobel Peace Prize as official award ceremonies get underway in Oslo and Stockholm. The literature prize will be awarded to "The Vegetarian" author Han Kang from South Korea.

Economic Reports/Events –

·       Reserve Bank of Australia Interest Rate Decision/Australia NAB Business Confidence (November)

·       Philippines Imports/ Exports/ Balance of Trade (October)

·       Indonesia Retail Sales (October)

·       Malaysia Industrial Production (October)

·       Japan Eco Watchers Survey Current & Outlook (November)/ Machine Tool Orders (November)

Europe

Political/Social Events –

·       The EU Economic and Financial Affairs Council will meet.  Ministers will be informed of the progress of work within the Council on proposals to reform the EU’s customs legislation. The presidency will provide the information based on a presidency progress report.

Economic Reports/Events –

·       Netherlands Inflation Rate (November)/ Manufacturing Production (October)

·       Germany Inflation Rate (November)

·       Romania Balance of Trade (October)

·       Turkey Industrial Production (October)/ Unemployment Rate (October)/ Participation Rate (October)

·       Hungary Inflation Rate (November)

·       Slovakia Industrial Production (October)

·       Italy Industrial Production (October)

·       Slovenia Industrial Production (October)

·       Greece Industrial Production (October)/ Inflation Rate (November)

·       Belarus Inflation Rate (November)

·       Ukraine Inflation Rate (November)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia Industrial Production (October)

·       Jordan Inflation Rate (November)

·       Israel Consumer Confidence (November)

Africa

Political/Social Events –

·       The 2024 UNESCO Forum on Higher Education in Africa will take place in Nairobi.

Economic Reports/Events –

·       South Africa Gold Production (October)/ Mining Production (October)/ Manufacturing Production (October)

·       Tanzania Inflation Rate (November)

Wednesday, December 11, 2024

Global

·       UN Secretary-General António Guterres will travel to South Africa to meet with President Cyril Ramaphosa.  They will discuss global and regional issues, especially South Africa’s G20 Presidency (which they hold in 2025).  On Thursday, Guterres will head to Lesotho. He will be meeting with His Majesty King Letsie III, as well as the Prime Minister and other officials. While there, he is scheduled to address the Parliament as Lesotho celebrates the bicentenary of the Basotho nation.

·       IMF managing director Kristalina Georgieva will take part in a fireside chat at the Reuters NEXT conference in New York.

·       The OPEC monthly report is released.

Americas

Political/Social Events –

·       U.S. Secretary of State Antony Blinken will testify before the House Foreign Affairs Committee on the withdrawal from Afghanistan.

·       Today is the deadline for U.S. governors to certify their states’ presidential election results and prepare seven Certificates of Ascertainment, one of which must be sent to the archivist and six of which will be used by electors for electoral votes.

Economic Reports/Events –

·       USA MBA Mortgage Market Index (December/06)/ MBA Purchase Index (December/06)/ Inflation Rate (November)/ CPI (November)/ EIA Crude Oil & Gasoline Stocks Change (December/06)/ Monthly Budget Statement (November)

·       Brazil Car Production (November)/ New Car Registrations (November)/ Business Confidence (December)/ Brazil Central Bank Interest Rate Decision

·       Bank of Canada meets to discuss and decide Interest Rates.  A press conference follows.

·       Colombia Consumer Confidence (November)

·       Argentina Inflation Rate (November)

·       Peru Balance of Trade (October)

Asia

Political/Social Events –

·       In Beijing, the Chinese Central Economic Work Conference meets. The two-day meeting, held behind closed doors and highly anticipated by markets, is expected to shape the country's growth goals and stimulus plans for 2025.

·       The Asian Development Bank (ADB) releases its latest regional economic outlook after its September report projected "developing Asia" -- comprising 46 ADB members, including China and India -- would post economic growth of 5.0% this year and 4.9% in 2025.

·       Japan hosts SEMICON Japan in Tokyo.  More than 1000 companies and organizations will be showing their wares at 3-day conference.

Economic Reports/Events –

·       New Zealand Manufacturing Sales Q3

·       Japan Reuters Tankan Index (December)/ BSI Large Manufacturing Q4/ PPI (November)

·       South Korea Unemployment Rate (November)

·       Australia RBA Chart Pack

·       Malaysia Retail Sales (October)

·       India M3 Money Supply (November/29)

·       Kazakhstan PPI (November)

Europe

Political/Social Events –

·       German Chancellor Olaf Scholz and Ukrainian Prime Minister Denys Shmyhal hold opening remarks at the 7th German-Ukrainian Economic Forum in Berlin.

·       Switzerland’s parliament will elect a new president.

·       French railway workers are planning to go on strike over efforts to privatize the railroad.

Economic Reports/Events –

·       Romania Inflation Rate (November)

·       Turkey Retail Sales (October)/ Auto Production (November)/ Auto Sales (November)

·       Slovakia Construction Output (October)

·       Russia Inflation Rate (November)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Jordan Inflation Rate (November)

Africa

Political/Social Events –

·       Today is Republic Day in Burkina Faso, a national holiday.

·       Madagascar holds local elections.

Economic Reports/Events –

·       South Africa Inflation Rate (November)/ Retail Sales (October)

Thursday, December 12, 2024

Global

·       The UN Security Council meets to discuss the situation in Yemen.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       USA NFIB Business Optimism Index (November)/ Initial Jobless Claims (December/07)/ PPI (November)/ EIA Natural Gas Stocks Change (December/06)/ 15- & 30-Year Mortgage Rate (December/11)/ Fed Balance Sheet (December/11)

·       Brazil Retail Sales (October)

·       Mexico Inflation Rate (November)/ Industrial Production (October)

·       Canada Building Permits (October)

·       Uruguay Industrial Production (October)/ GDP Growth Rate Q3

·       Peru Interest Rate Decision

Asia

Political/Social Events –

·       Today is Constitution Day in Thailand, a national holiday.

Economic Reports/Events –

·       New Zealand Electronic Retail Card Spending (November)

·       Japan Foreign Bond Investment (December/07)/ Stock Investment by Foreigners (December/07)

·       Australia Employment Change (November)/ Unemployment Rate (November)/ Participation Rate (November)

·       Hong Kong Industrial Production Q3

·       Taiwan Interest Rate Decision

·       India Industrial Production (October)/ Manufacturing Production (October)/ Inflation Rate (November)

Europe

Political/Social Events –

·       The EU Justice and Home Affairs Council (Home Affairs) will meet. Ministers will discuss he adoption of the Council decision setting the date for the lifting of checks on persons at the internal land border with and between Bulgaria and Romania on the agenda of the meeting of ministers. Both countries already fully apply Schengen rules from 31 March 2024. Internal air and maritime border controls with Bulgaria and Romania have also been lifted from that date.

Economic Reports/Events –

·       The European Central Bank Governing Council meets to discuss and decide interest rates.  A press conference will follow.

·       Netherlands Balance of Trade (October)

·       Turkey Current Account (October)/ Foreign Exchange Reserves (December/06)

·       Great Britain RICS House Price Balance (November)/ GDP (October) / Goods Trade Balance (October)/ Industrial Production (October)/ Manufacturing Production (October)/ Balance of Trade (October)/ Construction Output (October)/ NIESR Monthly GDP Tracker (November)

·       Switzerland SNB Interest Rate Decision

·       Ireland Inflation Rate (November)

·       Serbia Inflation Rate (November)/ Interest Rate Decision

·       Ukraine Interest Rate Decision

·       Germany Current Account (October)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Imports/ Exports/ Balance of Trade (November)

Africa

Political/Social Events –

·       South African President Cyril Ramaphosa will host his Angolan counterpart João Lourenço on a state visit to solidify relations between the two countries who share deep historical ties.

