Fulcrum Perspectives

An interactive blog sharing the Fulcrum team's policy updates and analysis.

Francis Kelly Francis Kelly

Read Around the World in a Weekend April

April 29, 2022

RUSSIA

  • Microsoft Blog “The hybrid war in Ukraine”

    Microsoft released a report detailing the relentless and destructive Russian cyberattacks they have observed in a hybrid war against Ukraine, and what we’ve done to help protect Ukrainian people and organizations. Starting just before the invasion, we have seen at least six separate Russia-aligned nation-state actors launch more than 237 operations against Ukraine – including destructive attacks that are ongoing and threaten civilian welfare. The destructive attacks have also been accompanied by broad espionage and intelligence activities. 

  • Rand Corporation “Russia’s Tragic Failure to Reform Its Economy”

    Russia's invasion of Ukraine and resulting sanctions will likely devastate Russia's economy. If the country had taken a more productive economic course over the past two decades, it might be looking toward a different future—one in which economic reforms had more tightly integrated Russia with the economically advanced countries, enhanced Russian influence and power, and built global trust. Instead, Russia has cast the West as its enemy, and its influence, power, trust, and reputation are shattered.

     

  • Foreign Affairs “What Does the West Want in Ukraine?”

    Council on Foreign Relations President Richard Haass asks the question of how success in Ukraine will be defined and argues it needs to be done now – before it is too late.

China

  • Carnegie Endowment for International Peace “US-China Technological ‘Decoupling’: A Strategy and Policy Framework”

    Washington has awakened to find the United States deeply technologically enmeshed with its chief long-term rival. America built those technology ties over many years and for lots of good reasons. China’s tech sector continues to benefit American businesses, universities, and citizens in myriad ways—providing critical skilled labor and revenue to sustain U.S. R&D, for example. But that same Chinese tech sector also powers Beijing’s military build-up, unfair trade practices, and repressive social control. What should we do about this? 

  • Rhodium Group “Chinese FDI in Europe: 2021 Update”

    Chinese outbound investment to the rest of the world stalled in 2021. While overall global FDI rebounded strongly, Chinese outbound FDI edged up by just 3 percent to USD 114 billion (EUR 96 billion). Meanwhile, China’s global outbound M&A activity slipped in 2021 to a 14-year low, with completed M&A transactions totaling just EUR 20 billion, down 22 percent from an already weak 2020.

 

India

  • Carnegie Endowment for International Peace “What is in Our Interest”: India and the Ukraine War”

    As Russia’s war in Ukraine unfolds, India’s national interests have so far dictated a position of formal neutrality. Here are the factors New Delhi faces in balancing its foreign policy priorities.

  • Brookings Institution Podcast “Why globalization is shifting in favor of India, not China”

    Arvind Subramanian, senior fellow at Brown University’s Watson Institute and Center for Contemporary South Asia, and former chief economic advisor to the Government of India, talks with host David Dollar about a range of trade and foreign relations issues India faces. In particular, he explains why globalization is shifting in India’s favor rather than China’s, how India views trade relations with China, Russia, and the West, and prospects for continued good relations with the United States, especially as India takes a more neutral stance on Russia’s war against Ukraine.

 

Pakistan

  • The Diplomat Podcast  “What’s Driving Pakistan’s Political Crisis?”

    Pakistan’s political arena is in turmoil. Prime Minister Imran Khan, facing a no-confidence vote, made a last-ditch attempt to avoid his fate by dissolving Parliament altogether, alleging a foreign plot headed by the U.S. to oust him. The Supreme Court intervened, allowing the vote to proceed, but Khan and his PTI are refusing to recognize the new government. Most PTI lawmakers resigned, leaving Pakistan’s National Assembly with 100 open seats. Meanwhile, the Pakistani military, the “hidden hand” behind national politics, has attempted to remain neutral – but its lack of support helped crown Khan’s replacement.

Lebanon

  • Carnegie Middle East Center “Resurrecting Arafat in Beirut?”

    Hamas, with Hezbollah’s help, is building up a military presence in Lebanon, whose ultimate consequences could be devastating.

 

Iran

  •  Carnegie Sada “The Geopolitics of the Iran-Qatar Electricity Grid Connection”

    Last February, during Iranian President Ibrahim Raisi’s visit to Qatar, the two countries agreed to connect electricity grids. Currently, Iran’s electricity network is connected to Iraq, Azerbaijan, Armenia, Turkmenistan, Afghanistan, and Pakistan. For Iran, this is a step towards strengthening energy diplomacy, but without a change in Iran’s foreign policy — that is, without the removal of sanctions and attracting foreign investment — it cannot use its full potential in the energy sector and, ultimately, will not be able to increase its influence on the international stage.  

 

Africa

 

  • Foreign Affairs “Rebels Without a Cause: The New Face of African Warfare”

    In the past, most armed groups on the continent were focused on seeking to topple governments or secede and found new countries.  But the new face of many African conflicts today is one where those taking up arms are more likely to do so as a means of bargaining over resources.

Latin America/Caribbean

  • IMF Blog “Latin America Faces Unusually High Risks”

    The War in Ukraine, higher inflation, tighter financial conditions, economic decelerations of key trading partners, and social discontent may dim growth prospects.

  • Center for Strategic and International Studies “The Caribbean in the Crossfire”

    Between Covid-19, Narcotics, China, and Russia’s Invasion of Ukraine, the Caribbean is facing unprecedented challenges – all of which should be of maximum concern to the United States.

