Recommended Weekend Reads

February 10 - 12, 2023

We thought you might find the following useful reading. Let us know your thoughts and if you or a colleague want to be added to our distribution list. Have a great weekend.

·       “How well is the G7 oil price cap working?” Institute of International FinanceThe G7 oil price cap began on December 5th. As this paper from the IIF points out, there were real shocks on and around December 5th as Russia was forced to sell their oil further afield in more concealed ways. But since then, there remain many variables – Russian shipping costs, enforced compliance on various nations facilitating Russian oil sales, etc. – which make it hard to figure out just how impactful the cap is working. And now, with Russia announcing its intention to cut oil production by 5 percent this past week, the cap may face a more challenging time being effective.

·       “A World Divided: Russia, China and the West” Bennett Institute for Public Policy, Cambridge University

Canvassing 137 countries, Cambridge researchers found Russia’s invasion of Ukraine has significantly bolstered a sense of greater allegiance to both the US and NATO. Of note, positive attitudes toward Russia in many countries that previously had positive views have plummeted:

-      Greece has gone from 69 percent positive attitudes toward Russia to 30 percent.

-      Hungary has gone from 45 percent to 25 percent favorable.

-      Italy has gone from 38 percent to 14 percent favorable. 

·       “International Security and Estonia 2023” Estonian Foreign Intelligence Service

Estonia, which borders Russia and is one of the most threatened nations by Russia’s aggressive behavior, published its annual foreign intelligence assessment and risk of a Russian attack. Two interesting conclusions: 1) They do not see must the Putin regime falling anytime soon and, if anything, it becoming a more potent and more dangerous dictatorship, and; 2) Russian intelligence has ramped up its efforts to use the Orthodox Church as a cover for intelligence operations inside Russia and externally. 

Charts of the Week

Two very different charts stood out for us this week:

1.     The Explosive Growth of Avian Flu Globally

Following up on our Chart of the Week last week detailing the massive spike of illegal egg smuggling across the US-Mexico border, this chart illustrates how brutal Avian Flu has been on the poultry industry globally. According to the World Organization for Animal Health, last season, more than 31 million birds either died from the Flu or were culled because of exposure. This season (which began last October), the number of birds killed or culled is more than 100 million and growing as the Flu spreads globally. The risk of Avian Flu is not just to birds, with recent confirmed cases of it appearing in farm mammals – which has led the World Health Organization (WHO) to worry it will jump to humans at some point.

2.     Babysitting Fees in the US have Spiked in the Last Two Years

Getting a babysitter has become much more expensive in the last two years.  National average rates rose 21 percent over the previous two years (11 percent in 2021 and another 9.7 percent in 2022.).  San Francisco wins the prize for the most expensive city nationally.  And interestingly, babysitting rates in New York went down over the last year (courtesy Axios and the UrbanSitter)

Newest Additions to the Fulcrum Macro Team…

I wanted to take a moment and congratulate our beautiful German Sheppard, Quinn, for her spectacular birth of six strong, adorable puppies this week. Hearing their little squeaks and sleepy sighs is the greatest mental therapy a person can hope for! Three are set to head off to their “forever homes” - loving, very excited families — in three or four months. If you are looking for a pup, all pure-bred German Sheppards, let me know, or contact my wife, Maura, via her website: www.opendoorfarm.farm

Quinn with her little brood of hungry puppies!

I guess this is what they mean when someone says “dog pile!” Puppy snuggle-time.

The Global Week Ahead

February 5 - 12, 2023

China and its spy balloons are going to dominate the geopolitical agenda this week, particularly in Washington.  The US Congress was already scheduled to discuss and debate various hot-button China-focused issues this week, including a growing push to ban TikTok in the US.  The coming week will undoubtedly see a heavy focus on China’s spy balloon shot down by the US Air Force on Saturday and the implications for the future of US-China relations and global markets.  All this comes as President Biden gives his second State of the Union in front of the US Congress Tuesday.

Also this week, the European Union will likely come to an agreement on a unified response to the green energy incentives granted by Congress last year via the Inflation Reduction Act.  This will come after the German Economic Minister and French Finance Minister travel to Washington for extraordinary meetings to defuse tensions over the issue.

On the global financial and economic front, following rate hikes by the US Fed, the European Central Bank, and the Bank of England, markets will be listening closely as the heads of all three central banks participate in high-profile question-and-answer events.  Markets will also be watching unemployment figures later this week in the US. 

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

Sunday, February 5, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Ecuador will hold local elections and vote on eight constitutional reforms being championed by President Guillermo Lasso.  These include judicial and political reforms.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       India holds the first G20 energy transition working group in New Delhi.

·       China will officially reopen its border to international travelers.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       The EU ban on Russian oil product imports enters into force alongside the G7 price cap which is expected to be set at $100 per barrel.

·       San Marino celebrates Liberation Day, a public holiday.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Qatar Financial Centre PMI (January)

Africa

Political/Social Events –

·       Benin to hold legislative elections.

·       Burundi celebrates Unity Day.

Economic Reports/Events –

·       Nothing significant to report

Monday, February 6, 2023:  

Global

·       the UN General Assembly will hold its 58th plenary meeting.  Secretary-General António Guterres will deliver remarks on his priorities for 2023. 

·       The UN Security Council is scheduled to hold a meeting on Ukraine. The Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, Martin Griffiths, is expected to brief Council members on the situation in the country.  

·       The United Nations Environment Programme (UNEP) will launch the antimicrobial report (AMR), ‘Bracing for Superbugs: strengthening environmental action in the One Health response to antimicrobial resistance’ at the sixth meeting of the Global Leaders Group on Antimicrobial Resistance. The Global Leaders Group, which aims to accelerate political momentum, leadership, and action on AMR, will take place online and in-person 7-8 February in Barbados.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Canada Ivey PMI (January)

·       Brazil Car Production (January), New Car Registrations (January)

·       Ecuador Inflation Rate (January)

Asia

Political/Social Events –

·       Cross-border travel between China and Hong fully resumes as COVID restrictions are pulled down.

·       47 Hong Kong democracy activists will go on trial after two years of delays. 

Economic Reports/Events –

·       Australia TD-MI Inflation Gauge (January), Retail Sales (December)

·       Indonesia Full Year GDP (2022)

·       Thailand Inflation (January), CPI (January)

Europe

Political/Social Events –

·       The EU General Affairs Council meets in Brussels.  They will discuss the state of play of EU-UK relations and Sweden’s priorities for its presidency of the EU.

·       In Oslo, Norway, Sweden’s and Finland’s defense ministers (Pål Jonson and Mikko Savola, respectively), will meet with the Deputy Secretary-General, Mircea Geonanā, of NATO as part of a  two-day security conference in Oslo dedicated to the war in Ukraine

·       EU President Ursula von der Leyen meets with ECB President Christine Lagarde, Werner Hoyer, President of the European Investment Bank, European Council President Charles Michel, Eurogroup President Paschal Donohue  in Brussels.

·       In the UK, nurses and ambulance workers – more than 10,000 workers – will go on the largest one-day strike in the UK history.  The nurses will also be on strike Tuesday.

Economic Reports/Events –

·       Bank of England Chief Economist Huw Pill participates in a virtual Q&A discussion economic issues.

·       Eurozone S&P Global Construction PMI (January), Retail Sales (December)

·       Germany S&P Global Construction PMI (January), Factory Orders (December)

·       France S&P Global Construction PMI (January), Retail Sales (December)

·       Italy S&P Global Construction PMI (January)

·       Spain Consumer Confidence (January)

·       UK New Car Sales (January), S&P Global/CIPS Construction PMI (January)

·       Hungary Retail Sales (December)

Middle East

Political/Social Events –

·       Turkey will begin requiring oil tankers to have Protection and Indemnity Insurance if they want to cross the Turkish straits.  This is likely to impact oil prices as it will hit Russian and Ukraine shipments.

Economic Reports/Events –

·       Israel Tourist Arrivals (January)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Mozambique Standard Bank PMI (January) 

Tuesday, February 7, 2023:

Global

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

·        International Atomic Energy Agency head Rafael Grossi delivers speech at Chatham House, London entitled “The New Nuclear Order.”

Americas

Political/Social Events –

·       US President Biden will deliver his State of the Union Address before Congress.  He will lay out his agenda for 2023 and likely touch on themes we will hear in his re-election campaign.  Biden is also expected to call for greater regulation of technology, including stricter antitrust enforcement.

·       Grenada celebrates Independence Day, marking the anniversary of the island country gaining independence from Great Britain.

Economic Reports/Events –

·       US Federal Reserve Board Chair Jay Powell will be interviewed by Carlyle Group Co-Executive Chairman David Rubenstein at the Economic Club of Washington, DC.

·       US Federal Reserve Board Vice Chair for Supervision Michael Barr will give a speech at the Mission Investors Exchange Banking on Financial Inclusion: A Hope Economic Mobility Forum” at Jackson State University in Jackson, Mississippi.

·       US Exports/Imports/Balance of Trade (December), Redbook (February 4), IBD/TIPP Economic Optimism (February), Consumer Credit Change (December)

·       Bank of Canada Governor Tiff Macklem will give a speech at the CFA Québec.

·       Canada Exports/Imports/Balance of Trade (December)

·       Brazil BCB Copom Meeting Minutes

·       Chile Exports/Imports/Balance of Trade (January)

·       Mexico Auto Exports (January), Auto Production (January)

·       Uruguay Balance of Trade (December)

·       El Salvador Inflation (January)

Asia

Political/Social Events –

·       Newly installed New Zealand Prime Minister Chris Hipkins meets with Australian Prime Minister Anthony Albanese in Canberra.  They are expected to discuss security and economic issues.