Economic Reports/Events –

·       South Africa Inflation Expectations Q4/ PPI (November)/ Building Permits (October)/ SACCI Business Confidence (October)/ SACCI Business Confidence (November)

·       Angola Inflation Rate (November)

·       Ethiopia Inflation Rate (November)

Friday, December 13, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Brazil IBC-BR Economic Activity (October)

·       Canada Capacity Utilization Q3/ New Motor Vehicle Sales (October)/ Manufacturing Sales (October)/ Wholesale Sales (October)

·       USA Import Prices (November)/ Export Prices (November)/ Baker Hughes Total Rigs Count (December/13)

·       Paraguay Balance of Trade (November)

·       Peru Unemployment Rate (November)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea Export Prices (November)/ Import Prices (November)

·       New Zealand Business NZ PMI (November)/ Visitor Arrivals (October)

·       Australia Westpac Consumer Confidence Index (December)

·       Japan Tankan Large All Industry Capex Q4/ Tankan Large Manufacturers Index Q4/ Tankan Small Manufacturers Index Q4/ Capacity Utilization (October)/ Industrial Production (October)

·       Singapore Unemployment Rate Q3

·       India Bank Loan Growth (November/29)/ Deposit Growth (November/29)/ Foreign Exchange Reserves (December/06)

·       China New Yuan Loans (November)/ M2 Money Supply (November)/ Outstanding Loan Growth (November)/ Total Social Financing (November)

Europe

Political/Social Events –

·       Italian Prime Minister Giorgia Meloni will meet with Palestinian National Authority President Mahmoud Abbas in Rome.   Abbas will also meet with Pope Francis.

·       The EU Justice and Home Affairs Council (Justice) will meet.  Ministers will discuss a general approach (member states position) on a proposed directive which lays down minimum rules to prevent migrant smuggling. The law would replace the current EU legal framework which dates back to 2002. The objective of the proposal is to bring member states criminal law on issues such as the definition and sanctioning of migrant smuggling closer together. Ministers are aiming to settle on a member state position on a proposal to update the 2011 directive to strengthen criminal law on child sexual abuse and sexual exploitation. The goal of the update, proposed in February 2024 by the European Commission, is to expand the definitions of the offences of sexual abuse and sexual exploitation of children and to ensure more effective investigation and prosecution of these crimes. Finally, they will discuss a partial general approach on key elements of a proposal for a directive to harmonize certain aspects of insolvency law. The proposal is one of the initiatives of the 2020 Capital Markets Union action plan. It aims at encouraging cross-border investment within the single market through targeted harmonization of insolvency proceedings.

Economic Reports/Events –

·       Great Britain GfK Consumer Confidence (December)

·       Germany Imports/ Exports/ Balance of Trade (October)

·       Romania Industrial Production (October)/ Current Account (October)

·       Hungary Construction Output (October)/ Industrial Production (October)

·       France Inflation Rate (November)

·       Slovakia Inflation Rate (November)

·       Spain Inflation Rate (November)

·       Poland Inflation Rate (November)/ Balance of Trade (October)/ Current Account (October)

·       Euro Area Industrial Production (October)

·       Greece Construction Output Q3

·       Ukraine Balance of Trade (October)

·       Russia GDP Growth Rate Q3

Middle East

Political/Social Events –

·       Iran is set to impose harsher dress codes that would ban women from wearing tight clothing and outfits that expose the body below the neck or above the ankles and forearms. The hardline parliament approved the new edict despite opposition from reformist President Masoud Pezeshkian, and two years after earlier dress codes sparked protests. 

Economic Reports/Events –

·       Oman M2 Money Supply (October)/ Total Credit (October)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Saturday, December 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 –

·       The South Korean opposition in the parliament are planning to attempt to move an impeachment vote against President Yook Suk Yeol unless he steps down.  This comes after he declared martial law last week.   However, South Korean ruling party leaders have announced Yoon will be stepping down soon in an “orderly, early” way.

·       Tokyo-based startup Space One is set to launch its Kairos rocket from western Japan, less than a year after its first attempt ended in failure. A successful launch this time would make it the first private venture in Japan to put a satellite into orbit. The company's backers include Canon Electronics and rocket-engine maker IHI.

Economic Reports/Events –

·       China FDI (YTD) (November)/ Vehicle Sales (November)

Europe

Political/Social Events –

·       Georgia holds presidential elections which are sure to be highly contentious.  Georgia has been rocked by protests after the Georgian Prime Minister, Irakli Kobakhidze, announced the government will suspect talks on EU accession despite the goal of joining is written into the country’s constitution.   The President of Georgia, Salome Zourabichivili, has said the October 26th parliamentary elections were fraudulent with heavy interference from Russia – and therefore, illegitimate.  Kobakhidze, by saying the Parliament is illegitimate and as the parliament elects the president, has said she will not recognize the outcome and stand-down.   

·       Italian Prime Minister Giorgia Meloni will meet with Lebanese Prime Minister Najib Mikati in Rome to discuss the situation in southern Lebanon.

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, December 15, 2024

Global

·       The UN Internet Governance Forum begins in Riyadh, Saudi Arabia and goes through December 19.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       The 3rd China Indian Ocean Region Forum on Blue Economy Development Cooperation meets in Kunming, China.  clean energy, climate change response, disaster reduction on the agenda among other topics,

Economic Reports/Events –

·       Australia Judo Bank Manufacturing, Composite & Services PMI Flash (December)

·       Japan Jibun Bank Manufacturing, Composite & Services PMI Flash (December)/ Tertiary Industry Index (October)

Europe

Political/Social Events –

·       The U.K. officially joins the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as the 12th member of the Asia-Pacific trade bloc. The general agreement removes trade tariffs between member countries and sets rules on matters such as cross-border investment, e-commerce, intellectual property and labor. 

Economic Reports/Events –

·       Germany HCOB Composite & Services PMI Flash (December)

·       Great Britain S&P Global Manufacturing, Composite & Services PMI Flash (December)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Inflation Rate (November)/ M1 Money Supply (November)

·       Saudi Arabia Inflation Rate (November)/ Wholesale Prices (November)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

U.S. Financial Regulatory Week Ahead

The CFPB Orders the Supervision of Google, Paul Atkins Nominated for SEC Chair, the FSOC Meets One Last Time in 2024, and Treasury Gets Ready to Hold the 2024 Outbound Investment Security Conference

December 9 - 13, 2024

The Trump Transition keeps racing ahead as President-elect Trump made multiple nominations in the last week (by historical comparison, Trump is moving close to five times faster nominating his team than President Biden did in 2020, and four times faster than President Obama did in 2009).  And the President-elect made his first major regulatory nomination by choosing Paul Atkins to serve as Chair of the Securities and Exchange Commission – a move cheered by the markets and a number of members of Congress from both sides of the aisle (full disclosure: Paul has been a friend for 30 years going back to when we served at the SEC together in the early 1990s). 

Meanwhile, while most regulatory agencies are winding down their activities, the Consumer Financial Protection Bureau (CFPB) seems to be ramping up its work.  On Friday, the CFPB placed Google Payment Corporation under its supervisory authority – a designation puts the tech company on the level of monitoring and oversight that banks do.  Google is going to fight the designation – stand by because this is going to become a major battle in Washington in 2025.

Also this past week, the Financial Stability Oversight Council met (once again not giving any public notice in advance).  The agenda, according to a readout press release, included:

“an update from Treasury and Federal Reserve Bank of New York staff on recent hedge fund market developments, including the recent growth of overall leverage across the industry. Staff also described regulators’ efforts to improve counterparty credit risk management practices at supervised institutions that provide financing to hedge funds, and presented on potential policy responses to mitigate identified risks.    

The Council also received a presentation from staff of Treasury, the National Association of Insurance Commissioners, and the Board of Governors of the Federal Reserve System on developments in the life insurance sector, including affiliations with offshore reinsurers and private equity firms, and regulators’ ongoing efforts to enhance the sector’s resilience. 

In addition, the Council received an update from member agency staff and a Ginnie Mae senior official on how vulnerabilities in the nonbank mortgage servicing sector have evolved since the Council issued its Report on Nonbank Mortgage Servicing in May 2024. Staff also described efforts by states and federal agencies to implement the recommendations in the Council’s report.”

Finally, we would note that this coming week the Treasury Department will be holding its 2024 Outbound Investment Security Conference.  The event will allow Treasury officials along with State Department officials to discuss the newly created regulatory regime for outbound investment in critical industries.  

Below are all the other events of note happing in the financial regulatory world in the coming week.  Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

·       Wednesday, December 11, 9:45 a.m. – The Senate Banking Committee will hold a hearing entitled “Consumer Protection: Protecting Workers’ Money and Fighting for the Dignity of Work.”  Consumer Financial Protection Bureau Director Rohit Chopra will testify. 

-       The Committee will also go into executive session and vote on the nominations of Caroline Crenshaw to be re-confirmed as an SEC Commissioner and Gordon Ito to be a member of the Financial Stability Oversight Council.

·       Wednesday, December 11, 10:00 a.m. – The Senate Budget Committee will hold a hearing entitled “Sounding the Alarm: Pathways and Possible Solutions to the U.S. Fiscal Crisis."

