The Global Week Ahead: November 27- December 4, 2022

This week, we will be watching closely something that is not on the global calendar: Growing protests across China where protestors are shouting, “Down with the Communist Party! Down with Xi Jinping!” These are unprecedented acts of civil disobedience in Communist China and are the result of growing draconian COVID lockdowns.  Markets will be asking: How long will Xi allow the protests in Shanghai, Beijing, and other major cities before instituting tough crack-downs? All this is going on as European Council President Charles Michel visits Beijing to help patch up increasingly rough relations between the EU and China. 

Meanwhile, French President Emmanuel Macron travels to Washington on Wednesday to meet with President Joe Biden. They are expected to discuss not only the state of the war in Ukraine but also growing US-EU tensions on everything from electric vehicle subsidies the US Congress recently approved in the Inflation Reduction Act to EU accusations the US is profiteering off the war.

On the global economic radar screen, markets will look at the US jobs report and the PCE inflation reading. Also, Fed Chair Jay Powell is giving a closely watched speech at the Brooking Institution on Wednesday, the same day the Fed publishes the Beige Book. In Europe, the CPI releases will be the significant focus, along with several speeches by ECB President Christine Lagarde. In Asia, China is expected to release PMIs and Japan has several important economic activity indicators being released. 

Here is what we are watching around the world this week.  Let us know if you have any questions or if you would like to be added anyone to our mailing list:

Sunday, November 27, 2022

Global

·       The First Day of Advent in the Gregorian Christian Calendar marking the start of the western church’s countdown to Christmas.

Americas

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Asia

Political/Social Events –

·       Mongolia’s President Ukhnaagiin Khurelsuh will visit Beijing for meetings on mutual issues of concern.

·       Japan’s and the Philippines’ air forces will conduct unit-to-unit exchanges and training sessions through December 11th.

Economic Reports/Events –

·       China Industrial Profits (October)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing of significance to report.

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Israel Industrial Production (October)

Africa

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Monday, November 28, 2022:

Global

·       The G-7 Justice Ministers will meet in Berlin, Germany. This is the first such meeting of justice ministers and Germany holds the G-7 presidency.

·       The UN Security Council is scheduled to hold a briefing, followed by consultations on the Middle East.

·       The UN Office of Counter-Terrorism will hold a virtual event entitled Safeguarding the Metaverse: Countering Terrorism and Preventing Violent Extremism in Digital Space,  

Americas

Political/Social Events –

·       The US Congress returns to work after taking last week off for Thanksgiving.  They will be working on a number of market-sensitive issues including raising the debt ceiling, passing the defense appropriations bill, and figuring out what to do with the US budget.

·       Argentina celebrates National Sovereignty Day.

·       “Cyber Monday” in the US, offering online retailers to off post-Thanksgiving holiday deals.

Economic Reports/Events –

·       New York Federal Reserve Bank President John Williams speaks at the Economic Club of New York.

·       US Dallas Fed Manufacturing Index (November)

·       Canada Current Account (Q3)

·       Brazil BCB Focus Market Readout, Bank Lending (October)

·       Mexico Balance of Trade (October)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Bank of Japan Deputy Governor Amamiya Masayoshi to speak at the 2022 Autumn Annual Meeting of the Japan Society of Monetary Economics in Kobe, Japan.

·       Australia Retail Sales (October)

·       Hong Kong Balance of Trade/Exports/Imports (October)

Europe

Political/Social Events –

·       Russian President Vladimir Putin meets with Kazakhstan’s President Kassym-Jomart Tokayev in Moscow.  This is part of the Russia-Kazakhstan Interregional Cooperation Forum, which seeks greater economic cooperation between the two countries.  The leaders meet in the face of Kazakhstan, increasingly critical of Russia’s invasion of Ukraine.

·       NATO will hold their Exercise Cyber Coalition 22 (through December 2nd).  It is NATO’s largest training exercise and is aimed at training participants how to defend NATO and critical national networks.

·       The EU Foreign Affairs Council (Development) will meet in Brussels.  This will be a follow-up meeting to discuss the EU-African Union Summit held February 17-18.  They will also discuss Ukraine and Afghanistan.

·       The European Parliament Committee of Inquiry holds hearings tomorrow (November 29) investigating the use of Pegasus and equivalent surveillance spyware in the EU, particularly its use in Spain.

·       Greek Prime Minister Kyriakos Mitsotakis visits the UK for talks with UK Prime Minister Rishi Sunak.

·       UK Prime Minister addresses the Lord Mayor’s Banquet in London.  Traditionally, at this event, the Prime Minister focuses on foreign policy and where he/she sees it going.

·       The EU Education, Youth, Culture and Sport Council meets in Brussels to discuss the European Education Area in times of Russia’s War of aggression against Ukraine and other major issues.

·       EU President Ursula von der Leyen meets with Moussa Faki, Chair of the African Union Commission, and co-chairs with him the 11th Commission-to-Commission meeting between the EU and the African Union.

·       The GMB Scotland union (which serves in the Scottish Ambulance Service) begin a 26-hour strike for more pay.

·       Albania celebrates Independence Day.

Economic Reports/Events –

·       ECB President Christine Lagarde makes a (virtual) statement before the European Parliament’s Committee on Economic and Monetary Affairs in Brussels.  She will brief them on the current economic situation in the Eurozone, particularly with regard to inflation as a global challenge.

·       ECB Board Member Elizabeth McCaul participates in a panel on “How safe and inclusive are crypto payments?” at the Financial Times Live’s Crypto and Digital Assets Summit in London.

·       Eurozone Loans to Households (October), Loans to Companies (October)

·       UK CBI Distributive Trades (November)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Composite Economic Index (October)

·       Saudi Arabia Private Bank Lending (October), M3 Money Supply (October)

Africa

Political/Social Events –

·       The Internet Governance Forum is held in Addis Ababa.  UN Secretary-General António Guterres and Ethiopian Prime Minister Abiy Ahmed will speak.

·       Mauritania celebrates its Independence Day.

Economic Reports/Events –

·       Ghana Interest Rate Decision (expected to be raised 150 bps to 26 percent)  

Tuesday, November 29, 2022:

Global

·       The UN Security Council holds a briefing on the situation in Syria.

·       The UN Peacekeeping Commission meets on the situation in Guinea-Bissau.

·       The UN will host a hybrid launch of the World Meteorological Organization (WMO) State of Global Water Resources report 2021.

·       Financial Times Global Banking Summit begins in London.  Leading global bank CEOs are expected to speak as well as key regulators.

Americas

Political/Social Events –

·       The United States and Russia are expected to begin new START nuclear talks in Egypt through December 6th.