  • Americas Quarterly “Latin America Doesn’t Want a New Cold War”

    Regional governments should take steps to ensure they are “not once again a battleground for larger powers,” an Argentine scholar writes.

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Francis Kelly Francis Kelly

Global Calendar April 25 - May 1, 2022

This is Fulcrum Macro Advisors weekly calendar of key political and economic events we are watching in the coming week.  Please let us know if you have any questions.

Monday, April 25, 2022

Political/Social Events –

Economic Reports/Events –

  • US Chicago Fed national activity index (Mar), Dallas Fed manufacturing index (Apr)

  • South Korea GDP growth rate figures

  • Japan leading economic index (Feb), unemployment rate (Mar)

  • Spain PPIs

  • Turkey business confidence (Apr), capacity utilization (Apr)

  • Germany ifo Business Climate (Apr), ifo Current Conditions (Apr), ifo Expectations (Apr)

  • Eurozone construction output (Mar)

  • UK CBI industrial trends orders (Apr), CBI business optimism Index Q2

  • Brazil Central Bank focus market readout,  consumer confidence (Apr), current account (Feb, Mar), FDI (Feb, Mar), federal tax revenue (Mar)

  • Mexico's economic activity reports (Feb)

 

Tuesday, April 26, 2022

Political/Social Events –

Economic Reports/Events –

  • World Trade Organization Committee on Subsidies and Countervailing Duties

  • US durable goods (Mar), non-defense goods orders (Mar), S&P/Case-Shiller home prices (Feb), new home sales (Mar), Richmond Fed manufacturing index (Apr), Dallas Fed services index (Apr)

  • China industrial profits (Mar)

  • South Korea's consumer confidence (Apr)

  • Australia's inflation rate figures

  • Indonesia FDI (Q1)

  • South Africa's leading business cycle indicators (Feb)

  • Mexico retail sales (Feb)

  • Argentina retail sales (Feb)

 

Wednesday 27, 2022

Political/Social Events –

  • Pakistan’s new Prime Minister Shahbaz Sharif visits Saudi Arabia for his first state visit

  • Somalia to elect Speaker and Deputies of Senate.

  • Israel’s Holocaust Martyrs and Heroes Remembrance Day

  • Sierra Leon celebrates National Day

  • South Africa celebrates Freedom Day marking the date when Nelson Mandela was elected President in 1994

Economic Reports/Events –

  • World Trade Organization Dispute Settlement Body meets in Geneva

  • US MBA Purchase Index and other mortgage data including pending home sales,  Wholesale Inventories, Goods Trade Balance (Mar), Retail Inventories (Mar), EIA Gasoline Stocks Changes and other oil/distillates data

  • Russia GDP (Feb, Mar), Unemployment Rate (Mar), Retail Sales (Mar), Real Wage Growth (Feb), Industrial Production (Mar), Corporate Profits (Feb), Business Confidence (Apr)

  • Canada Employment Change (Feb)

  • Germany GfK Consumer Confidence (May)

  • France Consumer Confidence (Apr)

  • South Korea Business Confidence (Apr)

  • Japan Retail Sales (Mar), Industrial Production (Mar), Bank of Japan monetary policy meeting/Interest Rate Decision, Bank of Japan Quarterly Outlook Report

  • Mexico Balance of Trade (Mar)

  • Brazil IBC-Br Economic Activity (Feb), Bank Lending (Feb, Mar)

  • Zambia inflation (Apr), trade data (Mar)

 

 

Thursday, April 28, 2022

Political/Social Events –

Economic Reports/Events –

  • US GDP (Q1), Initial Jobless Claims (Apr), PCE Prices, Real Consumer Spending, Kansas Fed Manufacturing Index (Apr)

  • China Caixin Manufacturing PMI (Apr)

  • Canada CFIB Business Barometer (Apr)

  • Spain Business Confidence (Apr), Construction Orders (Mar), inflation rate (Apr), Unemployment Rate (Mar)

  • Italy Economic Confidence (Apr), Business Confidence (Apr), Consumer Confidence (Apr), Industrial Sales (Apr)

  • France Unemployment figures (Mar)

  • Germany's Inflation Rate figures

  • Eurozone Economic Sentiment (Apr), Consumer Sentiment (Apr), Consumer Inflation Expectations (Apr)

  • Japan Housing Starts (Mar), Construction Orders (Mar)

  • South Korea Industrial Production (Mar), Retail Sales (Mar), Manufacturing Production (Mar), Construction Output (Mar)

  • Australia PPIs

  • Brazil PPIs

  • Mexico Unemployment figures (Mar)

  • Turkey Inflation Report

  • South Africa PPIs

  • Botswana Central Bank rate decision

 

 

Friday, April 29, 2022

Political/Social Events –

  • Russian President Putin to hold meetings on Russia’s metallurgical industry which has been hit hard by global sanctions

  • Portugal’s parliament to vote on the working majority Socialist budget draft

Economic Reports/Events –

  • US Consumer spending (Mar)Personal Income (Mar), PCE Price Indexes, Chicago PMI (Apr), Michigan Consumer Expectations (Apr)

  • China NBS Manufacturing PMI (Apr), Non-Manufacturing PMI (Apr), General PMI (Apr)

  • France GDP, PPIs, Inflation figures (Q1), Household Consumption (Mar)

  • Germany GDP figures, Import Prices (Mar)

