Gains from Trade

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Trade issues have become more salient for investors as the US seeks to redress the large and chronic trade deficit.  In part, the issue turns on the size of the trade deficit.  Much work has been done that suggests the shortfall may be not accurately measured.  One of the knock-on consequences is that US savings may be undercounted as well.  

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From the Securities Lending Trading Desk

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M&A has been a key demand driver this week.  In the UK, GVC Holdings received shareholder approval for the acquisition of Ladbrokes Coral with 99.97% of votes in favor of the deal. Elsewhere, the healthcare segment is in focus after Cigna agreed to buy Express Scripts Holding Co.(ESRX) in cash and stock and Singapore’s state-owned investment firm, Temasek Holding Pte, announced its plans to sell a $1 billion stake in Celltrion Inc and its affiliate Celltrion Healthcare Co.

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Dollar Firms Ahead of US CPI Data

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  • Many see the eruption of the scandal that threatens senior Japan government officials as yen positive
  • Prime Minister May confronted Russia on allegations that it used nerve gas in the UK
  • The US government blocked Broadcom’s $117 bln acquisition of Qualcomm; US reports February CPI
  • The OECD just upgraded its global growth forecasts
  • Brazil January retail sales are expected to rise 3.5% y/y; Mexico January IP is expected to rise 0.4% y/y

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EM Preview for the Week Ahead

blog-icons-empreview emerging markets previewEM FX ended Friday on a firm note, and capped off a mostly firmer week.  MXN, KRW, and ZAR were the best performers last week, while CLP, CZK, and PLN were the worst.  US jobs data was mixed, with markets focusing on weak average hourly earnings rather than on the strong NFP number.  Still, the data did nothing to change market expectations for a 25 bp by the FOMC this month. Continue reading