Economic Reports/Events –

·       US Federal Reserve Board Governor Lisa Cook speaks at the Detroit Economic Club on “The Outlook for Monetary Policy and Observations on the Evolving Economy”

·       US Redbook (November), S&P/Case-Shiller Home Price (September), House Price Index (September), CB Consumer Confidence (November), CB Consumer Confidence (November), Dallas Fed Services Revenues Index (November)

·       Canada GDP (October)

·       Brazil PPIs (October)

·       Chile Unemployment Rate (October)

·       Mexico Unemployment Rate (October)

Asia

Political/Social Events –

·       Laos’ President Thongloun Sisoulith makes an official visit to China and meetings with President Xi Jinping.  Laos is one of the least developed countries in Southeast Asia and highly dependent on China for trade – it is estimated 65 percent of its GDP is debt exposure to China.

Economic Reports/Events –

·       Japan Unemployment Figures (October), Retail Sales (October)

·       Singapore Export Prices (October), Import Prices (October), PPIs (October)

·       Vietnam Balance of Trade (November), Industrial Production (November), Inflation Rate (November), Retail Sales (November), Tourist Arrivals (November)

·       Taiwan GDP (Q3)

Europe

Political/Social Events –

·       The foreign ministers of NATO’s North Atlantic Council will meet in Bucharest to discuss the Ukraine War.  They will also discuss how best to implement commitments each of the countries made in their June meetings as well as the progress of gaining full membership of Sweden and Finland into NATO.

·       The EU-Organization of African, Caribbean and Pacific States (OACPS) ministerial meeting is held in Brussels.  They will discuss trade, economic and financial cooperation.

Economic Reports/Events –

·       Bank of England Governor Andrew Bailey gives evidence to the Lords Economic Affairs Committee.

·       ECB Board Member Luis de Guindos offers opening remarks (virtually) at XIII Encuentro Financiero organized by Expansión.

·       ECB Board Member Isabel Schnabel gives the Keynote speech on “Preisdynamik und Zinswende” followed by a discussion at a conference organized by IG Metall in Frankfurt, Germany.

·       Bank of England’s Catherine Mann speaks (virtually) as a panelist at The Conference Board's Navigating the Economic Storm, ‘Policy solutions: fiscal and monetary”

·       Eurozone Economic Sentiment (November), Industrial Sentiment (November), Selling Price Expectations (November), Services Sentiment (November), Consumer Sentiment (November), Consumer Confidence (November), Consumer Inflation Expectations (November)

·       Germany Inflation Rate (November), North Rhine Westphalia CPIs (November), Baden Wuerttemberg CPIs (November), Bavaria CPIs (November), Brandenburg CPIs (November), Hesse CPIs (November), Saxony CPIs (November)

·       Italy Industrial Sales (September), PPIs (October)

·       UK BoE Consumer Credit (October), Mortgage Lending (October), Net Lending to Individuals (October)

·       Spain Inflation Rate (November), CPI (November), Harmonized Inflation Rate (November), GDP Growth (Q3), Business Confidence (November)

·       Switzerland GDP (Q3)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey Economic Confidence Index (November), Balance of Trade/Exports/Imports (October)

·       Iran Inflation Rate (October)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Private Sector Credit (October), M3 Money Supply (October), Unemployment Rate (Q3)

·       Lesotho’s Interest Rate Decision 

Wednesday, November 30, 2022: 

Global

·       The UN Peacekeeping Commission will hold an ambassadorial-level follow-up meeting to Monday’s meeting on the situation in Burundi.

·       the UN’s International Labor Organization (ILO) is expected to release its Global Wage Report for 2022/2023.

Americas

Political/Social Events –

·       French President Emmanuel Macron will visit Washington DC for meetings with President Biden.  They will discuss a full slate of issues ranging from the Ukraine War to China to emerging US-EU trade tension over electric car subsidies.  He will be in Washington through December 1st.

·       The US Senate Banking Committee will hold a nomination hearing for Martin Gruenberg for the role of Chairman of the Federal Deposit Insurance Corporation (FDIC).  This will likely be a heated event as Republican Senators are angry over Gruenberg’s role in ousting the last chair, Jelena McWilliams. The hearing will also give insights into the Biden Administration’s financial regulatory agenda for the next two years.

·       The House of Representatives Democratic Leadership elections are to be held.  Representative Hakeem Jeffries (D-NY) is expected to be elected Minority Leader, replacing Speaker Nancy Pelosi (D-CA) who announced she was stepping back from a leadership role.

·       President Biden hosts the lighting of the National Christmas Tree in Washington, DC.

·       Barbados celebrates Independence Day.

·       Economic Reports/Events –

·       US Federal Reserve Board Chair Jay Powell speaks at the Brookings Institution in Washington DC on the “Economic Outlook, Inflation, and the Labor Market.”

·       US Federal Reserve Board Governor Michelle Bowman speaks (virtually) at the KBW CEO Strategy Forum.

·       US GDP (Q3), Fed Beige Book released, JOLTS Figures (October), ADP Employment Change (November), Goods Trade Balance (October), Retail Inventories Ex-Autos (October), PCE Prices (Q3), Real Consumer Spending (Q3),  Corporate Profits (Q3), MBA Mortgage Indexes (November), Pending Home Sales (October)

·       Brazil Unemployment Rate (October), Nominal Budget Balance (October)

·       Chile Copper Production (October), Industrial Production (October), Manufacturing Production (October), Retail Sales (October)

·       Colombia Unemployment Rate (October)

·       Uruguay Balance of Trade (October)

·       Mexico Fiscal Balance (October)

Asia

Political/Social Events –

·       Ispace – a Japanese space start-up – will have its moon lander launched by a SpaceX Falcon 9 from Cape Canaveral in Japan.   The lander carries small lunar rovers from the UAE and Japan.

Economic Reports/Events –

·       China NBS Manufacturing PMI (November), NBS Non-Manufacturing PMI (November), NBS General PMI (November)

·       India GDP (Q3), Infrastructure Output (October), Government Budget Value (October)

·       Singapore Bank Lending (October)

·       Thailand Interest Rate Decision, Private Consumption (October), Industrial Production (October), Current Account (October), Coincident Report (October), Retail Sales (October)

·       South Korea Construction Output (October), Industrial Production (October), Manufacturing Production (October), Retail Sales (October)

·       Japan Industrial Production (October), Housing Starts (October), Construction Orders (October)

·       Australia Construction Work Done (Q3), Monthly CPI Indicator (October), Building Permits (October), Private House Approvals (October), Private Sector Credit (October), CoreLogic Dwelling Prices (November)

·       Sri Lanka Inflation Rate (November)

Europe

Political/Social Events –

·       The Organization for Security and Cooperation in Europe (OSCE) foreign ministers meet in Lodz, Poland.

·       NATO Secretary General Jens Stoltenberg addresses the Berlin Security Conference.

·       The UK’s Royal Mail staff go on strike through Thursday.

·       St. Andrew’s Day, a public holiday in Scotland.

Economic Reports/Events –

·       ECB’s Non-Monetary Policy Meeting in Frankfurt, Germany.