  • Italy GDP (Q1), PPIs (Mar), Inflation Rate figures (Apr)

  • Spain GDP (Q1), Retail Sales (Mar), Current Account (Feb)

  • Turkey Balance of Trade (Mar)

  • Eurozone Loans to Households, Loans to Companies (Mar)

  • Russia Central Bank interest rate decision

  • Mexico GDP

  • India Infrastructure Output (Mar), FX Reserves (Mar)

  • Brazil Unemployment Rate (Mar), Nominal Budget Balance (Feb)

  • Canada GDP (Feb), Raw Materials Prices (Mar), Budget Balance (Feb)

  • Argentina Consumer Confidence (Apr)

  • Kenya inflation numbers (Apr)

  • Uganda inflation numbers (Apr)

  

Saturday, April 30, 2022

Political/Social Events –

  • Vietnam celebrates Liberation Day – the anniversary of the fall of Saigon to Communists.

Economic Reports/Events –

  • South Korea Exports/Imports/Balance of Trade (Apr)

 

Sunday, May 1, 2022

Political/Social Events –

  • US takes over rotating Presidency of the UN Security Council from the UK

  • 2nd round of US-UK Trade Dialogue to be held in Aberdeen, Scotland

  • China starts five-day May Day holiday

  • May Day celebrated in various countries

Economic Reports/Events –

  • No major reports/events to report.

 

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Francis Kelly Francis Kelly

CSIS’ “Critical Questions” - The Next Wave is Not a Covid-19 Wave: Debt Sustainability in Developing Countries

I am pleased to be a co-author with my CSIS colleagues of this new “Critical Questions” analysis published by the Center for Strategic & International Studies (CSIS). You can also access the piece directly on the CSIS website HERE.

Q2: What's new about the current global indebtedness challenge? 

A2: Since 2010, the structure and characteristics of sovereign debt have transformed with new creditors and loan instruments coming into the mix. As a result, the composition of debt has become more diffused among creditors, with a riskier profile.

According to a recent article published in the Journal of International Economics, starting in 2000, China became the largest official lender to developing countries, surpassing the IMF and World Bank. China has led the way in terms of providing critical infrastructure needs to developing countries under its Belt and Road Initiative (BRI). However, the terms of these loans remain opaque, and they can burden countries with unsustainable debt. According to some analysts, 50 percent of Chinese lending is not recorded in international debt statistics. With China becoming a large official creditor through the BRI, there is not a clear picture on the characteristics of this debt, such as the amounts or the terms of the loans. Furthermore, there is a lack of clarity on which loans within the BRI are owed to government institutions, and which are owed to private firms. In April 2021, China announced that it would work to promote debt sustainability in developing countries, but there is still no clear demonstration of this.

At the same time, the debt profile of developing countries has become riskier. Low-income countries increased borrowing in global capital markets, which has resulted in a diffused creditor base. Some of these bonds were issued with collective action clauses, which “allows bondholders to agree on debt restructuring even when some bondholders are against restructuring as long as majority agrees.” This essentially facilitates debt restructuring, should it be needed. However, not all bonds have the collective action clause, which makes restructuring difficult to coordinate.

Moreover, the prospect of interest hikes in advanced economies complicates matters for developing countries. Before the Covid-19 pandemic, the world went through a long period of low interest rates and high levels of liquidity, which prompted many countries to increase external borrowing. Low-income and middle-income countries were able to access commercial financing, including from non-Paris Club official creditors. However, higher debt held by the private sector further increases developing countries’ exposure to external shocks and capital flow reversals. With higher interest rates, the cost of servicing future debt will rise. Higher interest rates also incentivize investors to divest from riskier assets in developing countries toward safer assets in advanced economies.

Q3: Do external conditions favor developing countries?

A3: Global macroeconomic conditions and Russia’s unprovoked war in Ukraine add another layer of complexity to the high indebtedness profile and will likely impact countries’ ability to service debt.

Inflationary pressures in advanced economies will prompt central banks to raise interest rates in the near future. Rising global interest rates are going to make it harder for developing countries to refinance foreign currency–denominated debt.

At the same time, Russia’s war in Ukraine is disrupting supply chains and commodity markets. The Inter-American Development Bank has recently conducted several scenarios modeling the magnitude of the fiscal impact on the Latin America and the Caribbean region. High prices of energy and staple foods will impact the fiscal health of commodity-importing countries. This can also affect commodity-exporting countries since they will need to provide relief to vulnerable populations in terms of fuel subsidies to provide relief for higher energy prices.

As a result of the war, economic sanctions placed on Russia have resulted in an impending default of its economy, further raising questions on whether it will be effectively isolated from the global market and be able to meet payments to foreign investors. Additionally, the G20 may be facing an existential crisis, impeding effective multilateral solutions in the short term and possibly in the long term.

Q4: What are current global tools to address high indebtedness and debt distress? 

A4: Currently, there is no single framework to bring all debtors and creditors at the table to facilitate the restructuring of debt.

In the past, there has been a series of large debt-restructuring programs that granted developing countries substantial debt relief, starting with the Paris Club in 1956, to programs such as the Brady Plan for Latin America in the late 1980s, the Heavily Indebted Poor Countries (HIPC) Initiative in the 1990s, and the Multilateral Debt Relief Initiative (MDRI) in the 2000s.

Recent initiatives include the G20 Debt Service Suspension Initiative (DSSI) and the G20 Common Framework for Debt Treatments to help 73 low-income countries address official bilateral creditors.