House of Representatives

·       There are no significant events scheduled at this time.

Federal Department & Regulatory Agency Meetings & Events

Federal Reserve Board and Federal Reserve Banks

·       There are no Federal Reserve Board Governor speeches or events scheduled as the Fed goes into its “Quiet Period” in advance of the December 18-19 Federal Open Market Committee meeting.

U.S. Treasury Department

·       Monday, December 9, 1:00 p.m. – The Treasury Department will hold the 2024 Outbound Investment Security Conference. 

·       Thursday, December 12, 9:00 a.m. – the Treasury Department’s Federal Advisory Committee on Insurance will meet virtually.   The agenda includes Climate-related financial risk and the insurance sector, Cyber insurance developments and international insurance issues, Receiving status updates from each of its subcommittees and from FIO on its activities.

Department of Commerce

·       There are no significant events scheduled at this time.

Department of Housing and Urban Development

·       There are no significant events scheduled at this time.

Small Business Administration

·       There are no significant events scheduled at this time.

Securities and Exchange Commission

·       Monday, December 9, 9:00 a.m. – SEC Commissioner Mark Uyeda will speak at the American Institute of Certified Public Accountants (AICPA) annual conference on current SEC and PCOAB Developments in Washington, D.C. 

·       Tuesday, December 10, 10:00 a.m. – SEC Investor Advisory Committee meets. You can see the full agenda HERE.

·       Wednesday, December 11 – SEC Commissioner Hester Pierce will give a speech at the Competitive Enterprise Institute annual summit entitled “Woke Capital and ESG (Environmental, Social and Governance)”

·       Thursday, December 12, 2:00 p.m. – The SEC will hold a Closed Meeting.

Commodities Futures Trading Commission

·       Monday, December 9, 1:55 p.m. – CFTC Commissioner Summer K. Mersinger and SEC Commissioner Mark T. Uyeda will participate in the Financial Regulators Leading in the Digital Age fireside chat at Wharton’s Future of Finance Forum in Philadelphia, Pennsylvania.

·       Tuesday, December 10, 9:30 a.m. – The CFTC Market Risk Advisory Committee will meet.  You can see the full agenda HERE.

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.

FINRA

·       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 Wagner Labor Initiative in New York.

·       Thursday, December 12, 10:00 a.m. – the Board of the Farm Credit Administration meets.  The scheduled agenda will cover the Quarterly Report on Economic Conditions and Farm Credit System Condition and Performance as well as the Semiannual Report on Office of Examination Operations.

Farm Credit Insurance Corporation

·       Wednesday, December 11, 10:00 a.m. – the Board of Directors of the Farm Credit System Insurance Corporation will meet. 

International Monetary Fund & World Bank

·       Wednesday, November 11, 9:00 a.m. – International Monetary Fund Managing Director Kristalina Georgieva delivers keynote remarks at the Reuters Next Summit.

North American Securities Administrators Association

·       There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

·       Monday, December 9, 9:00 a.m. – The American Institute of Certified Public Accountants (AICPA) holds its annual conference.  SEC Commissioner Mark Uyeda will speak.

·       Monday, December 9, 10:00 a.m. – The Institute of International Finance holds a joint international bank regulation colloquium with the Bank Policy Institute (BPI) in New York (by invitation only).

Think Tanks and Other Events

·       Wednesday, December 11 – The Competitive Enterprise Institute holds its annual summit.  SEC Commissioner Hester Pierce will deliver remarks entitled “Woke Capital and ESG (Environmental, Social and Governance)”

·       Wednesday, December 11, 9:00 a.m. – The Peterson Institute for International Economics will hold a event entitled “Bpifrance's experience of promoting high-growth firms” (Bpifrance is a French government-owned promotional bank that was established in 2012 to support the development of high-growth French firms.)

·       Wednesday, December 11, 1:00 p.m. – The Peterson Institute for International Economics holds a book launch event entitled “The Central Bank as Crisis Manager”

·       Thursday, December 12, 9:00 a.m. – The Farm Foundation holds a virtual forum, beginning at 9 a.m., on "Tax Year 2025: Potential Impacts and Opportunities for Farmers and the Agriculture Sector."

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

Recommended Weekend Reads

What The Trump Tariffs May Mean for Latin America, Why Syria Matters So Much to Russia, China’s Irreversible Demographic Crisis, and Why Javier Milei Has Surprised Almost Everyone

December 6 - 8, 2024

Latin America

• ·What Would Trump’s Tariff Proposals Mean for U.S. Trade With Latin America? Americas Society

  President-elect Trump’s proposed tariffs could mean big changes for industries in and outside the United States, North America's supply chains, and U.S. trade partners in Latin America. The United States has six free trade agreements in effect with 11 Latin American countries. The region is home to some of the country’s largest sources of imports, including its biggest trade partner, Mexico. These potential trade barriers could become a sticking point when it comes to the scheduled 2026 review of the United States-Mexico-Canada Agreement (USMCA). What could these tariffs mean for the United States’ trade partners in Latin America?

• Ending the Strategic Vacuum: A U.S. Strategy for China in Latin America Center for Strategic & International Studies

  The alarm bells are ringing in Latin America. Chinese president Xi Jinping’s recent visit to Latin America caps off a decade of remarkable advances for China in the United States’ shared neighborhood. Both Xi and President Biden attended the Asia-Pacific Economic Cooperation (APEC) forum in Lima, Peru. Both then traveled to Brazil for the G20 Summit meeting. The public imagery of the two meetings said a lot about China’s advance in Latin America with little to no U.S. pushback.

• The Price of Neglecting Latin America: Guns, Drugs, and Migration have Destabilized the Region – and Fed Dysfunction in Washington Foreign Affairs

  Backlash to the post-2020 spike in undocumented immigration from Latin America weighed strongly in Donald Trump’s favor. He made “closing the border” and the “largest deportation program in American history” centerpieces of his campaign, and voters rewarded him for it. Immigration turned out Trump’s base and was neck and neck with inflation in pushing swing voters to cast their ballots for him. But mass migration to the United States would not exist in its post-2020 proportions if Latin America’s economically diversified crime groups, and the states with which they have fused, were not pushing millions of people to flee north.

• Javier Milei Has Surprised Almost Everybody Americas Quarterly

  Milei’s successes were undeniable. He had beaten the budget into submission, slayed inflation, and did so without igniting social unrest or setting off a paralyzing brawl with organized labor. Inflation, driven by overspending and the wild printing of pesos, had dropped from 25% a month in December to below 3% per month today. The government now spends less than it takes in from taxes. “Country risk,” a measure of bond prices, is at a five-year low, meaning investors are confident they will be repaid. Milei’s radical economic policies hardly cost him public support. In his inaugural address, he warned that “there is no alternative to shock” and a year later, most Argentines apparently agree. In the November Poliarquía survey, Milei registered a 56% approval rating, the exact level of support he attracted in the election. Consumer confidence is rising. There have been several national strikes by confederations of labor unions and two multitudinous protests against spending cuts at public universities. But generally, Argentines are calmly sipping mate.

• State capacity, mining and community relations in Peru Chatham House

  With its rich reserves of copper, Peru is poised to play a key role in global supply chains for projects to reduce carbon emissions and enable the transition to a green economy. However, the polarized nature of Peruvian politics is a significant obstacle to realizing this potential. Political instability and the steady turnover of ministers and civil servants in relevant ministries over recent years have affected the capacity of the Peruvian state to promote an inclusive national vision for its mining industry. At the same time, fragmentation among political parties has hampered the capacity of the political system to represent consistent and coherent policy interests.

Syria and the Greater Middle East

• Why Syria Matters to the Kremlin The Atlantic

  As consuming as the war in Ukraine has been for Russia, the Kremlin does not see it as superseding its Middle East ambitions. That’s because Syria is not just a military outpost. It is a cornerstone of Russia’s claim to great-power status, a theater where it can demonstrate its diplomatic reach and its counternarrative to Western interventionism. This explains why Russia continues to invest in Syria even as it fights a costly war in Ukraine. Moscow may adjust its tactics, but abandoning Syria would mean surrendering something far more precious than territory: Russia’s hard-won position as an indispensable power broker in the Middle East.

China’s Demographic Crisis

• ·Is China’s population crisis irreversible? South China Morning Post

  In a new six-part series, the Post examines how China’s marriage and fertility rates remain on a downward trajectory, fueling a demographic crisis that threatens the nation’s economic and social stability. In this six-part series, we examine the far-reaching consequences of a shrinking and ageing population, from the rise of a “companionship economy” to the challenges faced by the “one-child generation” and the economic risks associated with losing the demographic dividend.
  