·       Bank of England’s Huw Pill speaks (virtually) at  Speech at the Institute of Chartered Accountants in England and Wales Economic Summit

·       Eurozone Inflation Rate (November), CPI (November)

·       Germany Unemployment Rate (October), Import Prices (October)

·       France Inflation Rate (November), GDP (Q3), Household Consumption (October), PPIs (October)

·       Italy GDP (Q3), Inflation Rate Figures (November), CPI (November)

·       Spain Retail Sales (October), Current Account (September)

·       Hungary PPIs (October)

·       Switzerland KOF Leading Indicators (November), Economic Sentiment Index (November)

·       Poland GDP (Q3)

·       Russia GDP (October), Unemployment Rate (October), Real Wage Growth (September), Business Confidence (November), Retail Sales (October), M2 Money Supply (October)

·       Ukraine Current Account (October)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey GDP (Q3)

·       Egypt M2 Money Supply (October)

·       Qatar Total Credit Growth (November), M2 Money Supply (November)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Balance of Trade (October)

·       Nigeria FX Reserves (November)

·       Kenya Inflation Rate (November)

·       Mozambique Interest Rate Decision

Thursday, December 1, 2022:

Global

·       India assumes the presidency of the G20.

·       India assumes the presidency of the UN Security Council.

·       Today is the first day of the meteorological winter in the Northern Hemisphere.

Americas

Political/Social Events –

·       Democratic Party leaders begin three days of meetings to figure out the orders of states voting in the 2024 presidential primaries.  The debate is over whether Nevada or New Hampshire will go first and will Michigan or Minnesota will replace Iowa in the order.

Economic Reports/Events –

·       US Federal Reserve Board Vice Chair Michael Barr speaks (virtually) at the American Enterprise Institute on bank capital.

·       US Challenger Job Cuts (November), Personal Income (October), PCE Price Index (October), Initial Jobless Claims (November), Core PCE Price Index (October), S&P Global Manufacturing PMI (November), ISM Manufacturing PMI/Manufacturing Employment PMI/Manufacturing New Orders/Manufacturing Prices (November), Construction Spending (October),

·       Brazil GDP (Q3), S&P Global Manufacturing PMI (November), Balance of Trade (November)

·       Canada Labor Productivity (Q3), S&P Global Manufacturing PMI (November)

·       Mexico Business Confidence (November), S&P Global Manufacturing PMI (November)

·       Colombia Davivienda Manufacturing PMI (November)

·       Chile IMACEC Economic Activity (October)

·       Peru Inflation Rate (November)

Asia

Political/Social Events –

·       The trial of Hong Kong media tycoon Jimmy Lai begins in Hong Kong.  He is charged with conspiring to collude with foreign forces under tough new national security laws imposed by Beijing.

Economic Reports Events –

·       Bank of Japan Governor Haruhiko Kuroda will give a virtual address to the Asian Development Bank Institute as part of the Institute’s Conference entitled 25th Anniversary Celebration: Strategies for Developing Asia’s Future.

·       Bank of Japan Board Member Noguichi Asahi to give remarks at a meeting with local leaders in Akita, Japan.

·       China Caixin Manufacturing PMI (November)

·       India S&P Global Manufacturing PMI (November)

·       South Korea GDP (Q3), Balance of Trade/Exports/Imports (November), S&P Global Manufacturing PMI (November)

·       Japan Capital Spending (Q3), Jibun Bank Manufacturing PMI (November), Consumer Confidence (November)

·       Hong Kong Retail Sales (October)

·       Indonesia S&P Global Manufacturing PMI (November), Inflation Rate (November), Tourist Arrivals (October)

· Australia's Balance of Trade (November), Building Capital Expenditures (Q3), Plant Machinery Capital Expenditures (November), Private Capital Expenditures (Q3), Commodity Prices (November)

·       Taiwan S&P Global Manufacturing PMI (November)

·       Philippines S&P Global Manufacturing PMI (November)

·       Thailand S&P Global Manufacturing PMI (November), Business Confidence (November)

·       Vietnam S&P Global Manufacturing PMI (November)

·       Pakistan Inflation Rate (November), Wholesale Prices (October)

Europe

Political/Social Events –

·       European Council President Charles Michel will travel to Beijing for meetings with Chinese President Xi Jinping.  Michel, representing the leaders of the EU’s 27 members, will discuss the future of the EU-China relationship.  It is the first time Michel has traveled officially to China and comes as increasing tensions over trade and human rights are leading many EU countries to reconsider their relationship with China.

·       The EU Competitiveness Council (Internal Market and Industry) meet in Brussels.  They will discuss cars, household appliances, and electronics and the impact of geostrategic and value chain disruptions.

·       European Commission President Ursula von der Leyen travels to Dublin to help celebrate Ireland’s 50th anniversary of EU membership. Von der Leyen will address a rare joint session of the houses of parliament.

·       Portugal celebrates Independence Day.

·       Romania celebrates Independence Day.

·       London sees the lighting of the Norwegian Christmas Tree in Trafalgar Square.

Economic Reports/Events –

·       ECB General Council Meeting in Frankfurt, Germany.

·       ECB Board Member Andrea Enria offers an introductory statement before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels. 

·       ECB Board Member Philip R. Lane gives the  Keynote speech at the Annual Banque de France / EUI conference in Florence, Italy. 

·       ECB Board Member Frank Elderson at Lustrum Symposium organized by Vereniging voor Financieel Recht in Amsterdam, Sweden.

·       Eurozone S&P Global Manufacturing PMI (November), Unemployment Rate (November)

·       Germany Retail Sales (October), S&P Global Manufacturing PMI (November)

·       France S&P Global Manufacturing PMI (November)

·       UK Nationwide Housing Prices (November), S&P Global/CIPS Manufacturing PMI (November)

·       Switzerland Retail Sales (October), Inflation Rate (October), CPI (November), procure.ch Manufacturing PMI (November)

·       Italy S&P Global Manufacturing PMI (November), Unemployment Rate (October)

·       Hungary Balance of Trade (Q3), GDP (Q3), HALPIM Manufacturing PMI (November)

·       Poland S&P Global Manufacturing PMI (November)

·       Spain S&P Global Manufacturing PMI (November)

·       Russia S&P Global Manufacturing PMI (November), Corporate Profits (September)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey Istanbul Chamber of Industry Manufacturing PMI (November), MPC Meeting Summary

Africa

Political/Social Events –

·       Mozambique’s Supreme Court to deliver ruling in hidden-debt trial.

·       The Central African Republic celebrates Republic Day.

·       Chad celebrates Freedom and Democracy Day.

Economic Reports/Events –

·       Nigeria Stanbic IBTC Bank Nigeria PMI (November)

·       South Africa ABSA Manufacturing PMI (November), total New Vehicle Sales (November)

Friday, December 2, 2022: 

Global

·       Release of the UN’s Food and Agriculture Organization (FAO) Food Price Index (November)

Americas

Political/Social Events –

·       The Northrop Grumman Company and the US Air Force are expected to unveil the new B-21 Raider Stealth Bomber, the most advanced plane in the world.