Economic Reports/Events –

·       Japan Household Spending (December), Overtime Pay (December), FX Reserves (January), Coincident Index (December), Leading Economic Index (December)

·       Australia Central Bank Rate Decision, Exports/Imports/Balance of Trade (December), Ai Group Industry Index (January)

·       Philippines Inflation (January), Unemployment Rate (December)

·       Malaysia Industrial Production (December)

·       Taiwan Exports/Imports/Balance of Trade (January)

·       Hong Kong FX Reserves (January)

·       Pakistan Balance of Trade (January)

·       Singapore FX Reserves (January)

·       New Zealand Global Dairy Trade Price Index

Europe

Political/Social Events –

·       German Economic Minister Robert Habeck and French Finance Minister Bruno Le Maire will be in Washington, DC for meetings with the Biden Administration to discuss US green subsidies that were made law in the Inflation Reduction Act.  These meetings takes place two days before a Special European Summit to discuss how to retaliate against the incentives.

·       EU Competitiveness Ministers will hold an informal meeting through February 8th in Brussels.

·       In France, SNCF workers (train workers) will begin a two-day strike to protest against the government’s efforts to reform the pension system.

·       The EU-Republic of Moldova Association Council will meet. The meeting, the first since Moldova was granted EU candidate country status, in Brussels will be co-chaired by the High Representative of the European Union for Foreign Affairs and Security Policy, Mr. Josep Borrell, and the Prime Minister of the Republic of Moldova, Ms. Natalia Gavriliţa. The Commissioner for Neighborhood and Enlargement, Mr. Olivér Várhelyi will represent the European Commission.

Economic Reports/Events –

·       ECB Board Member Isabel Schnabel participates in a moderated webinar "Geldpolitik in Zeiten von Pandemie und Krieg" (Monetary policy in times of pandemic and war) hosted by Finanzwende e.V. 

·       German Industrial Production (December)

·       France Exports/Imports/Balance of Trade (December), Current Account (December), Private Non-Farm Payrolls (Q4), FX Reserves (January)

·       Spain Industrial Production (December)

·       Switzerland Unemployment (January), FX Reserves (January)

·       UK Halifax House Price Index (January), BBA Mortgage Rate (January)

·       Hungary Industrial Production (December)

·       Poland FX Reserves (January)

·       Ukraine FX Reserves (January)

·       Russia FX Reserves (January)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Egypt FX Reserves (January)

·       Israel Business Confidence (January), FX Reserves (January)

·       Turkey Treasury Cash Balance (January)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa FX Reserves (January)

Wednesday, February 8, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       The Wall Street Journal hosts their CFO Network Summit in New York.  New York Fed President John Williams will give remarks.

Economic Reports/Events –

·       Jared Bernstein, a member of the President’s Council of Economic Advisors and rumored to be close to being named the CEA’s Chair, will discuss the US economy at the Brookings Institution and the Hutchins Center on Fiscal & Monetary Policy in Washington, DC.

·       Federal Reserve Board Governor Lisa Cook will speak at the Joint Center for Political and Economic Studies in Washington, DC.

·       US Federal Reserve Board Governor Christopher Waller will speak at the Arkansas State University Agribusiness Conference in Jonesboro, Arkansas.

·       US Wholesale Inventories (December), MBA 30-Year Mortgage Rate (February 3), WASDE Report

·       Chile Inflation (January)

·       Panama Balance of Trade (October & November)

·       Argentina Industrial Production (December)

Asia

Political/Social Events –

·       Philippine President Ferdinand Marcos Jr. begins an “official working visit” to Japan.  Marcos is seeking both stronger economic and security relations with Tokyo.

·       North Korea commemorates the 75th anniversary of the founding of the Korean People’s Army. It is expected a large military parade will be held in Pyongyang with a possible speech from North Korean dictator Kim Jong-un who will likely talk about North Korea’s growing nuclear weapons program.

Economic Reports/Events –

·       China FX Reserves (January)

·       South Korea Current Account (December)

·       Japan Current Account (December), Bank Lending (January), Eco Watchers Survey (January)

·       India Central Bank Interest Rate Decision, Cash Reserve Ratio

·       Australia Central Bank Chart Pack Released

·       Sri Lanka Tourist Arrivals (January)

·       Malaysia Construction Output (Q4), Retail Sales (December)

·       Philippines FX Reserves (January)

Europe

Political/Social Events –

·       The UK Supreme Court to rule on the legality of the Northern Ireland protocol arrangements.

·       The Church of England will hold a general synod to decide whether blessings for gay marriages or civil partnerships should be permitted in England’s churches.

Economic Reports/Events –

·       Italy Retail Sales (December)

·       Hungary Balance of Trade (December), Monetary Policy Meeting Minutes

·       Poland Central Bank Interest Rate Decision

·       Russia GDP (December), Vehicle Sales (January), Inflation (January), Retail Sales (December), Real Wage Growth (November), Business Confidence (January), Corporate Profits (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 –

·       South Africa SACCI Business Confidence (December & January)

Thursday, February 9, 2023:

Global

·       The UN Security Council is scheduled to hold a vote linked to Sudan sanctions. Also, this afternoon, the Security Council is scheduled to hold a briefing on threats to international peace and security caused by terrorist acts. 

Americas

Political/Social Events –

·       Former FBI agent Charles McGonigal, who has been charged with working for sanctioned Russian oligarch Oleg Deripaska, is expected to appear in federal court in New York.

Economic Reports/Events –

·       US Initial Jobless Claims (February 4)

·       Brazil Inflation (January), Retail Sales (December)

·       Mexico Central Bank Interest Rate Decision, Inflation (January)

·       Paraguay Inflation (January)

·       Peru Central Bank Interest Rate Decision, Balance of Trade (December)

Asia

Political/Social Events –

·       Malaysian Prime Minister Anwar Ibrahim makes his first official visit to Thailand.  The agenda is expected to cover economic cooperation and regional security issues.

Economic Reports/Events –

·       Japan Machine Tool Orders (January)

·       India M3 Money Supply (January 27)

·       Taiwan Wholesale Prices (January), Inflation (January),

·       Australia Building Permits (December), Private House Approvals (December)

·       Philippines Industrial Production (December)

·       Malaysia Unemployment (December)

·       New Zealand Business NZ PMI (January), Electronic Retail Card Spending (January)

Europe

Political/Social Events –

·       The European Council will hold a special meeting through February 10th in Brussels.  The meeting will discuss the European Commission’s Green Deal Industrial Plan, which is partly a response to the US’ green incentives passed into law in the Inflation Reduction Act.

·       In the UK, staff workers at universities across the country will go on strike for better pay.

Economic Reports/Events –

·       Bank of England Governor Andrew Bailey at Parliament’s Treasury committee session to discuss the Bank’s latest report.

·       ECB Board Member Luis de Guindos at the Foro Economia y Humanismo organized by Instituto Karol Wojtyla in Madrid.

·       UK RICS House Price Balance (January)

·       Ukraine Inflation (January)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Egypt Inflation (January)

·       Saudi Arabia Industrial Production (December)

·       Turkey FX Reserves (February)

Africa

Political/Social Events –

·       South Africa President State of the Nation Address. Speaking to countries ongoing energy crisis is expected to be the main focus of his speech, and there is speculation Ramaphosa may declare a national state of disaster to fast-track government mitigation responses.  The energy regulator Nersa announced last month they will be hiking electricity prices by 19.65 percent starting in April as a result of the crisis.

Economic Reports/Events –

·       South Africa Mining Production (December), Gold Production (December), Manufacturing Production (December)

Friday, February 10, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       US President Biden will meet with Brazilian President Luiz Inácio Lula da Silva (Lula) at the White House.  They are expected to discuss the US’s support for Brazil’s democracy following the recent attack on the Brazilian Congress.  Other issues will include climate change, food security, and regional security.

·       The US Financial Stability Oversight Board will meet.  Chaired by Secretary of Treasury Janet Yellen, the agenda includes the preliminary agenda includes discussing the Council’s priorities for 2023; the upcoming Treasury report on cloud services adoption in the financial sector; and the Council’s options for assessing and responding to financial stability risks, including nonbank financial company designations

·       Acting US Comptroller of the Currency Michael Hsu will give opening remarks at the OCC’s Bank Merger Symposium in Washington, DC.

·       Fashion Week begins in New York.

Economic Reports/Events –

·       Federal Reserve Board Governor Michael Waller will speak at the Global Interdependence Center’s conference “Digital Money, Decentralized Finance, and the Puzzle of Crypto” in La Jolla, California.  Philadelphia Fed President Patrick Harker will also speak.

·       US Michigan Consumer Sentiment Reports (February), Michigan Inflation Expectations Reports (February), Monthly Budget Statement (January)

·       Canada Employment Figures (January)

·       Mexico Industrial Production (December)

·       Brazil Business Confidence (February)

·       Chile Central Bank Monetary Policy Meeting Minutes

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       China Inflation (January), PPI (January), New Yuan Loans (January), Outstanding Loan Growth (January), Total Social Financing (January), M2 Money Supply (January)

·       Japan PPI (January)

·       India FX Reserves (February 3), Deposit Growth (January), Bank Lona Growth (January), Industrial Production (December), Manufacturing Production (December)

·       Australia Central Bank Statement on Monetary Policy

·       Philippines FDI (November)

·       Thailand Consumer Confidence (January), FX Reserves (January)

·       Malaysia GDP (Q4), Current Account (Q4)

Europe

Political/Social Events –

·       In the UK, Ambulance workers are going out on strike, and BMA opens consultative strike ballot for NHS consultants.

·       Nice, France, begins the 150th Nice Carnival.  Multiple parades, parties, and exhibits are held through February 26th.

Economic Reports/Events –

·       ECB Board Member Isabel Schnabel participates in a Twitter Q&A.

