There are many potential triggers or combination of triggers that investors monitor – increasingly now given where we are in the current cycle – to try to predict when the next recession will arrive. It is hard to pinpoint specific causes historically aside, perhaps, from catastrophic policy (fiscal or monetary) mistakes or unanticipated global economic shocks. The reality is that many of the potential triggers themselves are inter-related and can result from a recession rather than indicate that a recession is imminent.
US President Donald Trump unilaterally started the trade war with China and he shows no signs of letting up. His policies on trade mark a major departure from America’s long-standing commitment to free markets. The combination of protectionist measures and fiscal profligacy is likely to further increase the challenges faced by American companies in their quest to compete internationally by pushing up the real effective exchange rate.
Tasked with generating over USD26bn in new investment over five years, Argentina’s Public-Private Partnership programme has been hailed by international experts and bankers as world-leading in both structure and ambition. But as the country’s economy – and currency – continue to stumble, fresh questions are being raised about whether it will live up to expectations.
Although the pause in the cuts has come ahead of expectations, the basic interest rate hit an unprecedented level and, this time, it is here to stay. Even if some part of the monetary loosening is temporary, likely to revert when inflation is converging to its goal, there is a good chance of the Selic rate not coming back up to two digits. A key condition for that is the approval of Social Security reform that fends off the risks of public debt insolvency.
As Turkey's Central Bank finally responds to the plight of Turkish lira with a 300bp overnight rate hike, Renaissance Capital's global chief economist Charlie Robertson looks back at how the country got itself into this pickle - and some of the possible solutions that could boost the economy.
Mozambique’s recent default on bond obligations, due to copious amounts of hidden loans, was a shock for investors in the region, seen by many as a harbinger of more fiscal troubles on the horizon for Sub-Saharan Africa. Reports in the local press may indicate a familiar pattern emerging in Zambia – but for now, analysts are giving it the benefit of the doubt.
Brazil is still a teenager when it comes to the functioning of democratic institutions: a country that seeks a path to civility, but not without stumbling first.
The common denominator linking the US Trade War with China, sanctions against Russia and the attacks on Syria was that there were no attempts made to find solutions to these conflicts within multilateral institutions, such as the UN and the World Trade Organisation (WTO). The word used to describe the act of seeking justice outside the formal framework of the law is vigilantism. Vigilantism leads to abuses of power, miscarriages of justice and insecurity. The descent into vigilantism will make the world a less safe place.
Gulf sovereigns tapped the debt market on an unprecedented scale over the past couple of years as banking liquidity tightened and the hunt for yield pushed investors into new territory, setting the stage for more non-financial corporate bond issuance and a huge funding culture shift among the region’s enterprises. But there may be reason to believe what began to be seen as a funding revolution in the region could be stopped in its tracks.
- Yes, Brazil Has an Agenda
- Pro-Western Stans: Central Asian Republics Mulling Capital Markets Push
- CASE STUDY: MTP Navigates Regulatory Unknowns to Issue Mexico’s First Tower Securitization
- The War on Trade: How US Protectionism Threatens Global Stability
- On the Ground, Off the Record in Africa: Public Debt Access, ESG, and Reform
12 Jul 2018
10 Jul 2018