Economic Reports/Events –

·       US Non-Farm Payrolls (November), Unemployment Rate (November)

·       Canada Unemployment Figures (November)

·       Brazil IPC-FIPE Inflation Figures (November)

·       Mexico FX Reserves (October)

·       Peru Balance of Trade (October), Inflation Rate (November)

·       Argentina Tax Revenue Estimates (December)

Asia

Political/Social Events –

·       The ASEAN+3 Economic Cooperation and Financial Stability Forum is held in Phnom Penh, Cambodia. This year’s agenda will focus on sustainability and regional economic and financial developments with keynote speeches by China’s Finance Minister Liu Kun and Bank of Japan Governor Harukiko Kuroda as well as Ms. Sri Mulyani Indrawati, Finance Minister, Indonesia Ministry of Finance and Arkhom Termpittayapaisith, Finance Minister, Thailand Ministry of Finance.

·       The Bank of Thailand co-hosts a forum with the Bank for International Settlements. Among the expected speakers are Bank of China Governor Yi Gang, ECB President Christine Lagarde, BIS Chief Agustin Carstens, and Singapore Central Bank Chief Ravi Menon. 

·       Laos celebrates National Day.

Economic Reports/Events –

·       India FX Reserves (November), Deposit Growth (November), Bank Loan Growth (November)

·       South Korea Inflation Rate (November), CPI (November)

·       Australia Reserve Bank Governor Lowe Philip Lowe to participate in the Bank of Thailand’s 80th Anniversary Conference in Bangkok, Thailand.

·       Australia Retail Sales (October), Home Loans (October), Investment Lending to Homes (October)

·       Philippines PPI (October)

·       Thailand Consumer Confidence (November), CPI (November), Inflation Figures (November)

·       Singapore Retail Sales (October), SIPMM Manufacturing PMI (November)

·       Pakistan Consumer Confidence (November)

Europe

Political/Social Events –

·       The EU Competitiveness Council (Research and Space) meet in Brussels.  They will discuss research infrastructures and the New European Innovation Agenda.

Economic Reports/Events –

·       ECB President Christine Lagarde participates in a panel session, "Growth and Inflation Dynamics," at Bank of Thailand's 80th Anniversary Conference, "Central banking amidst shifting ground," jointly organized with the Bank for International Settlements in Bangkok, Thailand. 

·       ECB Board Member Luis de Guindos gives the closing speech at an event organized by OK Diario in Madrid, Spain.

·       Eurozone PPIs (October)

·       Germany Exports/Imports/Balance of Trade (October), S&P Global Composite PMI (November)

·       France Industrial Production (October), Budget Balance (October)

·       Spain Unemployment Figures (November), Tourist Arrivals (October)

Middle East

Political/Social Events –

·       The UAE celebrates National Day, a public holiday.

Economic Reports/Events –

·       Nothing significant to report.

Africa:

Political/Social Events –

·       Nigeria’s Supreme Court to hold hearings into oil spills case involving Shell.

Economic Reports/Events –

·       Nothing significant to report.

Saturday, December 3, 2022:

Global

·       Today is the 30th anniversary of the first short message service (SMS) being sent over a mobile phone.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       ECB President Christine Lagarde chairs a roundtable discussion on "The global dimensions of policy normalization" at Bank of Thailand's 80th Anniversary Conference "Central banking amidst shifting ground" jointly organized with the Bank for International Settlements in Bangkok, Thailand. 

·       France S&P Global Services PMI (November)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, December 4, 2022:

Global

·       The 33rd OPEC+ Ministerial Meeting is to be held in Vienna, Austria.

·       Today is “National Francis Day,”  celebrating all of us named Francis.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Recommended Weekend Reads: November 25-27, 2022

We wanted to share a few of the research pieces and notable news stories that caught our eye in the past week. We hope you find it interesting and useful.

“Ukraine’s 15,000-Mile Lifeline” New York Times Magazine

Ukraliznystsia, Ukraine’s national rail system, has been referred to as “a country within a country.”  It employes more than 230,00 employees and, since Russia invaded, it has helped the country withstand the Russian attack and successfully fight back.

“Tracking the State of US-Europe Relations” Morning Consult

The trans-Atlantic economic relationship is the largest in the world in terms of transaction value, and among the most complex. Understanding this relationship is key to predicting the trajectory of trade and capital flows, regulation, technological cooperation, and economic statecraft.  The polling numbers are not great.

Source: Morning Consult

“Reunification” with Taiwan through Force Would Be a Pyrrhic Victory for China” by Jude Blanchette, Freeman Chair in China Studies, and Gerard DiPippo, Senior Fellow, Economics Program, Center for Strategic & International Studies

Many commentators and officials speculate about Beijing’s plans to compel “reunification” with Taiwan. Much of the existing commentary focuses on how or when a Chinese attack on Taiwan could occur, but there is little discussion of the nonmilitary consequences of such a scenario for China and the world. This brief explores the implications of a Chinese attack on Taiwan based on reasonable, albeit speculative, assumptions.  When considered more holistically, the implications of an attack on Taiwan would be grim for Beijing.

Chart of the Week: Breaking Down the US Right Track/Wrong Track Polls By Political Affiliation

Morning Consult polled more than 6,000 adults on their perception of the US is on the right track or the wrong track.  What we found particularly interesting about this latest poll was the huge disparity of views of participants by political party:

·       54 percent of Democrats think the US is on the right track

·       23 percent of Independents think the US is on the right track

·       9 percent of Republicans think the country is heading in the right direction.

Source: Morning Consult

A Great Time in Atlanta

I was tremendously privileged to speak this past week in Atlanta at the Advantax National Conference. Thank you, Advantax, for having me - a beautiful venue and a tremendous audience of 1,100 of some of the smartest financial advisors in the business. We covered a lot in our hour together: Russia’s war on Ukraine, China and the future of Indo-Asian security, the implications of the US elections, tax policy now and in the next few years, and the coming “Rise of the Regulators” in the final two years of President Biden’s first term in office. Thank you again, Advantax, for a great and very fun time!

The Global Week Ahead: November 20 - 27, 2022

Looking at the geopolitical calendar this week, it will be relatively quiet (it should be after all those international summits last week).  We are watching two significant actions this week: The G7 states are expected to announce a ceiling price on purchases of Russian oil for their price cap mechanism that begins on December 5th.   While governments and markets have been anticipating this for several months, it may significantly impact Russia's economy and its ability to fund the War on Ukraine.  Also, this week the European Parliament is likely to pass a resolution naming Russia as a state sponsor of terrorism. 

The global economic reporting calendar is relatively quiet this week, in part because the US will quickly slide into an extended Thanksgiving holiday.  But we will be watching the Federal Open Market Committee minutes which will be released on Wednesday, and South Korea, South Africa, and Turkey will decide interest rates.  Turkey is likely to be an outlier among the world's central banks as it is expected to cut rates by 15 basis points.   And the OECD will be providing an update on their global economic outlook forecasts on Tuesday.

Here is what we are watching around the world this week:

Sunday, November 20, 2022

Global

·       The World Cup begins in Doha, Qatar, and runs through December 18. 

