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What is the Best Fiscal Risk Premium Measure: Exchange Rate, Stock Market Index or Yield Curve?
BRAZIL ECONOMICS · Report · 30 Jan 2023

The absence of a fiscal framework results in a risk premium that is manifested in the prices of assets, such as the exchange rate, stock prices and the position and slope of the yield curve. Although in evaluating the reactions to the information related to fiscal policy, we look at these three p...

Inflation is a challenge for the Lula government and other weekly topics
BRAZIL POLITICS · Report · 30 Jan 2023 · 1 response

The Legislative and Judicial branches resume activities. Elections in the House and Senate are at the center of the political world. Arthur Lira (PP-AL) and Rodrigo Pacheco (PSD-MG), who are running for re-election, are the favorites. In the economy, the first meeting of the Monetary Policy Commi...

A record rise in car exports
INDONESIA · Report · 30 Jan 2023

The Indonesian economy posted an encouraging result for Q3 2022 with GDP growth of 5.72%, significantly higher than 5.44% achieved in the previous quarter. One of the main contributors to this growth was the rise in exports. In 2022, Indonesian exports reached $292 billion, a record level. Ind...

Kazakhstan macro: financial sector to be increasingly important for growth, with an emphasis on inflation and rates
KAZAKHSTAN · Report · 30 Jan 2023

In line with an estimate by the National Bank of Kazakhstan concerning the country’s GDP growth at 3.1%, the country’s Ministry of Economy mentioned a similar figure. The National Bureau of Economic Statistics reported that in 9M22, the country’s GDP increased by 3.0%. Therefore, based on this nu...

Economics: Recent data points to further slowing in activity, with a slight rebound in inflation
MEXICO · Report · 30 Jan 2023

As we conclude the first month of 2023, we have been presented with evidence of cooling activity in key indicators. After consumption had been especially strong in the second and third quarters, consumer spending faltered in the two most recent months for which Inegi data is available, including ...

Russia advances in east Ukraine
RUSSIA / FSU POLITICS · In Brief · 30 Jan 2023

On January 30 a Moscow installed bureaucrat named Denis Pushilin in Donetsk said that Russia has taken land around Vuhledar. But he said that Ukrainian resistance is fierce in Vuhledar. The town is 93 km south of Bakhmut which Russia intent on taking. Russia appears to want to do a pincer movemen...

There will be elections in Congress for the presidencies of the House and Senate this week, Congress and the Judiciary will resume activities on Wednesday, February 1, and the Central Bank will decide on the interest rate
BRAZIL POLITICS · Report · 30 Jan 2023

In the House, Arthur Lira (PP-AL) is running for re-election as president and, so far, there is no other viable candidacy. The race for the presidency in the Senate will be tougher than in the House. Rodrigo Pacheco (PSD-MG), who is seeking re-election, will face Rogério Marinho (PL-RN). Pacheco ...

Back on track in 2023
CHINA · Report · 30 Jan 2023

GDP grew 3% in 2022. Specifically, China’s economy rose by 2.9% y/y in Q4 2022, down from the 3.9% growth reported in Q3. Many negative factors affected the economy in 2022, including global macroeconomic tightening, the Ukraine crisis, real estate restructuring, the pandemic management policies ...

Concern regarding the judicial reform rattles the markets
ISRAEL · Report · 30 Jan 2023

1. Growing concern regarding the proposed judicial reforms has supported a selloff of Israeli financial assets, including equities, bonds and FX. 2. Recent economic indicators point to slowing growth, including weaker private consumption. 3. Despite slowing growth, a weaker shekel will ...

Concern regarding the judicial reform rattle the markets
ISRAEL · In Brief · 29 Jan 2023

Financial markets in Israel have sold off recently Concern regarding capital outflows have resulted in a weaker shekel, lower equity prices and higher bond yields. This follows growing international (as well as domestic) concern regarding the proposed judicial reform which would strengthen politi...

ToS racing to the finish line
TURKEY · Report · 29 Jan 2023 · 2 responses

The main opposition alliance, Table of Six, now renamed the Nation Alliance (once again) made further progress towards becoming a true coalition in the leaders’ 26 January summit, while batting away some of the criticisms hurled at it. Party sources claim a joint presidential candidate will be...

S&P downgraded Hungary to BBB-, with Stable outlook, on Friday
HUNGARY · In Brief · 29 Jan 2023

S&P had been holding Hungary on BBB/Negative since August 2022. The explanation of its downgrade, announced on January 27, included: (1) sharp monetary tightening, forced by sustained high inflation, forint volatility and external pressure; (2) high energy prices, uncertain economic prospects and...

Who stole Usain Bolt's money?
JAMAICA / BAHAMAS · Report · 27 Jan 2023

For over two weeks in Jamaica, there has been only one news story, as both the elites and the man on the street were shocked that global sprinting superstar Usain Bolt now had only US$12,000 in his retirement fund. Bolt, the closest thing Jamaica has had to a national icon since Bob Marley, advis...

GULF WEEKLY: Kuwait’s cabinet resigns, S&P stabilizes Sharjah, Qatar-Bahrain phone call
GULF COUNTRIES · Report · 27 Jan 2023

A skimmable summary overlaid with our analysis and links. Headlines: * Qatar-Bahrain reconciliation gained pace as the Amir and Crown Prince spoke by phone. * Saudi Arabia’s 2023 borrowing plan implies it only needs to raise $1bn more this year. * S&P lifted Sharjah’s outlook to stable, and ...

Getting used to the new normal
COLOMBIA · Report · 27 Jan 2023 · 1 response

Contrary to expectations, President Gustavo Petro is managing his politics quite well -- and for some that creates disconcert and awe. Constant criticism of him falls mostly on deaf ears. This is the historical moment for Petro's ideas and leadership, and ordinary people want to know if they were...