• Xi Jinping Doesn’t Have an Answer for China’s Demographic Crisis Foreign Policy

  Chinese President Xi Jinping’s recent article in Qiushi, the Communist Party’s flagship journal for outlining core ideology and policy, frames China’s demographic challenges as a strategic opportunity. It offers Xi’s most detailed vision yet for addressing the country’s aging population: shifting from a labor-intensive, population-driven economy to one powered by innovation, education, and productivity. Yet beneath the lofty rhetoric lies a familiar and contentious concept: renkou suzhi, or “population quality.” On the surface, it advocates for cultivating a healthier, better-educated, and more skilled population. But its implications run deeper—and are more divisive. Historically, suzhi has been used to draw lines between urban elites and rural or migrant populations, carrying connotations of class bias and, at times, embracing eugenicist thinking. Implicit in calls for a “high-quality population” is the judgment of a “low-quality” counterpart, reinforcing societal divides in a way that is rarely acknowledged outright.

Geo-economics, AI, and Trade Policy

• The Rapid Adoption of Generative AI Alexander Bick, Adam Blandin & David J. Deming/National Bureau of Economic Research

  Generative Artificial Intelligence (AI) is a potentially important new technology, but its impact on the economy depends on the speed and intensity of adoption. This paper reports results from the first nationally representative U.S. survey of generative AI adoption at work and at home. In August 2024, 39 percent of the U.S. population age 18-64 used generative AI. More than 24 percent of workers used it at least once in the week prior to being surveyed, and nearly one in nine used it every workday. Historical data on usage and mass-market product launches suggest that U.S. adoption of generative AI has been faster than adoption of the personal computer and the internet.

• Semiconductors and Modern Industrial Policy Chad Brown & Dan Wang/American Economic Association

  Abstract: Semiconductors have emerged as a headline in the resurgence of modern industrial policy. This paper explores the political economic history of the sector, the changing nature of the semiconductor supply chain, and the new sources of concern that have motivated the most recent turn to government intervention. It also explores details of that turn to industrial policy by the United States, China, Japan, Europe, South Korea, and Taiwan. Modern industrial policy for semiconductors has included not only subsidies for manufacturing, but also new import tariffs, export controls, f

U.S. Financial Regulatory Week Ahead

Washington’s Regulatory World Continues to Get Quieter and Quieter; Elon Musk Wants to “Delete” The CFPB

December 2 - 6, 2024

There really is not much going on in the regulatory world this coming week.  Some Fed Governor speeches, a couple of fireside chats with SEC Chair Gary Gensler, and a House Financial Services Committee hearing on the future of technology and the future of finance sum it all up.

Last week (on Friday, when we were all recovering from our Thanksgiving feasts), there was an unannounced Financial Stability Oversight Council (FSOC) meeting at the Treasury Department.  Why they held it on an otherwise sleepy Thanksgiving Friday is anyone’s guess.  According to the post-meeting press release, “the preliminary agenda for the executive session includes an update on the Council’s Hedge Fund Working Group; a presentation on the life insurance sector; and an update on the Council’s Nonbank Mortgage Servicing Task Force.  The preliminary agenda for the open session includes the Council’s 2024 annual report.”

Elsewhere, President-elect Trump’s friend and confidant, Elon Musk – who is co-chairing the President’s so-called “Department of Government Efficiency” (DOGE) tweeted out, “Delete the CFPB [Consumer Finance Protection Bureau]  There are too many duplicative regulatory agencies.”   We will see how that turns out when Musk and his co-chair, Vivek Ramaswamy, get rolling on DOGE.  And we are sure Congress (starting with Senator Elizabeth Warren (D-MA), who almost single-handedly created the agency) will have much to say – pro and con – if the duo includes eliminating the CFPB.

Finally, we would note—as we noted last week—that the Great Washington Parlor Game of Who Gets What Presidential Nomination continues apace. Just before Thanksgiving, there were numerous reports that President-elect Trump was on the verge of nominating former Securities and Exchange Commissioner Paul Atkins as the next Chair of the SEC. We expect a number of financial regulatory nominations will be made in the coming week. 

Below is all we see happening in the coming week.  Please let us know if you have any questions.

see happening in the coming week.  Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

·       There are no significant events scheduled at this time.

House of Representatives

·       Wednesday, December 4, 10:00 a.m. – The House Financial Services Committee holds a hearing entitled Innovation Revolution: How Technology is Shaping the Future of Finance.

Federal Department & Regulatory Agency Meetings & Events

Federal Reserve Board and Federal Reserve Banks

·       Monday, December 2, 3:15 p.m. – Federal Reserve Board Governor Christopher J. Waller gives a speech on the economic outlook at the American Institute for Economic Research (AIER) Monetary Conference, Washington, D.C.

·       Tuesday, December 3, 12:35 p.m. – Federal Reserve Board Governor Adriana D. Kugler gives a speech on the labor market and monetary policy at a Detroit Economic Club Event with Governor Adriana Kugler, Detroit, Michigan.

·       Wednesday, December 4, 1:45 p.m. – Federal Reserve Board Chair Jerome H. Powell participated in a moderated discussion at the New York Times DealBook Summit, New York, N.Y.

·       Friday, December 6, 9:15 a.m. – Federal Reserve Board Governor Michelle Bowman delivers remarks at the Missouri Bankers Association Executive Management Conference (virtual).

U.S. Treasury Department

·       There are no significant events scheduled at this time.

Department of Commerce

·       There are no significant events scheduled at this time.

Department of Housing and Urban Development

·       There are no significant events scheduled at this time.

Small Business Administration

·       There are no significant events scheduled at this time.

Securities and Exchange Commission

·       Tuesday, December 3, 3:00 p.m. – SEC Chair Gary Gensler will participate in a fireside chat at the 2024 Healthy Markets Association Conference in Washington, D.C.

·       Thursday, December 5, 10:00 a.m. – SEC Chair Gary Gensler will give remarks followed by a brief moderated Q&A session at the American Bar Association’s Federal Regulation of Securities Winter Meeting in Washington D.C.

·       Thursday, December 5, 2:00 a.m. – The SEC will hold a Closed Meeting.

Commodities Futures Trading Commission

·       Tuesday, December 3, 4:00 a.m. EST – CFTC Commissioner Kristin N. Johnson will participate in a fire-side chat “U.S. Regulatory Outlook for Digital Assets: Navigating Post Policy Elections” at the 2024 DigiAssets Connect in Geneva, Switzerland.

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.

FINRA

·       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 Wagner Labor Initiative in New York.

Farm Credit Insurance Corporation

·       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

·       December 5 – 6 – The American Bar Association holds its Federal Regulation of Securities Winter Meeting in Washington, D.C.

Think Tanks and Other Events

·       Wednesday, December 4, 10:00 a.m. – The American Enterprise Institute for Public Policy Research holds a virtual discussion on "Farming and the Federal Budget: Will Farmers Face a New Age of Austerity?"

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

The Global Week Ahead

Syria’s Simmering Civil War Explodes Again, France’s Government on Brink of Crisis, OPIC+ Meets to Possibly Approve Production Increases, Key International Chairs Change Hands, And A Big Week of Economic Data Releases

December 1 - 8, 2024

We are four weeks away from 2025, but 2024 is going out with a bang. In Syria, where the civil war had been at a relatively low boil this past year, all hell broke out when rebels (mostly aligned with radical Islamist groups) launched a massive surprise attack on the city of Aleppo, the most populous governate and city in Syria. They captured it with relative ease and continued to press their attacks south toward the city of Hama, hammering Syrian Army forces (who are supported by the Russian Air Force and elements of the Russian Army).

The reignited conflict brings a new element of uncertainty and risk to the Middle East and is seen as a significant blow to Russia and Iran, both of whom have been propping up and helping to defend the regime of Syrian President Bashar al-Assad (who was in Moscow when the offensive began and had to rush back to Damascus to deal with it).

Meanwhile, in France, far-right leader Marine Le Pen gave French Prime Minister Michel Barnier until Monday to come up with more concessions (Barnier had already acceded to earlier Le Pen demands to drop planned tax increases) in the hotly debated 2025 budget or face a no-confidence vote in parliament which would throw the government into crisis. Markets have been selling off in the face of what is likely to be a wild week politically in Paris.