Americas

Political/Social Events – 

·       The Inter-American Development Bank is expected to choose a new president.  The previous president, Mauricio Claver-Carone, was fired in September for having an inappropriate relationship with a subordinate and rewarding her with large pay raises.

·       US President Biden celebrates his 80th birthday.

Economic Reports/Events – 

·       Nothing significant to report.

Asia

Political/Social Events – 

·       Kazakhstan holds snap presidential elections (two years earlier than expected).

·       Nepal holds national and provincial elections. It is the fourth election ever held since the abolition of the monarchy. But political instability has led to 13 different governments in the past 16 years.

Economic Reports/Events – 

·       Nothing significant to report.

Europe

Political/Social Events – 

·       London’s “Big Ben” will ring its bells for the first since 2017. 

·       It will ring once at 11 a.m. to mark a two-minute moment of silence for those lost in World War I&II.  

Economic Reports/Events – 

·       ECB President Christine Lagarde participates in a formal dinner of the European Round Table for Industry in Paris.

Middle East

Political/Social Events – 

·       Nothing significant to report.

Economic Reports/Events – 

·       Nothing significant to report.

Africa

Political/Social Events – 

·       Equatorial Guinea holds presidential, legislative, and local elections. 

·       The leaders of Francophone African countries will gather for the Francophonie Summit in Djerba, Tunisia.  French President Emmanuel Macron will attend.

Economic Reports/Events – 

·       Nothing significant to report.

Monday, November 21, 2022:

Global

·       The UN Security Council is scheduled to hold a briefing on the Islamic State in Iraq and the Levant (Da’esh), Al-Qaida, and associated individuals, groups, undertakings, and entities.

·       The Food and Agriculture Organization of the United Nations (FAO) is expected to release its Near East and North Africa - Regional Overview of Food Security and Nutrition report.

Americas

Political/Social Events –

·       US Vice President Kamala Harris arrives in the Philippines.  She will meet with President Ferdinand Marcos, Jr. in Manila.  And then tomorrow, travel to the Province of the Palawan Island to be briefed on the disputed South China Sea, where China has reclaimed and militarized islands to assert territorial control over the area.  Harris had a brief impromptu sideline meeting with Chinese President Xi Jinping in Cambodia this past week during the ASEAN Summit.  Her visit to Palawan could raise tensions further with China as she is the highest-ranking US official to tour the island and its close proximity to the disputed Spratly Islands.

·       President Biden hosts the traditional pardoning of the Thanksgiving Turkey at the White House.

·       The US Congress is out of session this week for the Thanksgiving holiday.

·       Chile’s trucking union to go on strike in the northern portion of the country over increasing security concerns.  Chile has seen a significant uptick in cargo theft and assaults on drivers.

Economic Reports/Events –

·       Federal Reserve Bank of San Francisco President Mary Daly gives the keynote speech at the Orange County Business Council.

·       US Chicago Fed National Activity Report (October)

·       Brazil BCB Focus Market Readout

Asia

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       China Loan Prime Rate (1Y), Loan Prime Rate (November)

·       Thailand GDP (Q3)

·       Taiwan Export Orders (October), Current Account (Q3), Inflation Rate (October)

·       Hong Kong Inflation Rate (October)

Europe

Political/Social Events –

·       The Italian government is set to approve a draft budget law for 2023, the first for new Prime Minister Giorgia Meloni

·       The EU Agriculture and Fisheries Council meet in Brussels.

·       EU President Ursala von der Leyen meets with Roberta Metsola, President of the European Parliament, to discuss ongoing issues.  She then meets with Mr. Manfred Weber, Ms. Iratxe García-Pérez, and Mr. Stéphane Séjourné, Chairs of the European People’s Party Group, the Progressive Alliance of Socialists and Democrats and the Renew Europe Groups in the European Parliament

·       German Chancellor Olaf Scholz gives a speech on the state of Germany’s economy at the Sueddeutsche Zeitung Economic Summit in Berlin.

·       Berlin’s famous Weihnachtsmärkte (Christmas Markets) open across the city.

·       The UK’s CBI (Confederation of British Industry) Annual Conference begins in Birmingham.

Economic Reports/Events –

·       ECB Board Member Edouard Fernandez-Bollo gives remarks at a conference "La proposition de directive bancaire CRDVI et les relations Afrique – Europe" organized by A. Gauvin & Raji Avocats in Paris.

·       Germany PPIs (October)

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Israel Unemployment Figures (October)

·       Turkey Central Government Debt (October)

Africa

Political/Social Events –

·      Kenya hosts the Democratic Republic of Congo Peace Talks in Nairobi.

Economic Reports/Events –

·       The International Monetary Fund (IMF) is expected to announce Malawi to be the first low-income country to receive funding through its food-shock window.

Tuesday, November 22, 2022:

Global

·       The OECD releases its Economic Outlook.

·       The UN Security Council meets to discuss piracy in the Gulf of Guinea. The Gulf has become the leading region for global kidnappings at sea, accounting for 90 percent of the world total.

Americas

Political/Social Events –

·       US Vice President Kamala Harris to visit the Philippines’ Palawan Province to discuss maritime operations in the South China Sea.

Economic Reports/Events –

·       Federal Reserve Bank of Cleveland Loretta Mester gives opening remarks at the Bank’s “Wages and Inflation” Conference.

·       US Redbook (November), Richmond Fed Services Index (November), Richmond Fed Manufacturing Index (November)

·       Canadian Central Bank Senior Deputy Governor Carolyn Rogers does a fireside chat at the Young Canadians in Finance Conference in Ottawa.  She will give an assessment of the risks to the stability of the Canadian financial system.
Ottawa, Ontario

·       Canada Retail Sales (September), Wholesale Sales (September), New Housing Price Index (October)

·       Mexico Retail Sales (September)

·       Costa Rica Balance of Trade (October)

·       Peru GDP(Q3)

·       Argentina Balance of Trade (October)

Asia

Political/Social Events –

·       The ASEAN Defense Ministers meet in Siem Reap, Cambodia. US Defense Secretary Lloyd Austin, along with his counterparts from Japan and China, have also been invited to attend. 

Economic Reports/Events –

·       South Korea Consumer Confidence (November)

·       Australia Central Bank Governor Lowe speech.

·       Taiwan Unemployment Rate (October)

·       Indonesia Loan Growth (October)

Europe

Political/Social Events –

·       The EU General Affairs Council (Cohesion) meets.

·       Russian President Vladimir Putin will meet with Cuban President Miguel Diaz-Canel in Moscow.  While there, both leaders will participate in the unveiling of a statue honoring late Cuban revolutionary dictator Fidel Castro. 

·       King Charles III hosts South African President Cyril Ramaphosa for a state visit.

Economic Reports/Events –

·       UK Public Sector Net Borrowing (October)

·       Eurozone Current Account (September), Consumer Confidence Flash (November)

·       Poland Employment Growth (October), PPIs (October), Corporate Sector Wages (October)

·       Italy Current Account (September)

·       Ukraine Retail Sales (October)

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Turkey Consumer Confidence (November)

·       Qatar Total Credit Growth (October), Money Supply (October)

·       Israel Inflation Expectations (October)

Africa

Political/Social Events –

·       Multiple South African Unions representing more than one million workers – including the civil servants union – will go on strike over wages.