In 2020 and 2021, the G20 established the DSSI, which allowed for deferrals on official debt services for 73 low-income countries, particularly those dealing with continued financial fallout caused by the Covid-19 pandemic, among other issues. DSSI provided immediate liquidity support to help decrease the overall debt distress of vulnerable countries and assuage creditor demands. In 2020 and 2021, $6 billion and $7 billion in relief was administered, respectively, for 48 participating countries.  

Overall, international financial institutions, multilateral banks, and private lending entities significantly scaled up their capacities to provide financial assistance and new lending pathways. Part of the initiative also included the foundation of the Common Framework for Debt Treatments , which seeks to improve global debt sustainability and address insolvency and other liquidity issues in DSSI-eligible countries. The framework also aims to bring other creditors outside of the Organization for Economic Cooperation and Development (OECD), such as China and private entities, under a single structure. The framework, however, has encountered numerous challenges, particularly with its overall processes, enforcement, and completion of promises to borrowing countries dependent on its support. As a result, the framework's implementation or lack thereof has  frustrated participating countries and disincentivized other severely debt-distressed countries from participating. Looking ahead at the future of the framework given the geopolitical tensions with China and Russia, it is unclear whether there will be a functioning G20 to shepherd it. which seeks to improve global debt sustainability and address insolvency and other liquidity issues in DSSI-eligible countries. The framework also aims to bring other creditors outside of the Organization for Economic Cooperation and Development (OECD), such as China and private entities, under a single structure. The framework, however, has encountered numerous challenges, particularly with its overall processes, enforcement, and completion of promises to borrowing countries dependent on its support. As a result, the framework's implementation or lack thereof has  frustrated participating countries and disincentivized other severely debt-distressed countries from participating. Looking ahead at the future of the framework given the geopolitical tensions with China and Russia, it is unclear whether there will be a functioning G20 to shepherd it.

Q5: What’s next? 

A5: Institutions of the current multilateral debt architecture, including the World Bank and IMF, the G20, G7, OECD, and the Paris Club, are committed to helping countries through debt service relief, concessional financing, and debt restructuring. The United States will need to lead and incentivize borrowers to work within the multilateral structure. China will need to be brought to the table with a vision to manage this restructuring. China will not allow for debt haircuts, but it might be open about rescheduling payments. The solution is multistep rather than single step (like Brady Bonds), especially if global interest rates create time pressure.

This is an opportunity for developing countries to restructure debts where necessary and embark on a more sustainable fiscal path. In one or two years, several African countries will hit a major debt wall, and this will require restructuring and renegotiation. Low-income countries will need to raise revenues, in addition to committing to deeper economic reforms. In the current global economic landscape, developing countries will need to offer more concessions when requesting debt relief and restructuring.

The United States should work on building capacity and exporting knowledge and expertise on renegotiating transactions to other countries or companies. Specifically, it should ensure that new loans are consistent with fiscal spending and deficit plans, and guarantee that countries' debt remains sustainable. The U.S. government could also assist countries in developing a comprehensive approach to a cost-benefit analysis for accumulating debt and in improving debt reporting and debt statistics.

Also on the table is the development of the local currency capital markets so that countries can borrow on their own terms more regularly than in foreign currency. Most importantly, ensuring debt transparency will be critical. In order to accurately analyze debt sustainability in a country, all types of debt and creditors should be assessed, instead of being upheld to narrowly defined concepts of public debt. This assessment will help to better understand debt that poses a risk to a nation's public finances.

Multilateral institutions will need to play a role in assisting countries in building a comprehensive financing plan that is aligned with their development objectives and types of expenditures. Debt resolution can include instruments like sovereign guarantees, debt for policy swaps, and creative thinking that allows for official sectors to step in and speed up recovery. Working with multilateral institutions, the United States can lead a more incremental and adaptive solution, from both the private sector and local government perspective, and create a debt structure that brings all stakeholders, including large creditors such as China, to the table.

Daniel F. Runde is senior vice president, director of the Project on Prosperity and Development and holds the William A. Schreyer Chair in Global Analysis at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Romina Bandura is a senior fellow with the CSIS Project on Prosperity and Development. Frank Kelly is a non-resident senior associate with the CSIS Americas program. 

The authors would like to thank Elena Méndez Leal, Isabel Vander Molen, Sarthak Sharma, and reviewers for their support in producing this analysis. The authors would also like to thank the participants of a recent private roundtable on the issue for helping identify key discussion topics surrounding debt sustainability. 

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s). 

© 2022 by the Center for Strategic and International Studies. All rights reserved.

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Francis Kelly Francis Kelly

A Great New Podcast: “Vying for Talent”

My friend, Ryan Hass (Senior Fellow, Foreign Policy Center and Michael H. Armacost Chair at the Brookings Institution) and Jude Blanchette (Freeman Chair in China Studies at the Center for Strategic Studies (CSIS), have just launched a superb new podcast. Called “Vying for Talent”, the pair explore the role human talent plays in the sprawling competition between China and the United States. They are tackling an issue that is defining the competition of our age. Sign up and listen close - it really is great and highly informative.

You can sign up and listen via Apple, Spotify, or wherever you listen to podcasts. Send feedback email to podcasts@brookings.edu, and follow and tweet at @policypodcasts on Twitter.