Also, in Europe this week, NATO member foreign ministers will meet in Brussels for an important discussion on how to further aid Ukraine. The meeting comes after Ukrainian President Volodymyr Zelensky suggested in a media interview this past week that an offer of NATO membership for territory currently under Ukraine’s control could end “the hot stage of the war.”  

Also this week, new leadership comes (or is about to come) to three important international seats:

• The US will take the chair of the UN Security Council for the month of December.

• South Africa officially takes the presidency of the G20 from Brazil for 2025.

• Poland begins laying the groundwork for its upcoming role as President of the European Union on January 1 and will continue until June 2025.

We would also note that OPEC+ meets this week to discuss possibly increasing production output—a highly contentious issue among the oil-producing states. The meeting was originally scheduled for December 1, but behind-the-scenes disagreements forced it to be postponed until December 5.

Looking at the economic radar screen this week, markets are watching the US jobs report released this Friday. Wall Street consensus estimates are roughly in the 200,000-plus range. Also, this week, the ISM Indices – manufacturing and services, on Monday and Wednesday, respectively.  And the University of Michigan consumer sentiment report and the Federal Reserve’s Beige Book are out on Friday.

In Europe, Germany—which continues to struggle economically—will release important factory order data, industrial production figures, and its trade balance. These releases come as Volkswagen workers begin to go on strike over upcoming layoffs and plant closures. 

In Asia, Japan releases both wage and consumption activity reports on Friday, while China releases its November PMIs and the Caixin indices.  

To top it all off, Federal Reserve Board Chair Jay Powell and European Central Bank President Christine Lagarde will give much-watched speeches on their views of the global economy on Wednesday. 

Below are all the other major geopolitical and market events we are watching in the coming week:

Sunday, December 1, 2024

Global

·       South Africa takes the presidency of the G20 Presidency.  South African President Cyril Ramaphosa will bring the media on Monday, December 2, on the South African agenda for the year.

·       The U.S. assumes the Chair of the UN Security Council for the month of December.

·       COP16 of the UN Convention to Combat Desertification begins in Riyadh, Saudi Arabia and goes through December 13.

·       Today is the first day of Advent.

·       Today is the first day of the meteorological winter int the Northern Hemisphere.

Americas

Political/Social Events –

·       President Joe Biden departs for a trip to Angola.  The purpose of the meeting is to improve US-African relations but also highlight a U.S. backed railway project.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Taiwan’s President Willam Lai continues a tour of the Marshall Islands, Palau, and Tuvalu – all of whom have diplomatic relations with Taiwan.

·       Today is Kazakhstan’s First President’s Day, a national holiday.

Economic Reports/Events –

·       South Korea Imports/ Exports/ Balance of Trade (November)

·       Australia Commodity Prices (November)

Europe

Political/Social Events –

·       Romania holds parliamentary elections.

·       Liechtenstein holds a referendum regarding a package of measures proposed by the Liechtenstein Employee Pension Foundation (SPL), directed at a state pension fund. 

·       Ursala von der Leyen formally begins her second term as European Commission President.

·       Today is Portugal Independence Day, a national holiday.

·       Today is Romania Independence Day, a public holiday.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       The Gulf Cooperation Council (GCC) leaders will meet in Kuwait to discuss regional issues.

Economic Reports/Events –

·       Israel Composite Economic Index (October)

Africa

Political/Social Events –

·       Today is Freedom and Democracy Day in Chad, a public holiday.

Economic Reports/Events –

·       Nothing significant to report.

Monday, December 2, 2024

Global

·        The UN Security Council meets on the situation of children in Haiti.

Americas

Political/Social Events –

·       Canadian Foreign Minister Melanie Joly meets Baltic counterparts in Riga, Latvia.

·       Germany’s former Chancellor Angela Merkel presents her memoir 'Freedom' in a joint appearance with former President Barack Obama in Washington, D.C.

Economic Reports/Events –

·       Federal Reserve Board Governor Christopher Waller gives a speech on the economic outlook at the American Enterprise Institute in Washington, D.C.

·       New York Federal Reserve Bank President John Williams will participate in a conversation organized by the Queens Chamber of Commerce.

·       Mexico Foreign Exchange Reserves (October)/ Business Confidence (November)/ S&P Global Manufacturing PMI (November)

·       Chile IMACEC Economic Activity (October)

·       Brazil S&P Global Manufacturing PMI (November)/ BCB Focus Market Readout

·       Canada S&P Global Manufacturing PMI (November)

·       USA S&P Global Manufacturing PMI (November)/ ISM Manufacturing PMI (November)/Fed Balance Sheet (November/27)

·       Colombia Davivienda Manufacturing PMI (November)

·       Peru Inflation Rate (November)

Asia

Political/Social Events –

·       East Timor's Prime Minister Xanana Gusmao makes an official visit to Malaysia for talks with Prime Minister Anwar Ibrahim. The trip comes as the small country of about 1.3 million people prepares to join the Association of Southeast Asian Nations as its 11th member state. Malaysia chairs the bloc next year.

·       Nepali Prime Minister KP Sharma Oli visits China, casting off a tradition in which the Himalayan nation's leaders make India their first foreign trip after taking office. Oli is expected to request a waiver on a $216 million Chinese loan used to build the country's third international airport. The airport has not drawn any international flights since its opening last year.

·       The trial begins of Malaysian ex-prime minister Najib Razak on charges of taking bribes, money laundering linked to 1MDB scandal.

·       Today is Saba Day in Saba, celebrating the independence of the small island in the Netherlands Antilles.

Economic Reports/Events –

·       New Zealand Building Permits (October)

·       Australia Judo Bank Manufacturing PMI Final (November)/ TD-MI Inflation Gauge (November)/ Building Permits (October)/ Company Gross Profits Q3/ Retail Sales (October)/ ANZ-Indeed Job Ads (November)/ Business Inventories Q3/ Private House Approvals (October)/ RBA Jacobs Speech/ Commodity Prices (November)

·       Japan Capital Spending Q3/ Jibun Bank Manufacturing PMI Final (November)

·       Indonesia S&P Global Manufacturing PMI (November)/ Inflation Rate (November)/ Tourist Arrivals (October)

·       Malaysia S&P Global Manufacturing PMI (November)

·       Philippines S&P Global Manufacturing PMI (November)

·       South Korea S&P Global Manufacturing PMI (November)

·       Taiwan S&P Global Manufacturing PMI (November)

·       Thailand S&P Global Manufacturing PMI (November)/ Business Confidence (November)

·       Vietnam S&P Global Manufacturing PMI (November)

·       China Caixin Manufacturing PMI (November)

·       India HSBC Manufacturing PMI Final (November)

·       Kazakhstan S&P Global Manufacturing PMI (November)/ Inflation Rate (November)

·       Singapore SIPMM Manufacturing PMI (November)

·       Pakistan Consumer Confidence (November)/ Inflation Rate (November)/ Wholesale Prices (November)/ Balance of Trade (November)

Europe

Political/Social Events –

·       French Prime Minister Michel Barnier faces a deadline set by French opposition leader Marine Le Pen to offer new, farther reaching budget concessions or face a no-confidence vote which could topple the government.

·       German Foreign Minister Annalena Baerbock visits China through December. On Sunday, before departing for Beijing, Baerbock strongly criticized China for supporting Russia in its war on Ukraine.

·       German Defence Minister Boris Pistorius visits Norway for talks with Defense Minister Bjørn Arild Gram.

·       Romania’s top court is expected to rule on whether to annul the first round of presidential elections (the second round is scheduled for December 8).   The challenge to the results were brought after allegations of external interference in the elections by Russia.

·       Germany’s IG Metall union calls for possible warning strikes in Volkswagen factories across the country.

·       UK Prime Minister Keir Starmer will give his annual foreign policy speech at the Lord Mayor’s Banquet in the City of London.  Earlier in the day, Starmer hosts Greek Prime Minister Kyriakos Mitsotakis for bilateral talks.

·       The EU Employment, Social Policy, Health and Consumer Affairs Council (Employment and Social Policy) meets in Brussels through December 3.  Ministers will discuss EU demographic challenges, labor and skills shortages in the EU, and the traineeships directive.

Economic Reports/Events –

·       European Central Bank President Christine Lagarde participates in an EIB Group Climate and Environment Advisory Council in Luxembourg.

·       Bank of England Director of Financial Stability Strategy and Risk Lee Foulger gives a speech at  the Bloomberg UK Policy Series in London.