Economic Reports/Events –

·       South Africa Leading Business Cycle Indicator (September)

·       Nigeria Interest Rate Decision

Wednesday, November 23, 2022: 

Global

·       The G7 states are expected to announce a ceiling price on purchases of Russian oil for their price cap mechanism that begins on December 5th.  Here is a brief explanation of how the cap will likely work.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       US FMOC Minutes released, MBA Mortgage Data (30-year rate, mortgage refinancing’s, purchase index), Building Permits (October), Durable Goods Orders (October), Initial Jobless Claims, S&P Global Manufacturing/Composite/Services PMI reports (November), New Home Sales (October), Michigan Consumer Sentiment & Expectations (November)

·       Bank of Canada Governor Tiff Macklem and Senior Deputy Governor Carolyn Rogers appear before the House of Commons Standing Committee on Finance in Ottawa.

·       Argentina Economic Activity (September)

·       Panama IMAE Economic Activity (September)

Asia

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       South Korea Business Confidence (November)

·       Australia S&P Global Manufacturing/Services/Composite PMIs (November)

·       Indonesia M2 Supply (October)

·       Philippines Budget Balance (October)

·       Thailand Imports/Exports/Balance of Trade (October)

·       Singapore GDP (Q3), CPI (October)

·       Taiwan Industrial Production (October), Retail Sales (October)

·       New Zealand monetary policy announcement.

Europe

Political/Social Events –

·       The European Parliament will likely vote today on resolutions naming Russia a state sponsor of terrorism.

·       The European Parliament is expected to approve a new strategy for enlarging the bloc.  This is likely to lead to the EU formally considering Ukraine, Moldova, and Georgia becoming members of the EU.

·       The UK’s Supreme Court is expected to issue a ruling on whether the Scottish Parliament has the power to pass a referendum bill without the British Parliament’s approval. The Scottish Parliament is attempting to legislate approval of a second referendum on Scottish independence.  

·       Armenia will host the heads of state summit of the Collective Security Treaty Organization (CSTO).   Russian President Vladimir Putin is expected to attend, where discussions around international and regional security will be held.   Putin has been attempting to negotiate a peace agreement between Armenia and Azerbaijan and he may attempt to advance negotiations with sideline talks with the leaders of the two countries.

·       The EU’s European Economic Area Council meets to discuss mutual economic issues.

Economic Reports/Events –

·       ECB Board Member Luis de  Guindos gives the opening speech at the XXIX Encuentro del Sector Financiero "Retos y oportunidades de un sector en transformación" organized by Deloitte in Madrid, Spain. 

·       ECB Board Member Edouard Fernandez-Bollo participates on a panel "El rol del consejo en la transformación" at XXIX Encuentro del Sector Financiero "Retos y oportunidades de un sector en transformación" organised by Deloitte in Madrid, Spain. 

·       Germany S&P Global Manufacturing/Composite/Services PMI reports (November)

·       France S&P Global Manufacturing/Composite/Services PMI reports (November)

·       Eurozone S&P Global Manufacturing/Composite/Services PMI reports (November)

·       UK S&P/CIPS Global Manufacturing/Composite/Services PMI reports (November)

·       Poland Retail Sales (October)

·       Russia PPIs (October)

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Lebanon Inflation Rate (October)

Africa

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       South Africa Inflation Rate (October)

·       Zambia Interest Rate Decision (October)

·       Nigeria Interest Rate Decision (October)

Thursday, November 24, 2022:

Global

·       Nothing of significance to report.

Americas

Political/Social Events –

·       The US celebrates Thanksgiving, a national holiday.

Economic Reports/Events –

·       Canada Average Weekly Earnings (September)

·       Brazil FGV Consumer Confidence (November), IPCA Mid-Month CPI (November), Federal Tax Revenues (October)

·       Chile PPIs (October)

·       Mexico Monetary Policy Meeting Minutes, Mid-Month Inflation (November)

·       Argentina Consumer Confidence (November), Interest Rate Decision (November), Leading Indicators (October)

Asia

Political/Social Events –

·       Bangladesh will host the Indian Ocean Rim Association Council of Ministers.  Russian Foreign Minister Sergey Lavrov has been invited to attend and while there is expected to hold bilateral meetings with Bangladesh Prime Minister Sheikh Hasina.

Economic Reports/Events –

·       Japan Jibun Bank Manufacturing & Services & Composite PPIs (October), Coindicant Index (September)

·       Taiwan M2 Money Supply (October)

·       South Korea Central Bank Interest Rate Decision, PPIs (October)

·       Singapore Current Account (Q3)

Europe

Political/Social Events –

·       The EU Parliament is expected to approve an €18 billion loan to Ukraine for 2023.  Additionally, they are expected to pass a measure confirming that EU member states will not accept passports by Russia in illegally-occupied areas of Georgia and Ukraine.

·       The EU Extraordinary Transport, Telecommunications, and Energy Council meet to seek a political agreement on better coordination of gas purchases, exchange of gas across borders, and reliable price benchmarks.  They are also expected to seek political agreement on regulations laying out a temporary framework to accelerate the deployment of renewable energy.

Economic Reports/Events –

·       ECB Board Member Isabel Schnabel gives the keynote speech at the Bank of England Watchers’ Conference in London, England.

·       ECB Board Member Andrea Enria gives a presentation of the 40th Board of Directors meeting of the European Savings and Retail Banking Group (ESRB) and the 19th ESBG General Assembly in Frankfurt, Germany.

·       ECB Board Member Luis de Guindos gives a speech at the Analysis Forum in Milan, Italy.

·       Germany Ifo Business Climate (November), IFO Current Conditions (November), Ifo Expectations (November)

·       France Business Confidence (November)

·       UK CBI Industrial Trends Orders (November)

Middle East

Political/Social Events –

·       The Gulf Cooperation Council (GCC) will meet with senior Indian officials to discuss a free trade agreement.  The GCC is composed of six countries: Saudi Arabia, the UAE, Kuwait, Oman, and Bahrain. India and the UAE already have a bilateral free trade pact signed in May.  Overall, India’s exports to the GCC increased by 58 percent in 2021-2022.

·       Lebanon’s National Assembly will meet again to try to elect a president. It will be the seventh time the Assembly has sought to agree on a president.  The Assembly is evenly split between Christians and Muslims, and whoever is chosen must get 2/3 of the vote. The Iranian-backed armed group, Hezbollah, is a major force in Lebanon’s politics, and they want a president who will allow them to further consolidate power in the country.