·       Germany Current Account (December), Inflation Rate (January)

·       UK GDP (Q4), Business Investment (Q4), Manufacturing Production (December), Goods Trade Balance (December), Industrial Production (December), Balance of Trade (December), Construction Orders (Q4), Business Investment (Q4), NIESR Monthly GDP Tracker (January)

·       Hungary Inflation (January)

·       Italy Industrial Production (December)

·       Poland Central Bank Monetary Policy Meeting Minutes

·       Russia Central Bank Interest Rate Decision and Press Conference

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey Unemployment Rate (December), Industrial Production (December), Participation Rate (December), Industrial Production (December)

·       Egypt Current Account (Q3), Inflation Rate (January)

Africa:

Political/Social Events –

·       Nigeria’s government has set today as a new deadline to turn in 200-, 500- and 1,000-Naira banknotes in currency swap.  The government was forced to extend the deadline after massive lines developed at banks and commercial activities ground to a halt nationally.

·       In Northern Mali, leadership of the al-Qaeda-linked jihadist group JNIM will reportedly hold meetings with armed groups in northern Mali over a non-aggression pact. UN Peacekeeping forces and the Malian junta have experienced worsening relations, and it is widely expected the UN will withdraw at some point in the near future. Additionally, there has been a break in French-Malian relations leading to the withdrawal of French forces, helping to fight off radical armed groups.

Economic Reports/Events –

·       Mozambique Inflation (January)

Saturday, February 11, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       The Chicago Auto Show begins in Chicago, Illinois.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       China Current Account (Q4)

Europe

Political/Social Events –

·       Portugal is bracing for a third day of demonstrations by teachers demanding higher wages.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Iran celebrates Islamic Revolution Day, marking the revolution of 1979, throwing the Shah out of power and instituting the Islamic Republic.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, February 12, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       The Superbowl will be played between the Kansas City Chiefs and the Philadelphia Eagles in Glendale, Arizona.

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 –

·       Berlin, Germany, holds a re-vote of the municipal elections held on September 26, 2022, following a court order forcing a re-vote.  The September elections were ruled as chaotic by the court, which said it was a “unique event in postwar German election history.”  The chaos came as the city held its annual marathon, which partially paralyzed the city.  Voters had to wait for hours to ca

·       Spain is bracing for a large protest march in Madrid by primary healthcare workers seeking better pay.

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.

Please let us know if you have any questions. And if you or a colleague wish to get these directly, send us an email, and we will add you to our distribution list.

Recommended Weekend Reads

February 3-5, 2023

We thought you might find the following useful reading.  Let us know what you think and if you or a colleague want to be added to our distribution list.  Have a great weekend.

·       “More Cite Government as Top US Problem; Inflation Ranks Second” Gallup

In Gallup’s latest poll, more Americans name the government as the nation’s problem. The government ranks as the top problem for both Republicans and Republican-leaning independents (24%) and Democrats and Democratic-leaning independents (18%).

·       “Putin’s Oil Makes a Stop Off Spain en Route to China”  Bloomberg Opinion

Sanctions are making it riskier and pricier for the Kremlin’s crude to get to Asia, but the EU is still a transit hub. via the town of Ceuta – a tiny Spanish enclave that sticks out of Morocco into the Mediterranean Sea like a thumb. Ceuta is just in the right place: inside the Mediterranean Sea, it’s sheltered from the stormy winds and winter swell of the North Atlantic. 

Source: Bloomberg

·        “What are Large Banks Doing About Climate Change?” The US Federal Reserve Board International Finance Discussion Papers

This new paper by Federal Reserve staff looks at 30 of the biggest banks in the world and their commitments so far to finance green projects.  So far, they have collectively put in $1.2 trillion a year, which will bring them $33.6 trillion by 2050.  But, the paper argues, that will only be approximately 25 percent of what is needed to reach net zero emission goals.

Chart of the Week

Hey Buddy, Looking for Some Eggs?:  We have been hearing a lot lately about the soaring price of eggs, spiking more than 60 percent in recent months (happily, I live on a farm, and our chickens have been quite productive).  The reason for the price surge?  Avian flu outbreaks have decimated chickens across the US.  As a result, egg smuggling from Mexico is becoming a big business.  Bloomberg examined the situation and learned seizures of smuggled eggs have surged more than 300 percent, with many of the seizures being only a few 30 egg flats.  Here is their chart showing what the hottest new smuggling business in America looks like and where eggactly (sorry – couldn’t help myself) it is happening the most:

A Good Read… 

In the Nation’s Service: The Life and Times of George P. Shulz 

George Schultz was a remarkable American by any standard.  In his new, highly illuminating biography of Schulz, former New York Times reporter Philip Taubman reminds us of the extraordinary life Schulz lived and the critical role he played in transforming the country and the world.

Schulz’s resume was long and distinguished (an understatement if there ever was one).  The son of a New York Stock Exchange executive, Schulz was a Marine Corps officer in the Pacific theater during World War II.  When he returned home, he earned Ph.D. in industrial economics at MIT (studying under Robert Samuelson) and then taught at MIT.  He then stepped into public service in  1955 to serve at the Council of Economic Advisors under President Dwight Eisenhower.   

He then went on to become a professor and then dean of the Booth School of Business at the University of Chicago.  He returned to Washington in 1969 to become Secretary of Labor under President Richard Nixon, then Director of the newly created Office of Management and Budget, and then Secretary of Treasury. Leaving public service, he joined the Bechtel Group, where he became its President and a member of its board of directors.  He then returned to public service in 1982 when President Ronald Reagan asked him to serve as Secretary of State. 

What Taubman sheds considerable light on is Schulz’s considerable efforts – and success – at integrating public schools in the South.  Historians tend to focus on Schulz’s herculean efforts under Reagan to bring down the Iron Curtain and skip over Schulz’s championing of civil rights.  He also made considerable inroads with Big Labor, building a strong working relationship with the legendary AFL-CIO President George Meany.   

On a personal note, when I was a very young staffer in the Reagan White House, Schultz was seen as legendary even then within the Administration.  I would occasionally see him in the hallways, and, despite the tremendous sense of gravitas that naturally swirled around him as he headed into a National Security Council meeting or over to the Oval Office, he always had a smile and a hello for us juniors.  That was a really big deal for us.

This is a well-deserved and well-written biography and a great read for anyone with an interest in economics, foreign policy, civil rights, and the history of the last 70 years.  It is also a commentary on how the “best and the brightest” like Schulz are rarely seen in Washington anymore.  Hopefully, this book will inspire more men and women of Schulz’s caliber to serve.

The Global Week Ahead: January 29 - February 5, 2023

This will be a hectic and important week worldwide, politically and economically.  In particular, we are watching closely as US Secretary of State Antony Blinken travels to Israel, Egypt, and the West Bank in the wake of heightened violence between Israel and Palestinians and a reported Israeli drone strike Sunday on an Iranian military base in Iran.  He then travels to Beijing, where he is expected to warn China against aiding Russia via Chinese companies reportedly supporting the war effort. 

While Blinken is in the Middle East, US Secretary of Defense Lloyd Austin will be in Japan and South Korea to discuss regional security issues and tensions with China and North Korea.  Austin will then travel to the Philippines, where he is expected to discuss launching joint naval patrols in the West Philippine Sea with the Philippine Navy in response to increased Chinese Naval activity.  Austin will follow NATO Secretary-General Jens Stoltenberg, who will also visit Japan and South Korea for meetings with senior defense officials.

It is a big week for global markets as the US Federal Reserve, the European Central Bank, and the Bank of England make interest rate decisions this week.  Additionally, a flood of economic data is being reported globally this week – including a revised IMF Global Economic Outlook – which markets will have to digest.

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

Sunday, January 29, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       US Secretary of State Antony Blinken travels to Israel, Egypt, and the West Bank.  The visit comes at a time of renewed tensions and violence between Israelis and Palestinians.  This past week, Israeli commandos killed seven gunmen and two civilians in the West Bank.  This is the first visit by Blinken to Israel since Benjamin Netanyahu’s return to power after the November elections.   It is expected Blinken will seek to discuss with Netanyahu upholding the status quo around the Temple Mount as well as Iran, and the Ukrainian War. Blinken is also scheduled to meet with Palestinian Authority President Mahmoud Abass.  In Egypt, he will meet with Egyptian President Abdel Fattah El-Sisi to discuss mutual support for the election in Libya and the formation of talks to form a civilian government in Sudan following a military coup in 2021.

·       US Defense Secretary Lloyd Austin visits the Philippines through January 30th to meet with his counterpart, Defense Secretary Carlito Galvez, Jr.  There have been discussions of the US and Philippines conducting joint naval patrols in the West Philippine Sea in response to heightened Chinese activity in the area. 

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       NATO Secretary-General Jens Stoltenberg begins a four-day visit to South Korea and Japan.  He will meet with South Korean Foreign Minister Park Jin and Defense Minister Lee Jong-Sup. South Korea has been stepping up cooperation with NATO recently as a result of the Russian invasion of Ukraine, and South Korean President Yoon Suk Yeol attended the NATO Summit this past June, the first South Korean leader to take part in a NATO Summit.   In Japan, he will meet with Prime Minister Fumio Kishida and other senior officials to discuss strengthening NATO cooperation with Japan.  Prime Minister Kishida recently announced Japan’s intention to increase defense spending to more than 2 percent of GDP, in line with NATO member countries that are required to give in support of NATO.

·       Pakistan’s Foreign Minister Bilawal Bhutto Zardari will visit Moscow for bilateral meetings with Russian Foreign Minister Sergey Lavrov.

·       UN General Assembly President Csaba Korosi will be in India for meetings with Indian External Affairs Minister Dr. S. Jaishankar.  India is the current president of the G20, and Korosi, who was elected the UNGA President in September, will seek to discuss a variety of regional and global issues as well as sustainability-related issues.

Economic Reports/Events –

·       Vietnam CPI (January), Industrial Output (January), Exports/Imports/Balance of Trade (January)

Europe

Political/Social Events –

·       German Chancellor Olaf Scholz and Development Minister Svenja Schulze will travel to Argentina, Chile, and Brazil. Scholz will commemorate the Argentine military dictatorship and participate in the German-Chilean economic forum and visit a Brazilian national park.. Schulze will hold meetings in Brazil on how to better protect the rainforest as well as discuss other critical environmental and climate protection issues.