·       Ireland AIB Manufacturing PMI (November)/ Average Weekly Earnings Q3

·       Netherlands Retail Sales (October)/ NEVI Manufacturing PMI (November)

·       Russia S&P Global Manufacturing PMI (November)

·       Romania BCR Manufacturing PMI (November)/ Unemployment Rate (October)

·       Turkey Istanbul Chamber of Industry Manufacturing PMI (November)

·       Great Britain Nationwide Housing Prices (November)/ S&P Global Manufacturing PMI Final (November)

·       Hungary Balance of Trade Final (September)/ HALPIM Manufacturing PMI (November)

·       Switzerland Retail Sales (October)/ procure.ch Manufacturing PMI (November)

·       Poland S&P Global Manufacturing PMI (November)

·       Spain HCOB Manufacturing PMI (November)/ New Car Sales (November)

·       Italy HCOB Manufacturing PMI (November)/ Unemployment Rate (October)/ GDP Growth Rate Q3/ New Car Registrations (November)

·       France HCOB Manufacturing PMI (November)/ New Car Registrations (November)

·       Germany HCOB Manufacturing PMI (November)

·       Euro Area HCOB Manufacturing PMI (November)/ ECB President Lagarde Speech/ Unemployment Rate (October)

·       Greece S&P Global Manufacturing PMI (November)

·       Serbia GDP Growth Rate Q3

Middle East

Political/Social Events –

·       Israeli Prime Minister Benjamin Netanyahu will give testimony at his ongoing corruption trial.  He is the first sitting Israeli prime minister to testify in a public corruption trial.

·       Today is UAE National Day, a public holiday.

Economic Reports/Events –

·       Qatar Balance of Trade (October)/ Inflation Rate (October)

Africa

Political/Social Events –

·       The SenHabitat 2024 begins in Dakar, Senegal bringing together investors and government officials focused on real estate, housing, and construction

·       Economic Reports/Events –

·       Nigeria Stanbic IBTC Bank Nigeria PMI (November)

·       South Africa ABSA Manufacturing PMI (November)/ Total New Vehicle Sales (November)

Tuesday, December 3, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       US Federal Reserve Board Governor Adriana Kugler gives a speech on the Labor Market and Monetary Policy at the Detroit Economic Club in Detroit, Michigan.

·       Chicago Federal Reserve Bank President Austan Goolsbee to give closing remarks before hybrid Midwest Agriculture Conference entitled "The Changing Landscape for Agricultural Inputs."

·       Brazil IPC-Fipe Inflation (November)/ GDP Growth Rate Q3

·       Mexico Unemployment Rate (October)/ Gross Fixed Investment (September)

·       USA Redbook (November)/30/ JOLTs Job Openings (October)/ JOLTs Job Quits (October)/ RCM/TIPP Economic Optimism Index (December)/API Crude Oil Stock Change (November/29)/ LMI Logistics Managers Index (November)

·       Paraguay Inflation Rate (November)

Asia

Political/Social Events –

·       US Space Force opens a unit at Yokota Air Base in Japan.

·       The 20th Tokyo-Beijing Forum takes place in Tokyo.

Economic Reports/Events –

·       New Zealand Import Prices Q3/ Export Prices Q3/ Terms of Trade Q3/ Global Dairy Trade Price Index (December/03)

·       South Korea Inflation Rate (November)

·       Australia Current Account Q3/ Net Exports Contribution to GDP Q3

·       Hong Kong: The British Chamber of Commerce in China will release its annual business sentiment survey, followed by the German chamber's confidence survey. 

Europe

Political/Social Events –

·       NATO holds a two-day foreign ministers meeting in Brussels to discuss the situation in Ukraine and the Middle East.  NATO Secretary General Mark Rutte will also receive His Majesty King Abdullah II ibn Al Hussein of the Hashemite Kingdom of Jordan.

·       The EU Employment, Social Policy, Health and Consumer Affairs Council (Health) meets in Brussels.  Ministers will adopt a recommendation on smoke- and aerosol-free environments, focusing on key outdoor areas like playgrounds and restaurant terraces, as well as emerging tobacco and related products such as e-cigarettes, heated tobacco products and heated herbal products.  The Council will also discuss the state of play of the revision of pharmaceutical legislation in the EU, focusing on regulatory incentives. The package aims to improve security of supply of medicines and prevent shortages.

·       The Emir of Qatar, Sheikh Tamim bin Hamad Al Thani ,begins a two-day state visit, accompanied by his first wife, Sheikha Jawaher bint Hamad bin Suhaim Al Thani.  King Charles and Queen Camilla will host the visitors at Buckingham Palace, and Starmer will meet the Emir for bilateral talks in Downing Street.

·       FT Global Banking Summit opens in London. Speakers across the two-day event include Barclays chief executive CS Venkatakrishnan and Deutsche Bank chief executive Christian Sewing.

Economic Reports/Events –

·       European Central Bank Board Member Piero Cipollone gives a pre-recorded conversation with Daniele Manca at GeoEconomy Talk organized by RCS Academy, the Business School of RCS MediaGroup, in collaboration with Il Corriere della Sera in Milan, Italy.

·       Great Britain BRC Retail Sales Monitor (November)

·       Romania PPI (October)

·       Turkey Inflation Rate (November)/ PPI (November)

·       Hungary GDP Growth Rate Q3

·       Switzerland Inflation Rate (November)

·       France Budget Balance (October)

·       Euro Area ECB Cipollone Speech

·       Slovakia Real Wages Q3

·       Spain Unemployment Change (November)/ Tourist Arrivals (October)

·       Ireland Construction Output Q3

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia Riyad Bank PMI (November)

·       Qatar Financial Centre PMI (November)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Egypt S&P Global PMI (November)

·       South Africa GDP Growth Rate Q3

Wednesday, December 4, 2024

Global

·       The UN General Assembly meets on the situation in Gaza. 

·       The OECD releases its Economic Outlook.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       US Federal Reserve Board Chair Jay Powell participates in a moderated discussion at the New York Times DealBook Summit in New York.

·       St. Louis Federal Reserve Bank President Alberto Musalem to speak before the Bloomberg/Global Interdependence Center College of Central Bankers Symposium.

·       Brazil Industrial Production (October)/ S&P Global Services & Composite PMI (November)

·       USA Fed Beige Book/MBA Mortgage Market Index (November/29)/ ADP Employment Change (November)/ S&P Global Services & Composite PMI (November)/ ISM Services PMI (November)/ ISM Services Business/ Employment/ New Orders/ Prices Activity (November)/ EIA Crude Oil & Gasoline Stocks Change (November/29)

·       Canada Labor Productivity Q3/ S&P Global Services & Composite PMI (November)

·       Colombia Exports (October)/ PPI (November)

·       Uruguay Inflation Rate (November)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea Foreign Exchange Reserves (November)

·       Australia Ai Group Industry & Construction & Manufacturing Index (November)/ Judo Bank Services PMI Final (November)/ Judo Bank Composite PMI Final (November)/ GDP Growth Rate Q3/ GDP Capital Expenditure Q3/ GDP Chain Price Index Q3/ GDP Final Consumption Q3

·       Hong Kong S&P Global PMI (November)

·       Japan Jibun Bank Services & Composite PMI Final (November)

·       Singapore S&P Global PMI (November)

·       China Caixin Services & Composite PMI (November)

·       India HSBC Services & Composite PMI Final (November)

·       Kazakhstan S&P Global Services PMI (November)

Europe

Political/Social Events –

·       UK City minister and Economic Secretary to the Treasury Tulip Siddiq and Chinese ambassador to the UK Zeguang Zheng speak at the OMFIF China-UK Investor forum in London.

·       The European Parliament’s Economic and Monetary Affairs Committee will hear from Christine Lagarde, first in her capacity as President of the European Central Bank and then as Chair of the European Systemic Risk Board. Economic governance, geo-political risks, and the cost of living are all expected to feature prominently in the discussions. The hearings will be followed by another debate with Dominique Laboureix, Chair of the Single Resolution Board 

Economic Reports/Events –

·       Bank of England Governor Andrew Bailey speaks at the Financial Times Global Boardroom event in London.

·       European Central Bank Board Member Piero Cipollone gives a virtual speech followed by a Q&A session at the 7th conference on behavioral financial regulations and policies organized by Herbert Simon Society in Milan, Italy.