Economic Reports/Events –

·       Bahrain Inflation Report (October)

·       Kuwait Inflation Report (October)

·       Saudi Arabia Balance of Trade (September)

·       Turkey Central Bank Interest Rate Decision, Overnight Lending (November), FX Reserves (November),  Business Confidence (November), Capacity Utilization (November), Business Confidence (November),

Africa

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

South Africa Business Confidence (Q4), Interest Rate Decision, PPIs (October)

Ghana 2023 Budget

Zambia Inflation (November), Balance of Trade (October)

Kenya Central Bank Interest Rate Press Briefing

Nigeria GDP Growth Rate (Q3)

Friday, November 25, 2022:

Global

·       Nothing of significance to report.

Americas

Political/Social Events –

·       Mexico’s President Andrés Manuel López Obrador (AMLO) hosts the Pacific Alliance Leaders’ Summit which will include  the Presidents of Chile, Argentina, Ecuador, Peru, and Columbia.  The leaders are expected to discuss how to promote greater economic integration and possible free trade agreements. Additionally, AMLO intends to discuss how the attending nations can expert more power at the Organization of American States (OAS) which AMLO believes is subordinated to US interests.  No representatives from the US or Canada have been invited.  Additionally, the leaders are expected to discuss inviting Costa Rica as a member.

·       “Black Friday” sales in the US, one of the biggest sales days in the US for retailers who offer special sales to “stay in the black” for the year.

Economic Reports/Events –

·       Canada CFIB Business Barometer (November)

Asia

Political/Social Events –

·       A Hong Kong court will hand down a verdict over whether Roman Catholic Cardinal Joseph Zen and five other pro-democracy figures failed to register a legal fund with the police.  Their arrests set off worldwide condemnation.  The normal penalty for first-time offenders is HK $10,000.

Economic Reports/Events –

·       India FX Reserves (November)

·       Japan CPIs (November)

·       Singapore GDP (Q3), Industrial Production (October)

·       Taiwan Consumer Confidence (November), GDP (Q3)

·       Pakistan Central Bank Interest Rate Decision

·       Vietnam FDI report (November)

Europe

Political/Social Events –

·       The EU Foreign Affairs Council meets to discuss development issues, specifically to follow up on the EU-African Union Summit (which took place in February 2022), and the EU response to the crisis in Ukraine and Afghanistan.

·       The EU Extraordinary Justice and Home Affairs Council meets to discuss all migratory routes and issues.

Economic Reports/Events –

·       ECB Board Member Kerstin af Jochnick gives the keynote speech at the European Society for Banking and Financial Law Italy annual conference in Milan, Italy.

·       ECB Board Member Luis de Guindos attends a presentation of the new book “"Política económica de la Segunda República. España en la Gran Depresión internacional" by Luis Peral Guerra in Madrid, Spain.

·       Germany GfK Consumer Confidence (December), GDP Growth (Q3)

·       UK CBI Distributive Trades (November)

·       Switzerland Non-Farm Payrolls (Q3)

·       France Consumer Confidence (November), Unemployment Benefit Claims (October)

·       Hungary Unemployment Figures (October)

·       Spain PPIs (October)

·       Italy Business Confidence (November)

·       Poland Unemployment Rate (October)

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Turkey Financial Stability Report

·       Qatar Balance of Trade (October)

Africa:

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Zimbabwe Inflation Rate (November)

·       Angola Interest Rate Decision

·       Eswatini Interest Rate Decision

Saturday, November 26, 2022:

Global

·       Nothing of significance to report.

Americas

Political/Social Events –

·       Early voting begins in Georgia for the Senate run-off election being held on December 5th.

Economic Reports/Events –

·       Nothing of significance to report.

Asia

Political/Social Events –

·       Taiwan is set to hold elections for local positions ranging from mayors to village chiefs.  The opposition Kuomintang (KMT) Party – which seeks better relations with Beijing – appears to be running strong in pre-election polls.  Of particular note, the great-grandson of former Taiwan leader Ching Kai-shek and who is a member of the KMT, appears poised to win the Mayoral election in Taipei. 

·       Japan’s Imperial Palace grounds in Tokyo will open to the public for the first time in three years to view the autumn foliage season.

Economic Reports/Events –

·       Nothing of significance to report.

Europe

Political/Social Events –

·       UK’s national rail union (Aslef) goes on strike over wages.  The strike will impact 12 companies.

Economic Reports/Events –

·       Nothing of significance to report.

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Africa

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Sunday, November 27, 2022:

Global

·       The First Day of Advent in the Gregorian Christian Calendar marking the start of the western church’s countdown to Christmas.

Americas

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Asia

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       China Industrial Profits (October)

Europe

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Middle East

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Israel Industrial Production (October)

Africa

Political/Social Events –

·       Nothing of significance to report.

Economic Reports/Events –

·       Nothing of significance to report.

Recommended Weekend Reads: November 18 - 20, 2022

We wanted to share a few of the research pieces and notable news stories that caught our eye in the past week. We hope you find it interesting and useful.

·  "CCP: Who makes up the party" The Lowy Institute

Demography is destiny, as is said – and the numbers in China make for a compelling story. In a series of charts and graphs, the Lowy Institute shows who makes up today's Chinese Communist Party and its senior ranks. The short version: It is overwhelmingly male and well over 60 years old.

·  "Interpreting Chinese Economic Policy: Another Brief Guide"  by Derek Scissors/American Enterprise Institute

Chinese economic policy is seen as increasingly important, including to global investors. But transparency has not risen in tandem, and policy is frequently misinterpreted. Here is a guide to understanding China's economic and monetary policy more clearly.

·  "Global Economic Turmoil Calls for a Modernized Global Financial Architecture to Address Needs of the Most Vulnerable Countries"  by David McNair, Executive Director at ONE.org and nonresident scholar at the Carnegie Endowment for International Peace

·       The author argues that, unfortunately, those Western governments with decision-making power and resources to help vulnerable countries respond to the polycrisis are not inclined to use it, given domestic cost-of-living crises in G7 nations, the ongoing conflict in Ukraine, and limited domestic political appetite for international initiatives.

·  “Russia’s Defense Industry Growing Increasingly Turbulent” Jamestown Foundation

Moscow has actively tried to restore at least part of its arms lost in Ukraine after almost nine months of its bloody war. The Russian national defense budget has skyrocketed. However, the true reality of the current state of affairs appears to be rather complicated for the Kremlin. Even the trillions of additional rubles will make its defense industry less productive and efficient in the short term due to a number of critical difficulties.

·  “Putin’s Fear of Retreat – How the Cuban Missile Crisis Haunts the Kremlin"  Foreign Affairs

History matters and Russian President Vladimir Putin knows it. Putin has closely studied the detailed events of the Cuban Missile Crisis. He understands that then-Soviet leader Nikita Khrushchev was the one who backed down -- not President Kennedy – leading to Khrushchev's removal from office less than two years later. Putin recently spoke of the Cuban Crisis and is clearly desperate to avoid a similar fate.

Chart of the Week: We Reached 8 Billion People Last Week… But Population Growth is Starting to Slow, and India Will Surpass China: 

According to estimates from the United Nations, the world's population surpassed 8 billion people this past week. While populations in sub-Saharan Africa are expected to continue growing substantially over the next 30 years, the annual global population growth rate is now at its slowest pace since 1950 – and moving into negative rates in many advanced economies. Additionally, India will become the most populous country in 2023, overtaking China. By 2050, India's population will be 1.7 billion to China's 1.3 billion.

