In this edition we highlight:
- Five themes for quarter three – ECB and Fed policy, an analysis of the Fed’s composition, key political events on the horizon, and what it all means for currency markets.
- A landscape of Emerging Market countries that has to be navigated carefully, with an eye toward strong economic fundamentals and low political risks.
- Masashi Murata also offers an overview of Emerging Market countries.
- Currency Forecasts and an analysis of productivity and wage growth.
Read the full Q3 2017 FX Quarterly.
Taiwanese assets have performed well this year. Strong fundamentals and a stabilizing mainland economy should continue to underpin Taiwan’s outlook. Continue reading
Bullish sentiment for U.S. assets leads to increased IPO activity. In Asia, one of Japan’s largest car airbag manufacturers filed for bankruptcy on Monday. China’s domestic equities will join MSCI’s benchmark indexes, marking a landmark step in the continued integration of the nation with the global financial system. The Finnish construction company, Yit Oyj has sought to acquire Lemminkainen Oyj as it bids to increase its footprint in northern Europe.
Toward the end of 2015, Portugal bailed in some senior creditors in addressing a failed bank. Many observers were aghast. This was thought to be horrific and uncivilized by some of the very same people who are critical of the EU and Italy’s decision not to bail in senior creditors in the two failed regional banks in Italy.
They were wrong about Portugal. It was not a watershed event that spurred capital flight from Europe. And they are wrong about Italy. This does not end banking union, and if Europe moves to two-speed, as some proposal for EU reform post-Brexit suggested, it will not be because of Italy and the EU’s decisions regarding Veneto Banca and Banca Popolare di Vicenza.
US Commerce Secretary Ross promised to conclude the special investigation into US steel imports in the name of US national security by the end of the month. The outcome of the investigation is largely a foregone conclusion. Even before the investigation began, Ross said he would need less than a third of the allowable time.