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Francis Kelly Francis Kelly

Global Events this Week April 17 - 23, 2022:

This is Fulcrum Macro Advisors weekly calendar of key political and economic events we are watching in the coming week.  Please let us know if you have any questions.

___________________________ 

Sunday, April 17, 2022:

Political/Social Events:

Economic Reports/Events:

  • Nothing significant to report.

Monday April 18, 2022:

Political/Social Events – 

Economic Reports/Events –

  • Markets closed in most of Europe, Singapore, Australia, New Zealand, South Africa for Easter holiday

  • World Bank/International Monetary Fund (IMF) Spring Meetings commence (until April 23rd).

  • US National Association of Home Builders April Index

  • Russia expected to soften cash operations restrictions and allow banks to sell hard currency.

  • China GDP for Q1, March growth data, retail sales, fixed assets, property investment, residential property sales

  • Canada March housing starts

  • Spain trade balance figures

  • German Buba Monthly report

  • Brazil inflation index

  • Tesla plans to resume production at its Gigafactory in Shanghai after 3 weeks of COVID lockdown.

Tuesday April 19, 2022:

Political/Social Events – 

  • Sri Lanka’s main opposition party is expected to submit a no-confidence motion again the government and impeachment motion against the President as a result of the ongoing economic crisis.

  • NATO begins annual cybersecurity wargames – Operation Locked Shields – in Tallinn, Estonia

  • Armenia’s President Nikol Pashinian to travel to Moscow.

  • The UN Security Council holds consultations on its mission in Libya.

  • African Union holds an expert session on migration, refugees, and internal displaced people.

  •  Timor Leste holds second round of presidential elections.

Economic Reports/Events –

  • IMF releases April 2022 World Economic Outlook

  • US building permits (Mar.), housing starts

  • China’s People’s Bank of China loan prime rate

  • Japan exports/import figures, trade balances, industrial production, capacity utilization figures

  • Canada existing home sales (Mar.)

Wednesday 20, 2022: 

Political/Social Events – 

  • G-7 Finance Ministers meet in Washington DC to discuss global financial issues including a coordinated response to rising inflation (they are all in Washington for World Bank/IMF Spring Meetings).

  • G-20 Finance Ministers meet in Washington DC to discuss global financial issues.

  • China holds Boao Forum in Hainan, China.

  • Honduras’s former President Juan Orlando Hernandez to be extradited to the US to face trial for drug trafficking charges.

  • Democratic Republic of the Congo’s parliament debates proposed electoral reform law.

Economic Reports/Events –

  • US March existing home sales, Fed’s Beige Book released, crude oil inventories, gasoline production, heating oil stockpiles

  • Japan March trade balance

  • Germany March PPI

  • Italy February trade balance

  •  Eurozone February industrial production, trade balance

  •  Canada March CPI

  • Russian government expected to submit proposals for raising wages, pensions, and minimum wage; PPIs scheduled to be reported

  •  South Africa inflation (Mar)

  • Ghana GDP (Q4 and all of 2021)

Thursday, April 21, 2022:

Political/Social Events – 

Economic Reports/Events –

Friday, April 22, 2022:

Political/Social Events – 

Economic Reports/Events –

  •  Federal Reserve “Black-Out Period” begins in advance of next Open Meeting

  • US PMIs, retail sales figures

  •  France PMIs

  • Germany PMIs

  • Eurozone PMIs

  • Hong Kong PMIs

  •  Japan PMI (Mar.), Jibun Bank PMIs

  • UK GfK Consumer Confidence (Apr.), retail sales (Mar.)

  • Canada industrial production price (Mar.), retail sales (Feb.)

  • Mozambique gets S&P Global Ratings assessment

Saturday, April 23, 2022: 

Political/Social Events – 

  •  France holds second round of Presidential Elections

  •  Slovenia holds National Assembly elections

Economic Reports/Events –

  • World Bank/IMF Meetings conclude in Washington DC

 

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Francis Kelly Francis Kelly

Global Calendar April 11 - 17, 2022

Monday, April 11, 2022

Political/Social Events –

Economic Report/Events –

  • China consumer price index (CPI), producer price index (PPI) data (Mar)

  • Czech Republic CPI data (Mar)

  • Japan PPI figures (Mar), machine tool orders Bank of Japan holds its quarterly branch managers’ meeting with opening remarks delivered by governor Haruhiko Kuroda

  • UK GDP (Mar) estimate, trade figures, construction output data

  • South Africa manufacturing production (Feb)

  • Malaysia industrial production (Feb), manufacturing sales (Feb)

Tuesday, April 12, 2022

Political/Social Events –

  • EU Affairs ministers meet in Luxembourg

  • United Nations Security Council to discuss Colombia as Colombian President Duque addresses the body

  • Ukrainian President Zelensky to address the Lithuanian parliament

Economic Reports/Events –

  • European CentralBank’s Q1 euro area bank lending survey

  • France trade figures(Feb)

  • Germany CPI data(Mar)

  • Eurozone ZEW economic sentiment survey

  • India industrial production figures (Feb), March CPI data (Mar)

  • OPEC’s monthly oil market report

  • UK labor market statistics

  • US CPI data (Mar)

Wednesday, April 13, 2022

Political/Social Events –

  • Mexico’s lower House of Congress expected to vote on electricity sector reform

  • The US Senate Armed Services Committee is scheduled to hold a hearing on ballistic missile defense strategy and needs

Economic Reports/Events –

  • China trade balance (Mar)

  • Bank of Canada interest rate announcement

  • Eurozone industrial production data (Feb)