·       Ireland AIB Services PMI (November)/ Unemployment Rate (November)

·       Russia S&P Global Services & Composite PMI (November)

·       Spain HCOB Services & Composite PMI (November)

·       Italy HCOB Services & Composite PMI (November)

·       France HCOB Services & Composite PMI (November)

·       Germany HCOB Services & Composite PMI (November)/ New Car Registrations (November)

·       Euro Area HCOB Services & Composite PMI (November)/ PPI (October)

·       UK S&P Global Services & Composite PMI Final (November)

·       Hungary Monetary Policy Meeting Minutes

·       Turkey Imports/ Exports/ Balance of Trade Prel (November)

·       Poland Interest Rate Decision (December)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Lebanon BLOM Lebanon PMI (November)

·       Israel Tourist Arrivals (November)

Africa

Political/Social Events –

·       The Africa Investment Forum begins in Rabat, Morocco and runs through Friday.

Economic Reports/Events –

·       Mozambique Standard Bank PMI (November)

·       South Africa S&P Global PMI (November)/ Consumer Confidence Q4

·       Kenya Stanbic Bank PMI (November)

·       Ghana S&P Global PMI (November)

·       Nigeria Balance of Trade (July)/ Balance of Trade (August)/ Balance of Trade (September)

Thursday, December 5, 2024 

Global

·       Ministers from Organization of the Petroleum Exporting Countries and allies (Opec+) meet in Vienna, Austria.  The meeting was originally scheduled for December 1 but was moved to today. Ministers are going to consider reviving halted production beginning in January.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Richmond Federal Reserve Bank President Thomas Barkin to speak before in-person Charlotte Regional Business Alliance 2024 Economic Outlook event.

·       USA Challenger Job Cuts (November)/ Imports/ Exports/ Balance of Trade (October)/ Initial Jobless Claims (November)/30/ EIA Natural Gas Stocks Change (November/29)/ 15- & 30-Year Mortgage Rate (December/04)/ Fed Balance Sheet (December/04)

·       Brazil Car Production (November)/ Balance of Trade (November)

·       Canada Imports/ Exports/ Balance of Trade (October)/ Ivey PMI s.a (November)

·       Ecuador Inflation Rate (November)

Asia

Political/Social Events –

·       The Malaysia Motor Show begins in Kula Lumpur.

Economic Reports/Events –

·       Bank of Japan Member of the Policy Board Toyoaki Nakamura gives a speech in Hiroshima to local business leaders.

·       South Korea GDP Growth Rate Q3

·       Japan Foreign Bond Investment (November)/30/ Stock Investment by Foreigners (November)/30/ BOJ Nakamura Speech

·       Australia Imports/ Exports/ Balance of Trade (October)

·       Philippines Inflation Rate (November)

·       Singapore Retail Sales (October)

·       Taiwan Inflation Rate (November)/ Foreign Exchange Reserves (November)

·       Vietnam Foreign Direct Investment (November)

Europe

Political/Social Events –

·       The EU Transport, Telecommunications and Energy Council (Transport) meets in Brussels.  Ministers will be asked to approve the Council’s position (‘general approach’) on several legislative files: the directive on driving disqualifications, which forms part of the ‘road safety’ package, the regulation on passenger rights in the context of multimodal journeys and the regulation on enforcement of passenger rights in the EU. The Council will also hold a policy debate on air passenger rights and take note of a progress report on the combined transport directive. 

·       In Lyon, France, the Festival of Lights will be held. Originally aimed at expressing gratitude towards Mary, mother of Jesus, kicks off with hundreds of thousands of spectators expected to attend.

Economic Reports/Events –

·       Bank of England Executive Director Victoria Cleland gives a speech at the Fintech Connect event in London on ‘The future road map of Bank of England’s real time gross settlement (RTGS) service.’

·       European Central Bank Board Member Patrick Montagner gives a speech at the IIF Colloquium on European Banking Regulation & Supervision in Frankfurt, Germany.

·       Switzerland Unemployment Rate (November)

·       Germany Factory Orders (October)/ HCOB Construction PMI (November)

·       Romania Retail Sales (October)

·       Hungary Balance of Trade Prel (October)/ Retail Sales (October)

·       France Industrial Production (October)/ HCOB Construction PMI (November)

·       Slovakia GDP Growth Rate Q3/ Retail Sales (October)

·       Spain Industrial Production (October)

·       Euro Area HCOB Construction PMI (November)/ Retail Sales (October)

·       Italy HCOB Construction PMI (November)

·       Great Britain New Car Sales (November)/ S&P Global Construction PMI (November)/ BoE Greene Speech

·       Slovenia Balance of Trade (October)

·       Ireland Current Account Q3/ GDP Growth Rate Q3/ GNP Q3

·       Serbia PPI (November)

·       Turkey Foreign Exchange Reserves (November/29)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Business Confidence (November)/ Foreign Exchange Reserves (November)

·       Jordan PPI (October)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Current Account Q3

·       Kenya Interest Rate Decision

Friday, December 6, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       The Mercosur Summit begins in Uruguay, bringing leaders from the South American trading bloc together to discuss trade.  Last week, the French parliament dealt a tough blow to a potential EU-Mercosur agreement, siding with French farmers who opposed the deal and voting 484 to 70 against signing a deal.

Economic Reports/Events –

·       US Federal Reserve Board Governor Michelle Bowman gives a speech at the Missouri Bankers Association Executive Management Conference (Virtual)

·       San Francisco Federal Reserve Bank President Mary Daly to participate in "Emerging Technology and the Economy" conversation hosted by the Hoover Institution.

·       Chile Inflation Rate (November)

·       Mexico Auto Exports & Production (November)

·       Canada Unemployment Rate (November)/ Participation Rate (November)/ Full & Part Time Employment Chg (November)/ Average Hourly Wages (November)

·       Costa Rica Inflation Rate (November)

·       Argentina Industrial Production (October)

·       Colombia Inflation Rate (November)

·       El Salvador Inflation Rate (November)

·       USA Unemployment Rate (November)/ Participation Rate (November)/ Non-Farm and Manufacturing and Government Payrolls (November)/ U-6 Unemployment Rate/Michigan Current Conditions Prel (December)/ Baker Hughes Total Rigs Count (December/06)/ Consumer Credit Change (October)/ Used Car Prices (November)/ Total Vehicle Sales (November)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea Current Account (October)

·       Japan Average Cash Earnings (October)/ Household Spending (October)/ Overtime Pay (October)/ Coincident Index Prel (October)/ Leading Economic Index Prel (October)

·       Australia Home Loans (October)/ Investment Lending for Homes (October)

·       Philippines Unemployment Rate (October)/ Industrial Production (October)/ Foreign Exchange Reserves (November)

·       Vietnam Balance of Trade (November)/ Industrial Production (November)/ Inflation Rate (November)/ Retail Sales (November)/ Tourist Arrivals (November)

·       Indonesia Foreign Exchange Reserves (November)

·       Thailand Inflation Rate (November)

·       India RBI Interest Rate Decision/ Cash Reserve Ratio/ Foreign Exchange Reserves (November/29)

·       Hong Kong Foreign Exchange Reserves (November)

·       Singapore Foreign Exchange Reserves (November)

·       China Foreign Exchange Reserves (November)

Europe

Political/Social Events –

·       Russia's President Vladimir Putin visits Minsk, Belarus to validate security concept of the Russian-Belarusian Union.

·       The Organization for Security and Cooperation in Europe (OSCE) begins a two-day ministerial meeting in Malta.  Foreign ministers will meet to review and address the security situation in the Euro-Atlantic and Eurasian area, as well as to evaluate the Organization's work in all its fields of activity.

·       The EU Transport, Telecommunications and Energy Council (Telecom) meets in Brussels.  Ministers will approve conclusions on the EU Agency for cybersecurity (ENISA) and on the Commission’s White Paper ‘How to master Europe’s digital infrastructure needs?’. They will also hold a policy debate on the digital decade 2030 objectives and targets in light of recent technological changes. Over an informal lunch, ministers will discuss ways to improve EU coordination and enhance the effectiveness of actions within the International Telecommunication Union (ITU). Finally, the incoming Polish presidency will inform the Council on its work program for the first semester 2025.

·       Today is Finland Independence Day, a national holiday.