Europe Is All Gassed Up

The EU has done an extraordinary job of offsetting the loss of Russian oil and gas due to Russia’s aggression in Ukraine. The early predictions were, quite frankly, dire. Germany seemed the most at risk. News “analysis” of how Berlin was moving toward encouraging citizens to take cold showers and turn the thermostats way down throughout the winter months lit up in the media.

But the EU aggressively tapped into old and new global LNG markets to make up for what Russia could no longer supply. By way of example, we would point to Mozambique exporting LNG to the EU for the first time - an economic win for Mozambique, one of the world’s poorest countries which also possesses Africa’s largest offshore gas fields.

Add to this unusually mild weather in the EU in October and November (so far), and we have to believe they will make it through the winter without having to implement draconian measures. We still have months of winter to go, but the outlook is, for now, we believe quite positive. We will continue to keep our eye on the state of the EU gas storage stats, but one has to believe this is not what Russian President Vladimir Putin had hoped for at this point.

European Union Natural Gas Storage as of November 18, 2022. (Source: Bloomberg LLP)

8 Billion of Us on Planet Earth…

According to the United Nations, the world’s population surpassed 8 billion this past Tuesday.  While populations in sub-Saharan Africa are expected to continue growing substantially over the next 30 years, the annual global population growth rate is now at its slowest rate since 1950 – and moving into negative rates in many advanced economies.  

One of the more interesting trends in global demographics is not getting much attention: India will become the most populous country in 2023, overtaking China.  By 2050, it is estimated India's population will be 1.7 billion while China's population will shrink to 1.3 billion from its current 1.412 billion. In our view, the vaunted “China Century” is likely actually to be “the India Century.”

A Magical View of Atlanta

Took this photo from my window a few minutes after taking off from Atlanta. Magical!

Update: An Inflection Point in the Ukraine War After a Russian Missile Hits Poland?

It turns out the Polish Government's initial assessment was incorrect. Partially incorrect. The missile, which hit the town of Przewodow in Eastern Poland and killed two civilians, was not fired by Russian Forces from Russia. But it was a Russian missile that Ukrainian Air Defense Forces apparently fired as part of their defensive actions against the more than 100 missiles Russian Forces fired at civilian targets in cities across western Ukraine yesterday. It was the most missiles fired by Russian Forces to date into Ukraine since the war started, but we would quickly note Ukrainian Air Defense Forces destroyed 77 of the Russian missiles and 11 Russian “Kamakazie” drones (which are mostly supplied by Iran).

As more details emerge about how exactly such a tragic misfiring could have occurred, we continue to believe, as we wrote yesterday, the tragic event last night will spur Western governments and NATO to reassess and ultimately upgrade the anti-missile and anti-drone missile systems as well as re-opening the debate over sending tanks and fighter planes to Ukraine.

The point we have heard today among US government sources is that Ukrainian Forces are forced to use Russian missiles, which they are not well-trained to operate and are, more often than not, recently captured from Russian Forces on the battlefield, as a means to defend themselves. As one Washington source told us this morning, "desperate times require desperate measures, which means tragic circumstances can result, as we saw in Poland yesterday. The US needs to re-think what we are sending Ukraine and how to speed up their delivery."

This point was reinforced this afternoon by US Secretary of Defense Lloyd Austin and Chair of the Joint Chiefs of Staff, General Mark Milley,  when they briefed the press on the situation in Poland.   Milley spoke of the need for an “integrated air and missile defense system for Ukraine.” Achieving what Milley called for would clearly require supplying more advanced weaponry to Ukraine.

But what more can NATO send? Quality and quantity are the challenges. In terms of quantity, stockpiles of many main-stay anti-missile/anti-drone weapons are dangerously low in the US. This includes Stingers and NASAMS, which we wrote about yesterday. And while quantity is a growing challenge, so is the ability to link all these Western systems together so they can communicate and more effectively respond to Russian attacks.

In terms of quality, a good example is Patriot Missiles, considered the best air defense system out there but which the US does not provide to Ukraine. Why not? The US Defense Department has said doing so would require US forces to enter Ukraine to operate them because they are so incredibly sophisticated to operate with state-of-the-art radar and command centers. For a US soldier to become proficient in maintaining a Patriot system, they must undergo a minimum of 53 weeks of training.

Nevertheless, once Poland and NATO conclude their investigation of the missile strike, we anticipate Ukraine ramping up its bids to get more advanced weaponry. And this means the thin line NATO is walking with Russia to avoid the war expanding further will become harder to walk.

A Patriot Missile Long-Range Air-Defense System (Source: www.army-technology.com)

A New Inflection Point in the Ukraine War After a Russian Missile Hits Poland?

The news this afternoon that a Russian missile struck a small town in the Hrubieszów district near the town of Przewodow, Eastern Poland, suggests we may be reaching a new inflection point in the war.

While we are awaiting confirmation that it was a Russian, US intelligence officials are anonymously confirming it was, in fact, a Russian missile. Polish media is reporting at least two Polish civilians are dead. Prime Minister Mateusz Morawiecki convened a meeting of his Council of Ministers for National Security and Defense Affairs.

Undoubtedly, phone lines between NATO members are burning up tonight as Poland considers invoking Article 4, which would require formal consultations with other NATO members, or invoking Article 5, which would call for the collective defense of NATO following an attack on one member - effectively, a clarion call to respond militarily to a Russian attack.

We would note the missile struck roughly the same time Russia launched its biggest missile attacks on Ukrainian cities in months, plunging much of Ukraine into darkness. The attacks on Ukrainian electrical facilities were so severe that they caused massive power outages in neighboring Moldovia.

As of a month ago, Russia had successfully destroyed or seriously degraded Ukraine’s power grid by as much as 50 percent. We have to believe the massive wave of missile attacks today and over the past two weeks have substantially increased that percentage.

Source: Financial Times; Fulcrum Macro Advisors LLC

While NATO leadership called for restraint until “all the facts are known,” we believe this may trigger a significant inflection point in the Ukrainian War. While we would be surprised to see NATO go to war over this incident, it may push NATO to drop its resistance to supplying Ukraine with higher-quality and longer-range missile systems, tanks, and possibly fighter/bomber aircraft.

In the next few weeks, Ukraine is expected to receive advanced anti-missile systems from NATO known as NASAMS (Norwegian Advanced Surface-to-Air Missile System). But after today’s attack, Western leaders may think this is not enough to protect NATO members along the border of Russia and Ukraine.

NASAM Air Defense Systems are the latest advanced weaponry arriving in Ukraine to defend against Russian missile attacks. They are expected to arrive in the next week. (source: TheDrive.com)

At the very least, we will likely see NATO forces bulked up on the Polish-Ukraine and Polish-Russian borders. This is a fast-moving event; we will hear much more about potential outcomes in the next 24-48 hours.