·       Austria holds regional elections.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Qatar Balance of Trade (December)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Monday, January 30, 2023:  

Global

·        The UN Security Council is scheduled to hold a vote linked to the United Nations Peacekeeping Force in Cyprus (UNFICYP). They are also scheduled to hold consultations on the United Nations Regional Centre for Preventive Diplomacy for Central Asia. 

·       U.N. General Assembly President Csaba Korosi will visit China, where he will discuss the Assembly's Sustainable Development Goals, directly following his visit to India.

Americas

Political/Social Events –

·       US Defense Secretary Lloyd Austin will meet with South Korean Defense Minister Lee Jong-sup following Jong-sup’s meeting with NATO Secretary-General Stoltenberg.  Austin will meet at the Joint Security Area – the border with North Korea – the first time a US Defense Secretary has met with his South Korean counterpart there since 2017. It comes as North Korea continues to bolster its nuclear weapons program.  Additionally,  South Korea is increasingly becoming a larger supplier of weapons to NATO and recently delivered 10 K2 tanks and 24 self-propelled K9 howitzers to Poland as part of an almost $6 billion agreement with Hundai Rotem and Hanwha Defense Systems Corporation.

·       Both the US Senate and House of Representatives are in session this week.  Senate Republicans will finalize Republican committee assignments, allowing committees to move forward with hearings and other official business. 

·       Peru is bracing for a strike by farmers in the wake of deadly riots following the ousting and arrest after he tried to dissolve the Congress.

·       Former President Trump advisor Peter Navarro goes on trial for failing to comply with a subpoena from the House January 6th Committee investigating the January 6, 2021 attack on the US Capitol.

Economic Reports/Events –

·       US Dallas Fed Manufacturing Index (January),

·       Brazil BCB Focus Market Readout, Nominal Budget Balance (December)

·       Mexico Fiscal Balance (December)

·       Chile Unemployment Rate (December)

Asia

Political/Social Events –

·       India observes Martyrs’ Day, commemorating the death of Mahatma Gandhi, who was assassinated in 1948.

·       New Zealand observes Northland Anniversary Day, a public holiday commemorating the arrival of William Hobson, a British Royal Navy Officer and first Governor of New Zealand.

Economic Reports/Events –

·       Sri Lanka Inflation (January)

·       Pakistan Consumer Confidence (January)

·       Malaysia PPI (December)

Europe

Political/Social Events –

·       The EU Agriculture and Fisheries Council meet. They will receive a presentation by the Swedish presidency on its work program for the semester, and exchange views on the current market situation, particularly in light of Russia’s invasion of Ukraine and the need for a strategic approach for the EU’s agri-food sector in light of the war in Ukraine, as well as the impact of agricultural imports from Ukraine on EU markets.

·       In the UK, workers at the Drivers and Vehicle Standards Agency will go on strike over pay. 

Economic Reports/Events –

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

·       Spain Inflation (January), Retail Sales (December), Business Confidence (January)

·       Italy PPI (December)

·       Switzerland KOF Leading Indicators (January)

Middle East

Political/Social Events –

·       Turkey’s coalition of six opposition parties – known as “The Table of Six” – will meet to announce a common policy platform for their yet-to-be-named presidential candidate (who they are expected to name in February).  Elections are set for May 14th for both the Turkish presidency and the Turkish parliament.

Economic Reports/Events –

·       Turkey Economic Confidence Index (January)

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

·       Kuwait Private Bank Lending (December), M2 Money Supply (December)

·       Oman Budget Balance (November)

Africa

Political/Social Events –

·       In South Africa, the trial of former President Jacob Zuma for corruption resumes in Johannesburg.

Economic Reports/Events –

·       Ghana Central Bank Interest Rate Decision

·       Kenya Interest Rate Decision 

Tuesday, January 31, 2023: 

Global

·       An updated IMF Economic Outlook will be released.  The previous Outlook update in October 2022 downgraded GDP growth expectations to 2.7 percent from 2.9 percent. 

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       The US Federal Reserve Open Market Committee begins two days of meetings to discuss a possible rate increase.

·       US Employment Cost (Q4), Redbook (January), S&P/Case-Shiller Home Price (November), House Price Index (November), Chicago PMI (January), CB Consumer Confidence (January), Dallas Fed Services Revenues Index (January),

·       Canada GDP (November)

·       Mexico GDP (Q4)

·       Colombia Monetary Policy Minutes, Cement Production (December), Unemployment (December), Exports (December)

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

Asia

Political/Social Events –

·       The Indian government will present its final full-year 2023 budget.  This comes in advance of the 2024 elections, which makes this budget proposal a tough balancing act between populist measures and fiscal cut-backs for Prime Minister Narendra Modi.

·       An IMF team will visit Pakistan through February 9th to discuss conditions of a financial assistance package.

·       Nauru celebrates Independence Day, commemorating the day the Micronesia island nation became independent in 1968.

Economic Reports/Events –

·       China NBS Manufacturing PMI (January), NBS Non-Manufacturing PMI (January), NBS General PMI (January), Industrial Profits (December)

·       India Government Budget Value (December), Infrastructure Output (December)

·       South Korea Industrial Policy (December), Retail Sales (December)

·       Japan Unemployment Rate (December), Industrial Production (December), Retail Sales (December), Consumer Confidence (January), Housing Starts (December), Construction Orders (December)

·       Australia Retail Sales (December), Housing Credit (December), Private Sector Credit (December)

·       Taiwan M2 Money Supply (December), Export Orders (December),

·       Thailand Coincident Index (December), Retail Sales (November), Industrial Production (December)

·       Singapore Bank Lending (December), Unemployment Rate (Q4), Business Confidence (Q4)

·       Malaysia M3 Money Supply (December)

·       Thailand Private Investment (December), Private Consumption (December), Current Account (December)

·       Philippines PPI (December)

Europe

Political/Social Events –

·       France is bracing for nationwide protests led by the main trade unions in opposition to the ongoing parliamentary efforts led by President Emmanuel Macron to reform the pension system.  The reform would, among other things, raise the retirement age from 62 to 64 or face monthly payouts being curtailed, as well as streamline the 42 different state-supported pension systems.  Overall, the entire French pension system costs the government just under 14 percent of GDP. The strikes have become more intense in recent weeks.  Last week, energy workers who are part of the CGT union cut electricity to President Macron’s supporters and wealthy neighborhoods while giving discounted power and gas to poorer customers. 

Economic Reports/Events –

·       Eurozone GDP (Q4)

·       France GDP (Q4), Household Consumption (December), Inflation (January), PPI (December)

·       Germany Inflation (January), Retail Sales (December), Unemployment Figures (January), GDP (Q4)

·       Italy GDP (Q4), Unemployment (December)

·       Spain Current Account (November)

·       UK BoE Consumer Credit (December), Mortgage Approvals & Lending (December), Net Lending to Individuals (December)

·       Switzerland Retail Sales (December)

·       Ukraine Current Account (December)

·       Russia M2 Money Supply (December)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia GDP (Q4)

·       Turkey Imports/Exports/Balance of Trade (December), Tourism Revenues (Q4)

·       Iran Inflation (January)

·       Egypt M2 Money Supply (December)

Africa

Political/Social Events –

·       Pope Francis is scheduled to visit the Democratic Republic of the Congo and South Sudan.  He will be accompanied by the Archbishop of Canterbury, Justin Welby, and the Moderate of the Presbyterian Church of Scotland, Iain Greenshields. 

·       Ghana has extended to today the deadline for bondholder exchange as part of a debt restructuring.  If there is less than an 80 percent participation rate in the exchange, the government may have to extend the deadline again, which will further delay IMF aid.

Economic Reports/Events –

·       South Africa M3 Money Supply (December), Private Sector Credit (December), Balance of Trade (December)

·       Kenya Inflation (January), Central Bank Interest Rate Decision

·       Nigeria FX Reserves (January) 

Wednesday, February 1, 2023:

Global

·       OPEC+ Ministerial Meeting will be held virtually.  It is expected they will not change the group’s current oil output policy.

·       Malta will take the presidency of the UN Security Council for the month of February.

·       the Joint United Nations Program on HIV/AIDS (UNAIDS), the UN Children’s Fund (UNICEF), and the World Health Organization (WHO) will launch a Global Alliance to End AIDS in Children Africa in Geneva, Switzerland.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       The Federal Reserve Open Market Committee Interest Rate Decision; Fed Chair Jay Powell Press Conference.

·       US MBA 30-Year Mortgage Rate/Mortgage Applications/Market Index (January), ADP Employment Change (January), S&P Global Manufacturing PMI (January), ISM Manufacturing PMI (January), ISM Manufacturing Employment (January), JOLTs Report (December), Construction Spending (December), ISM Manufacturing New Orders (January), Total Vehicle Sales (January)

·       Canada S&P Global Manufacturing PMI (January)

·       Brazil Central Bank Interest Decision PPI (December), S&P Global Manufacturing PMI (January), S&P Global Manufacturing PMI (January), Balance of Trade (January),

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

·       Argentina Tax Revenues (January)

·       Peru Inflation (January)

·       Colombia Davivienda Manufacturing PMI (January)

·       Chile IMACEC Economic Activity (December)

Asia

Political/Social Events –

·       The 22nd OECD-Asia Development Bank Roundtable on Capital Market and Financial Reform in Asia is held in Tokyo, Japan.  Leading regional regulators are expected to attend.

·       Malaysia celebrates Federal Territory Day, a public holiday marking he day in 1974 Kuala Lumpur became a Federal Territory.