  • Italy industrial production figures (Feb)

  • Reserve Bank of New Zealand monetary policy meeting

  • UK CPI (Mar) and retail price index (RPI) data

  • US PPI (Mar)

  • South Africa retail sales (Feb)

  • Namibia’s Central Bank interest rate decision

  • Ghana inflation (Mar)

 

Thursday, April 14, 2022

Political/Social Events –

  • Russian President Putin expected to meet with the lower house of Parliament (Duma)

  • Kenyan United Democratic Alliance to hold primary before Kenya’s August 2022 general election

  • The Sikh festival of Vaisakhi is celebrated, marking the Sikh New Year

  • North Korea observes the birth of the late North Korean Leader Kim Il Sung, father of current North Korean leader Kim Jun-Un

Economic Reports/Events –

  • European Central Bank’s monetary policy meeting/rate decision in Frankfurt

  • India trade statistics

  • Israel Q4 GDP figures

  • UK Q1 credit conditions and bank liabilities surveys

  • US March retail sales figures, Michigan Consumer Sentiment (Apr)

  • South Africa mining production (Feb), Trade conditions survey (Feb & Mar), Bloomberg Economic survey (Apr)

  • Nigeria inflation numbers (Mar)

  • Namibia inflation numbers (Mar)

  • Uganda Central Bank interest rate decision

  • Turkey Central Bank interest rate decision

  • Philippines overseas remittances (Feb)

  • Brazil current account (Feb)

Friday, April 15, 2022

Political/Social Events –

  • Passover observed

  • Good Friday observed

  • China expected to sell 500,000 tons of soybeans from national reserves

  • US deadline for individuals to file their tax returns

  • 110th anniversary of the sinking of the Titanic

Economic Reports/Events –

  • People’s Bank of China meeting

  • France CPI figures (Mar)

  • Italy CPI figures (Mar)

  • Poland CPI figures (Mar)

  • US, March industrial production figures, US Empire manufacturing index (Apr)

  • India trade balances (Mar)

  • China's new home prices (Mar)

  • European Central Bank Survey of Professional Forecasters 

Saturday, April 16, 2022

Political/Social Events –

Economic Reports/Events –

  • Nothing of significance

Sunday, April 17

Political/Social Events –

  • Easter Sunday Observed in Western Christian churches

Economic Reports/Events –

  • China’s GDP, retail sales (Mar), industrial production (Mar)

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Francis Kelly Francis Kelly

San Francisco is always beautiful…

After a long week on the West Coast that ended in San Francisco, I am still in awe of the beauty of the City by the Bay. It has tremendous social and political challenges but it will be back.

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Francis Kelly Francis Kelly

Global Events This Week

March 26 - April 3, 2022

This is Fulcrum Macro Advisors weekly calendar of key political and economic events we are watching in the coming week.  We hope this is helpful. Please let us know if you have any questions.

Saturday, March 26:

Political Events/Social Events –

Economic Events -

  • China February industrial profits

 

Sunday, March 27:

Political Events/Social Events –

Economic Events -

  • No significant reports/events to report.

 

Monday, March 28:

Political Events/Social Events –

Economic Events –

  • US reports goods trade balance (Feb), wholesale inventories (Feb), Retail inventories (Feb), Dallas Federal Reserve manufacturing index (Mar)

  • Brazil reports foreign direct investment, current account, Brazilian Central Bank Market Readout

  • Mexico reports balance of trade (Feb)

  • Argentina retail sales (Jan)

  • South Korea consumer confidence (Mar)

  • Japan unemployment rates, jobs/applications (Feb), Bank of Japan summary of opinions

  • Israel unemployment rates

Tuesday, March 29:

Political Events/Social Events–

Economic Events –

  • US S&P/Case-Schiller Home Price (Jan), House price index (Jan), JOLTS job openings and job quits (Feb), Conference Board’s consumer confidence (Mar), Dallas Fed Services Index (Mar)

  • UK Consumer credit, mortgage approvals, mortgage lending, net lending to individuals (all Feb)

  • Canada weekly earnings average

  • Germany CfK Consumer Confidence (Mar)

  • Australia retail sales (Feb)

  • Argentina economic activity (Jan), API crude oil stock change

  • Japan retail sales (Feb)

  • South Africa unemployment rate, SACCI Business Confidence (Mar & Feb)

  • Spain retail sales (Feb)

  • Kenyan Central Bank rate decision

 

Wednesday, March 30:

 Political Events –

Economic Events –

  • US GDP price index, GDP growth rate, PCE prices, Core PCE prices, Real consumer spending, GDP sales, EIA crude oil stocks, EIA gasoline stocks, EIA heating oil stocks, EIA refinery crude runs change, EIA distillate stocks change, EIA distillate fuel production change, EIA cushing crude oil stocks change, EIA crude oil imports change, mortgage applications, 30-year mortgage rates, mortgage market index, mortgage refinance index, MBA purchases index, ADP employment change (Mar)

  • Germany import prices (Feb), inflation rate figures

  • Turkey economic confidence (Mar)

  • Italy industrial sales (Jan)

  • Eurozone economic sentiment, industrial sentiment, services sentiment, consumer sentiment, and consumer inflation expectations (all for Mar);

  • Italy PPI (Feb)

  • Spain inflation rate figures, business confidence (Mar)

  • Brazil PPI (Feb), bank lending (Feb), net payrolls (Feb)