Economic Reports/Events –

·       Netherlands Household Consumption (October)

·       Germany Industrial Production (October)

·       Romania GDP Growth Rate Q3

·       Great Britain Halifax House Price Index (November)/ BBA Mortgage Rate (November)

·       Hungary Industrial Production (October)/ Budget Balance (November)

·       France Imports/ Exports/ Balance of Trade (October)/ Current Account (October)/ Foreign Exchange Reserves (November)

·       Switzerland Foreign Exchange Reserves (November)

·       Italy Retail Sales (October)

·       Euro Area GDP Growth Rate Q3/ Employment Change Q3

·       Greece Balance of Trade (October)/ GDP Growth Rate Q3

·       Poland Foreign Exchange Reserves (November)

·       Russia Foreign Exchange Reserves (November)

·       Ukraine Foreign Exchange Reserves (November)/ GDP Growth Rate Q3

·       Turkey Treasury Cash Balance (November)

Middle East

Political/Social Events –

·       The International Institute for Strategic Studies (IISS) holds its Manama Dialogue in Bahrain.

Economic Reports/Events –

·       United Arab Emirates S&P Global PMI (November)

·       Jordan Unemployment Rate Q3

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Foreign Exchange Reserves (November)

·       Egypt Foreign Exchange Reserves (November)

·       Ghana General Elections

Saturday, December 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 –

·       China Imports/ Exports/ Balance of Trade (November)/ Foreign Exchange Reserves (November)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       The 22nd Doha Forum on Democracy, Development and Free Trade begins and runs through December 8. The theme of this year’s two-day event is “The Innovation Imperative.”

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Ghana holds both presidential and parliamentary elections.  However, the government is facing an unprecedented shutdown in advance of the election unless they pass a provisional budget in advance of the election.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, December 8, 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 –

·       Japan Foreign Exchange Reserves (November)

Europe

Political/Social Events –

·       Romania holds  its presidential election run-off.  

·       Notre-Dame Cathedral official reopens to the public after a catastrophic fire five years ago.

Economic Reports/Events –

·       Euro Area Eurogroup Meeting

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia GDP Growth Rate Q3

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

The Geopolitical Outlook and Latin America 2025

The FLAR Conference 2024 Presentation

Cartegna, Colombia

It was a great pleasure to be asked to present at the FLAR Conference in Cartagena, Colombia recently. My presentation topic was broader geopolitical and geoeconomic trends that are likely to impact Latin America and which Latin American central banks need to consider in 2025. You can watch my presentation here (it begins at the 56-minute mark).

I recommend you continue to watch the panel presentation that followed for some great insights from the superb group I was honored to join to discuss and debate with on these timely topics.

Recommended Weekend Reads

China’s Economic Spillovers to Emerging Markets, Does the U.S. Really Face an “Axis” of Enemies”? And the Growing Asymmetric Threat to Undersea Communication Cables

November 29 - December 1, 2024

Geoeconomics

• China’s Financial Spillovers to Emerging Markets  Banco de España

  This paper analyzes the financial spillovers of shocks originating in China to emerging markets. Using a high-frequency identification strategy based on sign and narrative restrictions, we find that equity markets react strongly and persistently to Chinese macroeconomic shocks, while monetary policy shocks have limited or no spillovers. The impact is particularly strong in Latin American equity markets, with the likely channel being the effect of shocks in China on international commodity prices. These effects extend to various financial variables, such as sovereign and corporate spreads and exchange rates, suggesting that macroeconomic shocks in China may have implications for economic cycles and financial stability in emerging markets.
  
  

• The Puzzle of Multinationals’ Profits: Why Tax Havens Yield Higher Returns  Federal Reserve Bank of St. Louis On the Economy Blog

  A striking pattern emerges when examining the returns that U.S. multinational companies generate on the assets they invest across different countries: Investments in tax havens consistently yield returns of 8% to 17%, while investments in other G7 economies (Canada, France, Germany, Italy, Japan and the U.K.) yield more modest returns of 4% to 9%. This remarkable difference raises a question about the nature of multinationals’ profit patterns.

• Federal Reserve Independence and Congressional Intent: A Reappraisal of Marriner Eccles’ Role in the Reformulation of the Fed in 1935  Gary Richardson & David W. Wilcox/National Bureau of Economic Research

  Congressional intent concerning the independence of the Federal Reserve matters because it protects the public from the politicization of monetary policy. Attempts to subordinate monetary policy to the President could easily end up in front of the Supreme Court. The outcome of such a case would depend, importantly, on the historical record. Understanding what Congress intended when it designed the decision-making structure of the Fed requires a clear understanding Marriner Eccles’ proposal for the structure of monetary policymaking in Title II of the Banking Act of 1935 and the Congressional response. Eccles' proposal vested monetary policymaking in a body beholden to the President. Eccles argued that leaders of the Fed should serve at the discretion of the President and implement the President's monetary program. The Senate and House rejected Eccles' proposal and explicitly designed the Fed's leadership structure to limit politicians'—particularly the President's—influence on monetary policymaking.
  
  

• Ending Bailouts, At Last  John Cochrane & Amit Seru/Hoover Institution

  In 2008, we had a financial crisis. Our government responded once again with bailouts. Bailouts keep existing business going, and most of all protect creditors from losses. The instruments vary, including direct creditor guarantees like deposit insurance, mergers of failing companies with sound ones sweetened with government money or government purchases of bad assets, or government purchases, guarantees, and other efforts to prop up security prices and thereby cover up losses. Since actual or promised (contingent) resources flow from taxpayers to financial market participants, we include all of these interventions as “bailouts.”

The Threat of Asymmetric Attacks on Undersea Cables

• Safeguarding Subsea Cables: Protecting Cyber Infrastructure Amid Great Power Competition  Daniel Runde/ Center for Strategic and International Studies

  Subsea cables are critical for nearly all aspects of commerce and business connectivity. For example, one major international bank moves an average of $3.9 trillion through these cable systems every workday. Cables are the backbone of global telecommunications and the internet, given that user data (e.g., e-mail, cloud drives, and application data) are often stored in data centers around the world. This infrastructure effectively facilitates daily personal use of the Internet and broader societal functions. In addition, sensitive government communications also rely extensively on subsea infrastructure. Western defense and intelligence officials are increasingly concerned about Russia’s threats to disrupt and destroy the cables. What can be done?

• Understanding and Managing Global Catastrophic Risk  Rand

  In response to a request from the U.S. Department of Homeland Security (DHS)—specifically, FEMA—for support in meeting the requirements of the Congressionally mandated Global Catastrophic Risk Management Act (GCRMA)assessment requirement, RAND researchers developed a risk summary for each of the hazards and threats noted in the law. What are those hazards and threats? asteroid and comet impacts, super-volcanoes, severe pandemics, rapid and severe climate change, nuclear conflict, and AI.
  

• The United States and the “Axis” of Its Enemies: Myths vs. Reality  Eugene Rumer/Carnegie Endowment for International Peace

  Since launching its all-out assault on Ukraine, Russia has drawn closer to China, Iran, and North Korea. But have they really formed an “axis?” Their interests have aligned but not merged. It makes little sense and can be even counterproductive to treat these four countries, each guided by its own vision, as a unified coalition.

China

• The Clandestine Oil Shipping Hub Funneling Iranian Crude to China  Bloomberg

  Bloomberg has written a fantastic interactive report on how a burgeoning group of “dark fleet” vessels are operating with impunity on the edge of major maritime thoroughfares. And in these ships, hundreds of millions of barrels of sanctioned oil is being moved by Iran and China – with tremendous risk to the environment.

Opening of the DWS Rep Office in Colombia

A Superb Trip to Bogotá Meeting with Colombia’s Financial Leaders As Colombia Increasingly Becomes a Central Focus of Global Investors

From left to right: DWS’ Aiviel Sanchez,  Ana María Rodríguez, Stella Gonzales Vigil, Mary Wallace, and myself at the DWS Rep Office Reception held at the J.W. Marriott in Bogáta on November 19, 2024.

It was my great pleasure and honor to visit Colombia last week for meetings in Bogáta and Cartenga, all arranged by DWS. Having the opportunity to meet with the leadership of the nation’s pensions funds, bank insurance fund, and other financial leaders was both timely and fascinating. Colombia is emerging as a major hub for technology in the region. Foreign investors are increasingly looking to Colombia as a superb choice to invest for the long term.

While there, I was honored to speak at the DWS Rep Office opening reception. DWS is expanding its operations throughout the region and in particular in Colombia. Colombian investors are deeply focused on the geopolitical developments - particularly between the US and China as well as the upcoming review of the USMCA. There was a lot to discuss with the attendees - and I suspect there will be even more to cover in the months to come.