Economic Reports/Events –

·       China Caixan Manufacturing PMI (January)

·       India S&P Global Manufacturing PMI (January), Union Budget 2023-2024

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

·       Japan Jibun Bank Manufacturing PMI (January)

·       Hong Kong GDP (Q4)

·       Taiwan Retail Sales (December), Industrial Production (December), S&P Global Manufacturing PMI (January)

·       Vietnam S&P Global Manufacturing PMI (January)

·        

·       Australia Ai Group Manufacturing Index (January), Judo Bank Manufacturing PMI (January), CoreLogic Dwelling Rate (January), Commodity Prices (January)

·       Indonesia S&P Global Manufacturing PMI (January), Inflation (January), Tourist Arrivals (December)

·       Thailand S&P Global Manufacturing PMI (January)

·       Sri Lanka Balance of Trade (December)

·       Pakistan Inflation Rate (January), Wholesale Prices (January)

Europe

Political/Social Events –

·       France will be hit by a nationwide strike by civil servants opposing pension reform efforts.

·       In the UK, the Trades Union Congress holds “protect the right to strike” day of action in protest at the Strikes (Minimum Service Levels) Bill.  This could result in the single largest one-day strike – over 100,000 civil servants - occurring in England in decades.

Economic Reports/Events –

·       Eurozone S&P Global Manufacturing PMI (January), Unemployment Rate (December) Inflation (January), CPI (January)

·       UK National wide Housing Prices (January), S&P Global/CIPS Manufacturing PMI (January)

·       Italy S&P Global Manufacturing PMI (January), Inflation (January), CPI (January)

·       Germany S&P Global Manufacturing PMI (January)

·       France S&P Global Manufacturing PMI (January)

·       Spain S&P Global Manufacturing PMI (January), New Car Sales (January)

·       Switzerland procure.ch Manufacturing PMI (January)

·       Poland S&P Global Manufacturing PMI (January)

·       Russia S&P Global Manufacturing PMI (January), Industrial Production (December)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey Istanbul Chamber of Industry Manufacturing PMI (January)

·       Egypt Current Account (Q3)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa ABSA Manufacturing PMI (January), Total New Vehicles (January)

·       Nigeria Stanbic IBTC Bank Nigeria PMI (January)

·       Angola FX Reserves (January)

Thursday, February 2, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       US Treasury Undersecretary for Terrorism and Financial Intelligence Brian Nelson will travel to Oman, the UAE, and Turkey to reiterate that Washington will aggressively enforce sanctions on Russia.  The meetings come among reports that various businesses located in these countries are skirting sanctions to do business with Russia.

·       It’s Groundhog Day in the United States. Let’s hope Punxsutawney Phil doesn’t see his shadow, or it’s another six weeks of winter.

Economic Reports/Events –

·       US Challenger Job Cuts (January), Jobless Claims (January 28), Unit Labor Costs (Q4), Factory Orders (December)=

·       Canada Building Permits (December)

·       Brazil IPC-Fipe Inflation (January)

·       Mexico FX Reserves (December)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea Inflation (January), CPI (January)

·       Australia Building Permits (December), Private House Approvals (December)

·       Singapore SIPMM Manufacturing PMI (January)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       ECB Interest Rate Decision, ECB Press Conference, Release of the “ECB Podcast: President Lagarde presents the latest monetary policy decisions”

·       ECB President Christine Lagarde gives the opening keynote speech Christine Lagarde
at the awards ceremony of the Franco-German Business Awards 2023 on the occasion of the 60th anniversary of the Traité de l'Elysée in Paris, France.

·       Germany Imports/Exports/Balance of Trade (December)

·       France Budget Balance (December), New Car Registrations (January)

·       UK Bank of England Interest Rate Decision, MPC Meeting Minutes, Bank of England Monetary Policy Report.

·       Spain Unemployment (January), Tourist Arrivals (December),

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey FX Reserves (January), Exports/Imports/Balance of Trade (January)

·       Egypt Central Bank Interest Rate Decision

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report. 

Friday, February 3, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       President Biden and Vice President Harris will travel to Philadelphia, Pennsylvania to attend the Democratic National Committee’s winter meeting.  It is also in advance of President Biden’s State of the Union address on February 7th and it is expected the President’s speech in Philadelphia will likely be a preview of what he will call for in the State of the Union (and themes we will likely hear from him on the re-election campaign trail in 2024)

Economic Reports/Events –

·       US Unemployment Rate (January), Non-Farm Payrolls (January), Participation Rate (January), Average Hourly Earnings (January), Manufacturing Payrolls (January), S&P Global Services PMI (January), S&P Global Composite PMI (January), ISM Non-Manufacturing PMI (January), ISM Non-Manufacturing Employment (January), ISM Non-Manufacturing New Orders (January), ISM Non-Manufacturing Business Activity (January), ISM Non-Manufacturing Prices (January)

·       Brazil industrial Production (December), Consumer Confidence (January), S&P Global Services PMI (January), S&P Global Composite PMI (January)

·       Mexico Consumer Confidence (January)

·       Colombia PPI (January)

·       Uruguay Inflation (January)

Asia

Political/Social Events –

·       The Eurasian Economic Union's prime ministers will hold a meeting in Almaty, Kazakhstan.

·       Japan implements new controls on exports to Russia of vaccines, medical equipment, robots, and other technology.

·       ASEAN Foreign Ministers will meet in Jakarta, Indonesia, through Saturday.  Among the agenda items will be a discussion of the situation in Myanmar, which marked the 2nd anniversary of the coup ousting President Aung San Suu Kyi and installing a military dictatorship.

Economic Reports/Events –

·       China Caixin Composite & Services PMIs (January)

·       Japan Jibun Bank Services PMI (January), Jibun Bank Composite PMI (January)

·       India S&P Global Services PMI (January), S&P Global Composite PMI (January), FX Reserves (January 27)

·       South Korea FX Reserves (January)

·       Singapore S&P Global PMI (January), Retail Sales (December)

·       Australia Ai Group Construction Index (January), Home Loans (December), Investment Lending for Homes (December)

·       Hong Kong FX Reserves (January), S&P Global PMI (January)

·       Taiwan FX Reserves (January)

Europe

Political/Social Events –

·       The EU-Ukraine Summit will be held in Kyiv, Ukraine and hosted by Ukrainian President Volodymyr Zelensky.   European Commission President Ursula von Leyen and European Council President Charles Michel are scheduled to attend.

·       The UK’s RMT and Aslef unions (representing railways and train drivers) go on strike over pay and work conditions.

·       Also in the UK, the PCS union (which represents legal advisors and court associates) are expected to go on strike in England and Wales.

Economic Reports/Events –

·       ECB Board Member Frank Elderson gives a virtual speech at ECB Industry Outreach event on Climate-related and Environmental Risk.

·       Eurozone S&P Global Services PMI (January), S&P Global Composite PMI (January), PPI (December)

·       Germany S&P Global Services PMI (January), S&P Global Composite PMI (January)

·       UK S&P Global/CIPS UK Services PMI (January), S&P Global/CIPS Composite PMI (January)

·       France Industrial Production (December), S&P Global Services PMI (January), S&P Global Composite PMI (January)

·       Spain S&P Global Services PMI (January), S&P Global Composite PMI (January)

·       Italy S&P Global Services PMI (January), S&P Global Composite PMI (January)

·       Ukraine GDP (Q4)

·       Russia S&P Global Services PMI (January), S&P Global Composite PMI (January)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey Inflation (January), PPI (January), CPI (January)

·       Lebanon BLOM Lebanon PMI (January)

Africa:

Political/Social Events –

·       Mozambique celebrates Heroes Day, a national holiday honoring those who laid down their lives for the cause of independence.

Economic Reports/Events –

·       South Africa S&P Global PMI (January)

·       Kenya Stanbic Bank PMI (January)

·       Ghana PMI (January)

·       Uganda PMI (January)

·       Zambia PMI (January 

Saturday, February 4, 2023: 

Global

·       World Cancer Day is observed.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Colombia Inflation (January)

Asia

Political/Social Events –

·       Sri Lanka celebrates National Day, a public holiday marking the date when the country gained independence from Great Britain in 1972.

·       The Sapporo Snow Festival will be held in Hokkaido, Japan, for the first time in two years due to COVID.  The event is famous for its massive and ornate snow and ice sculptures. It runs through February 11th.

Economic Reports/Events –

·       Australia Judo Bank Services PMI (January), Judo Bank Composite PMI (January)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Germany New Car Registrations (January)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia Riyad Bank PMI (January)

Africa

Political/Social Events –

·       Angola celebrates Liberation Day, marking the day militants attacked a police patrol car and assaulted the Civil Jail of So Paulo, as well as the Military Detection House and police barracks, in an attempt to release political prisoners held captive there.

Economic Reports/Events –

·       Nothing significant to report. 

Sunday, February 5, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       US Secretary of State Antony Blinken travels to Beijing for meetings with Foreign Minister Qin Gang to discuss a host of issues, including China’s alleged support for the Russian war effort.

·       Ecuador holds local elections as well as a national referendum on changing eight amendments of the constitution.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Japan’s opposition Innovation Party to hold a convention in Osaka.

·       Japan’s Aichi Prefecture holds gubernatorial elections.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Cyprus holds the first round of presidential elections.  A run-off vote will be held on February 12th (if needed).

·       The EU ban on Russian oil products takes effect.

·       The Republic of San Marino celebrates Liberation Day, a public holiday observing the day of liberation from Abelonian occupation in 1740.  It is also the celebration of St. Agatha, the patron saint of San Marino.

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.

Please let us know if you have any questions or if you or a colleague would like to be added to our distribution list. 

Recommended Weekend Reads:

January 27 -29, 2023

We thought you might find the following useful reading.  Let us know what you think and if you or a colleague want to be added to our distribution list.  Have a great weekend.

·       “China Increasingly Relies on Imported Food. That’s a Problem” Council on Foreign Relations

China has increased its reliance on food imports over the past two decades – reaching a record high of 687 million tons in 2022 – prompting concerns among officials who worry that disruptions to food supply chains could trigger domestic unrest. In particular, this reliance has heightened China’s sensitivity to food supply disruptions caused by geopolitical tensions, such as Russia’s war in Ukraine.

·       “U.S. LNG: Remapping Energy Security” Center for Strategic and International Studies

This interactive report details how the natural gas market radically shifted in 2022 following Russia’s invasion of Ukraine. Since then, energy security in Europe—and globally—now rests on U.S. natural gas exports. So what is the future of US LNG production and which countries are increasingly dependent on it?