  • South Africa price sector credit (Feb), money supply, budget balance (all Feb)

  • Mexico unemployment (Feb)

  • Russia  GDP (Feb), unemployment rate (Feb), real wage growth (Jan), retail sales (Feb), business confidence (Mar), corporate profits (Jan)

  • South Korea industrial production (Feb) retail sales (Feb), manufacturing production (Feb), construction output (Feb)

  • Japan industrial production (Feb)

  • Mexico fiscal balance (Feb)

  • Mozambique Central Bank interest rate decision

  • Egypt GDP

 

Thursday, March 31:

Political Event/Social Events –

 Economic Events –

  • US personal spending, personal income, PCE price index (all Feb), intial jobless claims figures (Mar), Core PCER price index figures (Feb), Chicago PMI (Mar), EIA natural gas stocks (Mar), quarterly grain stock figures, prospective planting figures (Mar)

  • China NBS manufacturing PMIs (Mar); struggling Chinese real estate company Evergrande expected to miss publication deadline of 2021 financial results

  • Japan housing starts (Mar), construction orders (Mar), Tankan large manufacturers index Q1, Tankan non-Manufacturing outlook Q1, Tankan Small Manufacturers Index Q1

  • Germany retail sales (Feb), unemployment rate (Feb), unemployed persons, unemployment change, unemployment rate (Mar)

  • UK GDP growth (final Q4), business investment numbers

  • France inflation rate, household consumption (Feb), PPIs (Feb), harmonized inflation rate (Mar)

  • Italy unemployment rate (Feb), inflation rate (Mar)

  • Spain concurrent account (Jan)

  • Eurozone unemployment rate (Feb)

  • Turkey balance of trade (Feb), foreign exchange reserves (Mar)

  • South Africa PPIs (Feb), trade balance (Feb)

  • India government budget value (Feb), infrastructure output (Feb), current account, external debt

  • Brazil unemployment rate (Feb), nominal budget balance (Feb)

  • Canada GDP (Jan), CFIB business barometer (Mar)

  • Australia building permits, private house approvals, private sector credit (Feb), Markit manufacturing PMI (Mar)

  • Angola Central Bank interest rate decision

  • Namibia 2021 GDP, money supply (Feb)

  • Zambia 2021 GDP, inflation figures (Mar), trade balance (Feb)

  

Friday, April 1:

Political Events/Social Events –

  • European Union-China Summit held virtually to discuss trade and political tensions

  • The UK assumes the presidency of the UN Security Council

  • Russia expected to implement indexation of pensions and other social safety net measures

  • Iran celebrates Republic Day – the anniversary of the 1979 Islamic Revolution

  • April Fools’ Day (no fooling!)

Economic Events –

  • US unemployment rate, non-farm payrolls, participation rate, avg. hourly earnings; avg. weekly hours, government payrolls, manufacturing payrolls, Markit manufacturing PMI, ISM’s  manufacturing figures, ISM manufacturing PMI, ISM manufacturing employment, ISM  manufacturing prices, construction spending, Baker Hughes oil rig count (Apr), total vehicle sales (Mar)

  • UK nationwide housing prices (Mar)

  • Turkey’s Istanbul Chamber of Industry Manufacturing PMI (Mar)

  • Spain Markit manufacturing PMI (Mar)

  • Italy Markit Manufacturing PMI (Mar)

  • France Markit Manufacturing PMI (Mar)

  • Germany Manufacturing PMI (Mar)

  • Eurozone inflation rate (Mar), CPI, Manufacturing PMI (Mar)

  • South Korea exports, balance of trade, imports (Mar), Markit PMI (Mar), inflation rate (Mar)

  • Australia home loans (Feb), commodity prices (Mar)

  • Indonesia Markit manufacturing PMI (Mar), inflation rate, core inflation rate

  • China Caixin manufacturing PMI (Mar)

  • Russia GDP YoY/Q4, Markit manufacturing (Mar)

  • Japan Jibun manufacturing PMI (Mar)

  • India foreign exchange reserves (Mar), balance of trade, exports, imports (Mar)

  • Brazil industrial production figures (Mar), Markit manufacturing PMI (Mar), balance of trade

  • Canada Markit manufacturing PMI (Mar)

  • Mexico Markit manufacturing PMI (Mar)

  • Nigeria PMIs (Mar)

  • South Africa manufacturing PMI (Mar), Moody’s rating assessment

 

Saturday, April 2:

Political Events/Social Events –

 Economic Events –

  • No significant reports/events

  

Sunday, April 3:

Political Events/Social Events –

Economic Events –

  • Israel foreign exchange reserves

  • Mexico business confidence (Mar)

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Francis Kelly Francis Kelly

Read Around the World in a Weekend: March 25, 2022

Please find our recommended weekend reads covering key issues and events around the world.  We hope you find these informative, useful, and perhaps even fun.  Please let us know if you want us to add anyone to our mailing list.

Russia/Ukraine/Belarus

  • Rand Corporation “Russian Grand Strategy: Rhetoric and Reality”

    First published in September 2021 (and included in an earlier Read Around the World), we thought it worthwhile to reconsider this large review and assessment of Russia’s – and Putin’s – Grand Strategy going forward.

  •  Chatham House’s Belarus Initiative “Poll of Belarusians’ Views on the military conflict between Russia and Ukraine”

    The poll, conducted between March 5-14, showed only three percent of the urban population support Belarusian troops being involved in the war on Ukraine. And a majority of them do not support Russian troops being based in Belarus as well expecting the war will have “serious socio-economic consequences” on their way of life.

