Palpable uncertainties that had been hanging over the investment climate in 2019 were lifted at the end. The UK election leaves no doubt that Brexit will take place at the end of January. The new NAFTA looks to be ratified in early 2020. The US and China have reached an agreement that marks a cessation …
The American political discourse has changed since the 2018 midterm election. Enthusiasm and passion were to be found on the left-wing of the Democratic Party. A new sense of hope and mission replaced the defeatism and cynicism seen in 2016. Some identified with democratic socialism, but in the political rhetoric the broad brush of “socialism” has …
Italian asset markets continue to fare better than many expected. The political uncertainty following the March election has been followed by confidence that the Five Star Movement and the (Northern) League will be able to put together a government in the coming days. If so, Italy would have taken half the time Germany did to cobble a …
Italy Defies Gravity and Risk to Fiscal Rectitude Read More »
There are ostensibly three main political forces in Italy. The Five Star Movement is seen as a populist party who’s agenda appears unique blend of right/left issues. From the March elections, it emerged as the single biggest force. The center-right alliance has two main components, the Northern League, a nationalist party and Berlusconi’s Forza Italia. …
We have voiced our objections to the militarization of the language surrounding foreign exchange and trade. For several years, the media and journalists played up ideas of currency wars–beggar-thy-neighbor competitive devaluations. Leave aside the fact that it was often indistinguishable from easy monetary policies to facilitate economic recovery and arrest deflationary forces. Now it is …
Important economic data will be reported next week. Japan reports the results of its latest Tankan survey and the household spending (following today’s report of disappointing retail sales). The EMU’s March inflation report and February retail sales are on tap. The US jobs and auto sales for March will be released. It is also the start …
The Italian election results look a bit more euro-skeptic, but the not far from what the polls showed. Coalitions matter under the new electoral rules, and the center-right coalition appears to have the most votes, followed by the 5-Star Movement, and then the center-left in third. There were two surprises. First, the center-left did poorer, …
Italian Election Weighs on Italian Assets, but Little Systemic Risk Seen Read More »
Among the biggest political risk of the year is at hand. The results of the SPD vote on whether to join another grand coalition and the national election of Italy are due Sunday. The market is unusually calm about it. The euro is trading sideways, a couple cents below the multi-year high set two weeks …
Where is the Anxiety Ahead European Political Risk on March 4? Read More »
Germany does not have a government, though the election was more than three months ago. Spain, Portugal, and Ireland have minority governments. Austria is the first government since the financial crisis to include the populist right. The EU is trying to press the Visegrad group of central European countries to conform to the values of …
The New Year may have begun in fact, but in practice, full participation may return only after the release of US employment data on January 5. The macroeconomic and policy tables have been set, though interpolating from the Overnight Index Swaps market, there is 45% chance the Bank of Canada hikes rates at its policy meeting near …