“The US Demographic Outlook: 2023 to 2053” Congressional Budget Office

In CBO’s projections, the U.S. population will increase from 336 million in 2023 to 373 million in 2053.  Population growth is increasingly driven by net immigration, which accounts for all population growth beginning in 2042.

·       “Dolphins Spotted Swimming in New York City’s Bronx River” New Scientist

Once an industrial waste dumpsite, the Bronx River is now healthy enough to host marine species – including dolphins – that it hasn’t seen in years

Charts of the Week:

The first chart we wanted to highlight this week goes to the Congressional Budget Office report on the U.S. demographic outlook noted above.  Within two decades, America’s population gains will be entirely driven by immigrants.  And much of it will come in the so-called prime-age bracket (25-54 years old).

Our second chart we wanted to share goes to the announcement this week that White House Chief of Staff Ron Klain is stepping down and is being replaced by Jeff Zients and hints other senior staff are preparing to leave. This chart shows the turnover is well within the norm for second year of an Administration.

The Global Week Ahead January 22-29, 2023:

Happy Year of the Rabbit!  China and much of the rest of Asia celebrate the Lunar New Year this week, an event that could see an estimated 2 billion visits by Chinese in the coming weeks despite COVID continuing to rage across the country. 

The EU Foreign Affairs Council will meet to discuss slapping new sanctions on Iran over their nuclear weapons development, a likely final nail in the efforts to bring back to life the JCPOA (Joint Comprehensive Plan of Action), which President Trump pulled out of in 2018.  Elsewhere, Russian Foreign Minister Sergey Lavrov travels to South Africa in an attempt to counter the impact of President Biden’s successful Africa Summit in December.  Russia is increasingly looking to find allies in Africa.

And the World Health Organization (WHO) will meet to decide whether to classify COVID as a global pandemic. 

The US Congress returns from a week off and will likely begin the long, slow political battle over raising the debt ceiling.  US Treasury Secretary Janet Yellen said two weeks ago the ceiling would be hit this past Thursday and “extraordinary means” would be undertaken to avoid a default.  We do not see a deal emerging for months and historically high risk a default could occur considering the intra-party fractures in the House Republican Caucus over the issue.

On the global economic agenda this week,  the US will release Q4 GDP figures and global PMI numbers.  The Bank of Canada will decide on a possible rate increase, and we will see the Bank of Japan release minutes from their most recent interest rate meeting.  Other interest rate decisions will be taken in Thailand, Hungary, and Nigeria.   Europe, Germany, Italy, and France will release consumer confidence figures.  And in Asia, Japan will be releasing PMIs and the Tokyo CPI. 

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

Sunday, January 22, 2023:

Global

·       UN Secretary-General António Guterres will attend the Ocean Race Summit, which is taking place in Mindelo, a city on the island of São Vicente in Cape Verde.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       China celebrates the beginning of the Lunar New Year (the Year of the Rabbit). Despite rampant cases of COVID, Chinese officials expect more than 2 billion trips to be taken between now and February 15th.

·       New Zealand's ruling Labor Party will vote for a new leader and interim prime minister after the current Prime Minister, Jacinda Ardern, announced her intention to step down.  The 42-year-old said last week she “no longer had enough in the tank” for the premiership.  A general election has been called for October 14th.

·       Japan’s Yamanashi Prefecture holds gubernatorial elections.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       The Franco-German Council of Ministers is scheduled to be held this weekend. German Chancellor Olaf Scholz and his cabinet will travel to Paris, and there will also be a joint ceremony of the two parliaments at the Sorbonne University. The occasion: 60 years of the Élysée Treaty. A press conference by Scholz and France’s Macron is expected on Sunday.

·       Italian Prime Minister Giorgia Meloni will travel to Algeria today and through Monday as part of efforts to boost Italy’s natural gas supply through suppliers besides Russia.

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.

Monday, January 23, 2023:

Global

·       The OECD holds a High-Level Symposium on Pro-Competitive Policies for a Sustainable Economy in Paris, France.

Americas

Political/Social Events –

·       The US Congress returns to session this evening following being out last week for the Martin Luther King holiday.

·       Brazilian President Luiz Inácio Lula da Silva visits Argentina.

Economic Reports/Events –

·       US CB Leading Index (December)

·       Canada New Housing Price Index (December)

·       Central Bank of Brazil Focus Market Readout

Asia

Political/Social Events –

·       The Philippines celebrates First Philippine Republic Day, marking the day Emilio Aguinaldo declared the country's independence after 300 years of Spanish rule.

·       India observers Parakram Diwas, a national holiday marking the birth of Netaji Subhas Chanda Bose, a prominent nationalist and politician.

·       Japan’s Diet (Legislature) convenes.  Prime Minister Fumio Kishida will deliver a policy speech to the Diet, likely focusing on budget and defense issues.

·       The Head of the Japan Business Federation, known as Keidanren, and the head of the Japanese Trade Union Confederation, known as Rengo, to hold a meeting about annual "shunto" spring wage negotiations.

Economic Reports/Events –

·       Bank of Japan Monetary Policy Meeting Minutes

·       Singapore URA Property Index (Q4)

Europe

Political/Social Events –

·       Russian Foreign Minister Sergei Lavrov to visit South Africa.  The visit is seen by some as an attempt to offset President Biden’s Africa Summit in December, where more than 55 African leaders attended.  Lavrov is then expected to visit Morocco, Algeria, Mauritania, and Tunisia in February.

·       The EU Foreign Affairs Council meets to discuss possible new sanctions on Iran.  They will also discuss Russian aggression against Ukraine and the Sahel and coastal countries of West Africa. It will also be informed about current affairs, with a focus on Armenia, Afghanistan, Venezuela, Montenegro, and Ethiopia. Over a working lunch, EU foreign affairs ministers will hold an informal exchange of views with the Palestinian Prime Minister Mohammed Shtayyeh.

·       In the UK, over 2,600 members of the Unison union who are ambulance workers will go on strike.  Additionally, an estimated 1,000 Welsh Ambulance Services members who are members of the Unite union will go on a 24-hour strike over pay.

Economic Reports/Events –

·       ECB President Christine Lagarde gives a speech at the Deutsche Börse Annual Reception in Eschborn, Germany.

·       ECB Board Member Fabio Panetta gives an introductory statement at the Hearing before the Committee on Economic and Monetary Affairs (ECON) of the European Parliament in Brussels.

·       UK CBI Director-General Tony Dankers gives a speech, “Is the UK Stuck in a Rut on Growth?” at the UCL campus in London.

·       Eurozone Consumer Confidence (January)

·       German Economics Minister Robert Habeck and Elga Bartsch, the new department head for economic policy, will present the Annual Economic Report 2023 at the Federal Press Conference.

Middle East

Political/Social Events –

·       The Chairman of the Russian State Duma (parliament), Vyacheslav Volodin, is expected to visit Tehran for meetings on trade and military procurement.

Economic Reports/Events –

·       Turkey Consumer Confidence (January)

Africa

Political/Social Events –

·       In London, Nigeria is due to mount a legal defense at London’s High Court, fighting to overturn an $11 billion arbitration award that left the Nigerian government owing more than a quarter of its foreign reserves to an oil & gas company, Process and Industrial Developments.

Economic Reports/Events –

·       Nothing significant to report.

Tuesday, January 24, 2023:

Global

·       The UN Security Council meets to discuss the situation in Haiti.

Americas

Political/Social Events –

·       Argentina hosts a conference of the Community of Latin American and Caribbean States (CELAC).  CELAC consists of 33 countries in the Americas.  The US and Canada are not included.

Economic Reports/Events –

·       US Redbook (January 21st), S&P Global Manufacturing PMI/Global Services PMI (January), Richmond Fed Manufacturing Shipments Index (January), Richmond Fed Manufacturing Index (January)

·       Canada Manufacturing Sales (December)

·       Brazil Federal Tax Revenues (December), IPCA mid-month CPI (January)

·       Mexico Mid-month Inflation Rate (January)

·       Argentina Economic Activity (November)

Asia

Political/Social Events –

·       New Zealand will see Chris Hipkins sworn in as the new Prime Minister following Prime Minister Jacinda Ardern’s resignation last week.

·       Mitsubishi Heavy Industries Ltd. to launch an H-2A rocket carrying a Japanese government intelligence-gathering satellite.

Economic Reports/Events –

·       Japan Jibun Bank Manufacturing PMI/Services PMI (January)

·       Australia Judo Bank Manufacturing PMI/Services PMI (January), NAB Business Confidence (December)

·       Indonesia M2 Money Supply (December)

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

Europe

Political/Social Events –

·       The EU Parliament is expected to vote on the European Commission’s version of the Chips Act, which is aimed at strengthening the EU’s semiconductor supply chain.

·       EU President Ursula von der Leyen meetings with Netherlands Prime Minister Mark Rutte.

·       The UK Shadow Foreign Secret David Lammy will lay out the Labour Party’s foreign policy in London.

·       The 15th European Space Conference will be held in Brussels.

·       Romania celebrates Unification Day, marking the day in 1859 when the two Romanian principalities of “Modavia” and “Wallachia” came together to form the Union of the Romanian Principalities.

Economic Reports/Events –

·       ECB President Christine Lagarde gives a video message at a roundtable entitled "The euro as a guarantee of resilience" at a high-level conference entitled "Croatia, the 20th member of the eurozone" in Zagreb, Croatia.

·       ECB Board Member Kerstin af Jochnick participates in a panel entitled “Regulated Financial Service Providers” at 11th Institute for Law and Finance' conference “The Next Systemic Financial Crisis – Where Might it Come From?”: Financial Stability in a Polycrisis World”  hosted by the University of Frankfurt, Germany.