United States

  •  Defense One “State of Defense”

    The daily defense publication takes an in-depth look at the state of the US Defense posture, branch by branch, in the face of growing security risks around the world.

  •  Foreign Policy “US Grand Strategy After Ukraine”

    Seven leading foreign policy strategists weigh in on how the war will shift US foreign policy in the short, medium, and long term.

  •  AmCham EU “The Transatlantic Economy 2022”

    The Transatlantic Economy 2022 presents the most up-to-date facts and figures about the economic relationship. The study includes dedicated profiles for 30+ European countries and all US states. This year’s study features new insights into how the war in Ukraine affects the transatlantic relationship, the impact of the COVID-19 pandemic, prospects for the recovery, global supply chain issues, relations with China and the transatlantic energy economy.

     

  • University of Virginia Center for Politics “Are Latinos Deserting the Democratic Party? Evidence from the Exit Polls”

    One key question in American politics is the trajectory of Latino voters. Donald Trump performed better in 2020 with Latino voters than he did in 2016, particularly in places like South Texas and South Florida.  However, an analysis of the longer-term trend in Latino presidential voting shows that this growing voting bloc is not necessarily trending one way or the other. Presidential incumbency appears to have a stronger influence on Latino voters than on other demographic groups.

Africa

  • Institute for Security Studies (South Africa) “Africa holds the answers to Europe’s wartime energy crisis”

    Europe needs to swap its dependence on fossil energy from Russia with renewables from Africa. For example, Theoretically, the Sahara could supply four times the world’s current energy demand. Even a fraction of that could replace the energy from Russian gas imports. Solar can also ramp up rapidly, perhaps beating the plans to build more liquefied natural gas terminals.

Latin America

  •   Wilson Center “China’s Investments and Land Use in Latin America”

    The report argues that in order to understand the environmental impacts of China’s trade and investment in Latin America requires nuance. It focuses on multiple factors behind the environmental degradation associated with the soy, copper, beef, and pork industries: the nature of the resource, local legal frameworks, and global industry standards. The report highlights cases in which poor decision-making by both Chinese companies and Latin American countries is driving resource extraction to a tipping point.

Middle East

  • Carnegie Middle East Center “Only Going to Get Worse”

    In this YouTube interview, the chief of water, sanitation and hygiene (WASH) at the United Nations Children’s Fund (UNICEF) discusses the growing challenge of the water scarcity situation in the Middle East and Africa.

Book Recommendation of the Week:

The Anarchy: The East India Company, Corporate Violence, And the Pillage of an Empire

(by William Dalrymple, Bloomsbury Press 2019, 552 pages)

Imagine a giant private equity firm that operates with complete impunity, no government regulation or oversight, no bounds on their greed. They take over a large swath of a foreign country and begin to mint money, figuratively and literally. And they also have their own army, which they deploy to subdue the locals whenever they complain too much.

 

Welcome to the East India Company, which we learn all about in the superb  “The Anarchy: The East India Company, Corporate Violence, and the Pillage of An Empire,” written by William Dalrymple.

A corporate history that grabs you and gives you a vivid, and at many points, horrifying portrait of arguably the most powerful companies in history.

 

What makes Dalrymple’s book particularly interesting – and differentiates it from numerous other histories of the East India Company – is his deep and thorough research of Indian source material. He gives a fresh, holistic account of the Company not just from the Western perspective but also from the Indian perspective. And that is important because with it comes an illuminating portrait of the majesty and richness of the various Indian, Iranian, and Afghani dynasties that thrived – and died – during the Company’s operations. 

 

What I found rather stunning in Dalrymple’s history of the Company is something I suspect most readers will not expect: The Company was, by and large, a rather poorly run operation. There are numerous instances of near-collapse – once almost cratering the entire British economy and forcing the collapse of multiple leading British and Continental European banks (which Dalrymple cleverly compares to the 2008 financial crisis).  

 

But the money the Company  made in the good years. Oh, the money! Staggering sums even by today’s standards.  Many a poor or lower-middle-class English boy with a sense of adventure struck out to Bombay or Madras or some other balmy place in India where they Company operated, returning to London years later filthy rich (albeit, only if they survived the near constant warfare and deadly sicknesses).  The most prominent of all of them being Lord Clive. Richard Clive was born in 1725, one of thirteen children to a modestly successful lawyer. He proved to be a violent, nasty boy – even running a protection racket as a teenager. With these rough skills and dangerous disposition, he journeyed to India in 1744 as a simple clerk.

I do not want to ruin Dalrymple’s extraordinary and devastating portrayal of Clive in India, but I’ll tease you with this: when all was said and done, Clive ended up being the wealthiest man in all of Europe. He became Lord Clive, 1st Baron Clive, a man so rich that his wife’s pet ferret even had its own diamond-studded necklace. But money doesn’t buy happiness, and clearly, Clive never found it. He ended up killing himself in 1774 at his massive Berkley Square mansion at the age of 49 by stabbing himself in the throat with a penknife.

 

This is an important book to understand how Britain gained much of its long-term wealth that survives even today and how India – once a great empire itself – was devastated by the Company and still struggles with the repercussions. It is beautifully written with countless colorful stories of battles and palace intrigue, transporting the reader to the place and a time long ago.  It is indeed a great read.ke it stand out

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