·       Eurozone S&P Global Manufacturing PMI/Global Services PMI (January)

·       Germany GfK Consumer, S&P Global Manufacturing PMI/Global Services PMI (January)

·       France Business Confidence (January), Business Climate Indicator (January), S&P Global Manufacturing PMI/Global Services PMI (January)

·       UK Public Sector Net Borrowing (December), S&P Global/CIPS Global Manufacturing PMI/Global Services PMI (January)

·       Hungary Central Bank monetary decision

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 –

·       South Africa Leading Business Cycle Indicator (November)

·       Nigerian Central Bank interest-rate decision

·       Tanzania GDP  

Wednesday, January 25, 2023:

Global

·       The UN Security Council is scheduled to hold a briefing followed by consultations on the Middle East (Syria). In the afternoon, the Security Council is scheduled to hold a briefing on the International Criminal Court (ICC) Sudan.

Americas

Political/Social Events –

·       Brazilian President Luiz Inacio Lula da Silva will meet with Uruguayan President Luis Lacalle Pou in Uruguay after attending the CELAC Conference.

·       Bolivia is bracing for large-scale protests calling for the release of Santa Cruz Provincial Governor Luis Fernando Camacho.  Camacho, a leading national voice for the right-wing opposition, was arrested in December and charged with “terrorism” for his alleged involvement in the 2019 political unrest that resulted in then-President Evo Morales fleeing the country.

Economic Reports/Events –

·       US MBA 30-Year Mortgage Rate (January 20th), MBA Mortgage Applications (January 20th), MBA Mortgage Market Index (January 20th)

·       Bank of Canada Interest Rate Decision and Monetary Policy Report

·       Brazil  FGV Consumer Confidence (January)

·       Mexico Economic Activity (November)

·       Argentina Interest Rate Decision, Retail Sales (November)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Japan Leading Economic Index Final (November), Coincident Index Final (November)

·       Singapore CPI (December), Inflation Rate (December)

·       Australia Westpac Leading Index (December), Inflation Rate (Q4), Monthly CPI Indicator (December)

·       Bank of Thailand Interest Rate Decision

·       Central Bank of Sri Lanka Interest Rate Decision

Europe

Political/Social Events –

·       The EU Justice and Home Affairs Ministers will hold an informal meeting (through the 27th).

·       EU President Ursula von der Leyen meets with Israeli President Isaac Herzog.

·       Portugal’s airline, PortugalTAP, will experience a strike by their cabin crews who are seeking better pay and working conditions.

·       In the UK, Amazon workers who are members of the GMB union and work at a warehouse in Coventry will go on strike over pay.

Economic Reports/Events –

·       ECB Non-Monetary Policy Meeting

·       Germany Ifo Business Climate (January), Current Conditions (January), Ifo Expectations (January)

·       France Unemployment Benefit Claims (December)

·       Spain PPI (December)

·       Russia PPI (December)

Middle East

Political/Social Events –

·       Egypt marks the 12th anniversary of its 2011 revolution, which led to the resignation of President Hosni Mubarak.

Economic Reports/Events –

·       Saudi Arabia Balance of Trade (November)

·       Turkey Business Confidence (January), Capacity Utilization (January)

Africa

Political/Social Events –

·       Tunisia is bracing for a Tunisian General Labor Union-backed transportation sector strike through Jan. 26.

·       The African Development Bank, the Senegalese government, and the Africa Union Commission will host a food summit on the theme “Feed Africa: Food Sovereignty and Resilience.”

Economic Reports/Events –

·       Mozambique interest-rate decision 

Thursday, January 26, 2023:

Global

·       the UN Security Council is scheduled to hold an open debate on “Peacebuilding and sustaining peace: Investment in People to enhance resilience against complex challenges.”

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       US GDP (Q4), Durable Goods Orders (December), Retail Inventories (December), Wholesale Inventories (December), Jobless Claims (January), Real Consumer Spending (Q4), New Home Sales (December), Kansas Fed Manufacturing Index (January), Kansas Fed Composite Index (January), Building Permits (December), Chicago Fed National Activity Index (December)

·       Canada CFIB Business Barometer (January), Average Weekly Earnings (November), Wholesale Sales (December)

·       Brazil Current Account (December), FDI (December)

·       Mexico Unemployment (December)

·       Argentina Consumer Confidence (January)

Asia

Political/Social Events –

·       Australia celebrates Australia Day, marking the day the first European settlement was established in 1788.  It is a national holiday.

·       India celebrates India Republic Day, a national holiday, marking the date the Indian Constitution was finalized in 1947.

Economic Reports/Events –

·       Bank of Japan Summary of Opinions

·       India M3 Money Supply (January)

·       South Korea Consumer Confidence (January), GDP (Q4)

·       Singapore Industrial Production (December)

·       Philippines GDP (Q4), Exports/Imports/Balance of Trade (December), Industrial Production (December)

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

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       UK Car Production (December), CBI Distributive Trades (January)

·       Spain Unemployment (Q4)

·       Italy Consumer Confidence (January), Business Confidence (January)

Middle East

Political/Social Events –

·       Egyptian President Abdel Fattah al-Sisi will attend Republic Day in New Delhi as a special guest of Indian Prime Minister Narendra Modi.

·       Turkey's opposition alliance will discuss potential presidential candidates to run in the June general election.

Economic Reports/Events –

·       Turkey MPC Meeting Summary, Inflation Report, FX Reserves (January)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Arica Central Bank Interest Rate Decision, Prime Overdraft Rate, PPI (December)

·       Zambia inflation, trade data

Friday, January 27, 2023:

Global

·       Today is the International Day of Commemoration in Memory of the Victims of the Holocaust.  

·       The UN Security Council is scheduled to hold a meeting followed by consultations on the United Nations Multidimensional Integrated Stabilization Mission in Mali (MINUSMA).

·       The World Health Organization (WHO) will determine whether or not to continue classifying COVID-19 as a global emergency.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       US Personal Income (December), PCE Price Index (December), Michigan Consumer Sentiment (January), Michigan Inflation Expectations (January), Michigan 5 Year Inflation Expectations (January), Michigan Consumer Expectations (January), Michigan Current Conditions (January), Pending Home Sales (December),

·       Canada Budget Balance

·       Brazil Bank Lending (December), Net Payrolls (December)

·       Mexico Balance of Trade (December)

·       Argentina Consumer Confidence (January)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       China is expected to release preliminary data on consumption trends during the seven-day Lunar New year holidays.

·       Japan Tokyo CPIs (January)

·       South Korea Business Confidence (January)

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

·       Singapore Import Prices (December), Export Prices (December), PPI (December)

·       Australia PPI (Q4), Export Prices (Q4), Import Prices (Q4)

Europe

Political/Social Events –

·       Russian President Vladimir Putin will visit St. Petersburg to mark the 80th anniversary of the end of the blockade of Leningrad.

·       The European Banking Authority launches an EU-wide stress test for banks.

Economic Reports/Events –

·       Eurozone Loans to Households (December), Loans to Companies (December), M3 Money Supply (December)

·       Germany Import Prices/Export Prices (December)

·       France Consumer Confidence (January)

·       Italy Industrial Sales (November)

·       Spain GDP (Q4)

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 –

·       Eswatini interest-rate decision

Saturday, January 28, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Former President Donald Trump is expected to make his first public campaign event since announcing his intention to run for President again.  The event will be held in South Carolina, where two prominent Republicans, former Governor Nikki Haley and incumbent US Senator Tim Scott, are considering a run for the Republican nomination, too.

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 –

·       Armenia celebrates Army Day, a national holiday.

·       The Czech Republic holds the second round of the presidential elections.

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.

Sunday, January 29, 2023:

Global

·       Nothing significant to report.

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 –

·       Vietnam CPI (January), Industrial Output (January), Exports/Imports/Balance of Trade (January)

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

We hope you find this useful.  If you or a colleague want to be added to our distribution list, please send us an email.  Thank you.

Recommended Weekend Reads: January 20-22, 2023

We thought you might find the following useful reading. Let us know what you think and if you or a colleague want to be added to our distribution list. Have a great weekend.

·       “The First Battle of the Next War: Wargaming a Chinese Invasion of Taiwan”  Center for Strategic and International Studies 

China’s leaders have become increasingly strident about unifying Taiwan with the People’s Republic of China (PRC). Senior U.S. officials and civilian experts have expressed concern about Chinese intentions and possible conflict. CSIS conducted an extensive wargame of what a Chinese invasion would look like and its possible outcomes. The surprising result: It would not go that well for China.

·       “The New Bankers to the World Aren’t on Wall Street”  Bloomberg

Middle East sovereign funds spent almost $89 billion globally last year – double the previous year – with deal makers using their wealth to diversify their economies and win geopolitical influence.  $51.6 billion of that amount went into Europe and North America.

·       “Is the U.S. Inflation Reduction Act Hurting the German Economy? An Objection to Exaggerated Claims”  Atlantik-Brücke

Following the U.S. Congress’s passage of the Inflation Reduction Act (IRA) last year, the E.U. strongly objected to the new law, claiming it is highly protectionist and will significantly harm Europe’s industrial sector. These protests were perhaps the loudest in Germany. In this study conducted by the influential German Economic Institute (I.W.) and published by the Berlin-based think tank Atlantik-Brücke, the reality is that “On closer inspection… the criticism and scandalization appear to be both self-righteous and exaggerated.”

·       “Rebuilding U.S. Inventories: Six Critical Systems” Center for Strategic and International Studies

As the United States transfers massive amounts of weapons, munitions, and supplies to Ukraine, questions arise about the health of U.S. inventories – increasingly from the new Congress. Are inventories getting too low? How long will it take to rebuild those inventories?  An earlier CSIS commentary identified those inventories that are most at risk. This new assessment continues that analysis by examining inventory replacement times. Most inventories, though not all, will take many years to replace. For most items, there are workarounds, but there may be a crisis brewing over artillery ammunition. 

Chart of the Week:

This week, we were reading a fascinating piece in The Washington Post entitled “the oldest (and youngest) states and the shrinking number of teenagers with licenses.”  For our chart of the week, we found this excellent map in the piece detailing which states are the oldest and which are the youngest. It was not what we expected – to our surprise, Maine is easily the oldest state in the Union, with an average age of 47. Why? Mainers tend to stay in Maine, and now the state is gaining a fair share of retirees. (Arizona remains the top state for retirees, but that number is starting to shrink.).

The Global Week Ahead: January 15- 22, 2023

It will be quite a busy week worldwide, both politically and economically. The World Economic Forum kicks off on Monday in Davos, Switzerland, with political and business leaders converging on the little Swiss village in the Alps for a packed agenda of meetings. There, we can expect significant addresses to be given by German Chancellor Olaf Scholz, ECB President Christine Lagarde (twice), and other top leaders on pressing issues of the day.  

As the Ukraine War grinds on, Ukrainian military leaders will be warily watching as Russia begins joint air force exercises in Belarus scheduled until February 1st.  Many observers worry Belarus is being increasingly pressured by Moscow to join Russia in the war on Ukraine.

This will occur as the UK, Poland, and perhaps Germany will announce decisions this week on whether they will begin supplying Ukraine with tanks which would be a significant step up in military support for Ukrainian forces.   Meanwhile, Russia will seek to acquire new means of ramping up the carnage they are inflicting on Ukraine as Russian Foreign Minister Sergey Lavrov will host Iranian Foreign Minister Hossein Amir-Abdollahian in Moscow.  They are expected to discuss Iran supplying advanced ballistic missiles to Russia.

On the economic front this week, markets are watching the Bank of Japan as it meets to discuss a possible rate increase (consensus believes they will not raise rates).  Elsewhere, markets are watching as China and US report important economic data points, including China’s Q4 GDP. On top of this, it’s the heart of earnings season as numerous corporations report Q4 numbers.

There will also be a fair amount of central bank speeches this week in Europe (including the aforementioned Lagarde duel speaking events in Davos) and the US, although it is a shortened work-week (Monday being Martin Luther King Day, a federal holiday).

Here is everything we are watching in the coming week:

Sunday, January 15, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Peru GDP (November), Unemployment (December)

Asia

Political/Social Events –

·       China is sending a high-level delegation to Sri Lanka through January 18th to discuss economic assistance to the country

Economic Reports/Events –

·       China House Price Index (December)

Europe

Political/Social Events –

·       Russia and Belarus will hold joint air force exercises in Belarus. The exercises will run through February 1st.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia Inflation Rate (December), Wholesale Prices (December)

·       Israel Inflation (December)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Monday, January 16, 2023:  

Global

·       The World Economic Forum begins in Davos, Switzerland, and runs through January 20th.  You can view the program agenda here.

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

·       The International Conference on Air Pollution and Climate Change begins in Muscat, Oman. This conference will present cutting-edge knowledge about air pollution and climate change, as well as pathways for reducing short-lived climate pollutants in the near term to safeguard human health and mitigate global warming. 

Americas

Political/Social Events –

·       Martin Luther King Day is observed in the United States, a federal holiday.  The US Congress is in recess all week and returns next week.

Economic Reports/Events –

·       Canada Manufacturing Sales (November)

·       Brazil BCB Focus Market Readout

Asia

Political/Social Events –

·       Japan and India will conduct their first joint fighter jet drills through January 26th.  The exercise – called “Veer Guardian 2023” was arranged at the September 2022 India-Japan “2+2” dialogue between the respective defense ministers and foreign ministers.  It is seen as part of growing mutual defense efforts by the two countries in the face of China’s growing regional military capabilities.

·       Bangladesh is bracing for nationwide anti-government strikes led by the opposition Nationalist Party.  The Nationalist Party is demanding that the government respond to 10 demands they have made, including the resignation of Prime Minister Sheikh Hasina.

Economic Reports/Events –

·       China House Price Index (December)

·       Japan PPI (December), Machine Tool Orders (December)

·       India WPI Inflation (December), WPI Food (December), WPI Fuel (December) WPI Manufacturing (December), Passenger Vehicle Sales (December)

·       Australia TD-MI Inflation Gauge (December), Building Permits (November), Private House Approvals (November)

·       Indonesia Exports/Imports/Balance of Trade (December)

Europe

Political/Social Events –

·       The UK is expected to announce its decision to transfer Challenger 2 tanks to Ukraine.

·       EU President Ursula der Leyen meets with French President Emmanuel Macron in Paris.

·       EU Eurogroup meets in Brussels to get an update of Croatia’s recent changeover to the Euro, fiscal policy coordination in the Euro area, and other issues.  ECB President Christine Lagarde and ECB Board Member Fabio Panetta will participate.

·       The EU Parliament holds a plenary in Strasbourg through January 19th.

·       A European delegation will finish arriving in Lebanon to investigate claims of corruption against the country's central bank head, Riad Salameh.

·       The UK Parliament returns to session.

·       The UK High Court hears new arguments on the UK policy of sending asylum-seekers back to Rwanda.

·       Kazakhstan celebrates Independence Day, commemorating when Kazakhstan became independent of the Soviet Union in 1991.

·       Berlin Fashion Week starts and goes through January 21st.  

Economic Reports/Events –

·       ECB President Christine Lagarde and ECB Board Member Fabio Panetta participate in the Eurogroup meeting in Brussels.

·       Bank of England Governor Andrew Bailey will testify at the UK Parliament’s Treasury Select Committee hearing on the December Financial Stability Report.

·       Germany Wholesale Prices (December)

·       France Budget Balance

·       Poland Inflation (December)

·       Hungary Construction Output (November)

Middle East

Political/Social Events –

·       South Korea’s President Yoon Suk Yeol will lead a business delegation of more than 100 companies to visit the United Arab Emirates.  Yoon will also attend the 2023 World Future Energy Summit being held in Abu Dhabi.

·       Bahrain celebrates National Day, celebrating independence from Great Britain in 1971.

Economic Reports/Events –

·       Turkey Budget Balance

·       Israel Unemployment (December), GDP (Q3), M1 Money Supply (December)

·       Qatar Inflation (December)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Tuesday, January 17, 2023:

Global

·       The UN Security Council is scheduled to hold consultations on the United Nations Peacekeeping Force in Cyprus (UNFICYP). 

·       At the World Economic Forum’s Annual Meeting in Davos, Switzerland, the United Nations-convened Net-Zero Insurance Alliance (NZIA) will launch the Alliance’s first Target-Setting Protocol. The Protocol builds on the launch of the first-ever global accounting standard to measure greenhouse gas emissions associated with insurance underwriting portfolios (“insurance-associated emissions”) developed by the Partnership for Carbon Accounting Financials (PCAF) in collaboration with the NZIA.      

Americas

Political/Social Events –

·       US President Biden will meet with Dutch Prime Minister Mark Rutte in Washington, DC. One of the key issues they will discuss is restricting critical technology exports to China.

·       US Treasury Secretary Janet Yellen will begin a visit to Senegal, Zambia (on the 23rd),  and South Africa (on the 25th).  Her visit, which is scheduled to conclude on January 28th,  is a follow-up to the US-Africa Leaders’ Summit held in Washington last month.  It is also seen as growing efforts by the Administration to blunt China’s growing influence in Africa.

·       The US Office of the US Trade Representative has set today as the deadline for companies and other interested parties to submit comments as part of the USTR’s statutory four-year review of the tariffs that former President Donald Trump imposed on more than $300 billion worth of Chinese goods.

·       Acting US Comptroller of the Currency Michael Hsu will give a keynote speech at the Brookings Institution in Washington DC entitled “Too Big to Manage?” on addressing the question of financial institutions becoming too big and how regulators can move to deal with the risk.

Economic Reports/Events –

·       US NY Empire State Manufacturing Index (January)

·       Canada Housing Starts (December), Inflation (December), CPI (December)

·       Colombia Industrial Production (November) Retail Sales (November)

Asia

Political/Social Events –

·       North Koreas Supreme People’s Assembly standing committee will meet to discuss the state of the country’s economy.

·       China may publish population data (to be confirmed).

Economic Reports/Events –

·       China GDP (Q4), Industrial Capacity Utilization (Q4), Industrial Production (December), Retail Sales (December), Unemployment Rate (December)

·       Japan Tertiary Industry Index (November)

·       Indonesia Retail Sales (November), Car Sales (December), Motorbike Sales (December)

·       Australia Westpac Consumer Confidence (January) Westpac Leading Index (December)

·       Singapore Non-Oil Exports (December), Balance of Trade (December)

·       New Zealand NZIER Business Confidence (Q4), NZIER Capacity Utilization (Q4), Electronic Retail Card Spending (December)

·       Sri Lanka Manufacturing PMI (December) Services PMI (December)

Europe

Political/Social Events –

·       Russian Foreign Minister Sergey Lavrov will host Iranian Foreign Minister Hossein Amir-Abdollahian in Moscow.  They are expected to discuss additional Iranian military aid to Russia, including possibly providing ballistic missiles to Russia to assist in their war on Ukraine.

·       EU President Ursula von der Leyen delivers a special address at the World Economic Forum in Davos, Switzerland.

·       EU Economic and Financial Affairs Council (ECONFIN)meets in Brussels to get an update on the economic and financial impact of the Ukraine War, adopt an amendment to the recovery and resilience plan of Luxembourg, and approve the conclusions of the alert mechanism report of 2023 and the annual sustainable growth survey 2023.  ECB Board Member Luis de Guindos will participate.

·       It is the beginning of Men’s Fashion Week in Paris. Good time to watch “Zoolander” again.

Economic Reports/Events –

·       ECB Board Member Edouard Fernandez-Bollo participates in roundtable via webinar organized by the Centre des Professions Financières (CPF) and the Institut français de l’audit et du contrôle internes (IFACI) 

·       Eurozone ZEW Economic Sentiment (January)

·       Germany Inflation Rate (December), CPI (December), ZEW Economic Sentiment (January), ZEW Current Conditions (January)

·       UK Claimant Count Change (December), Employment Change (October), Unemployment Rate (November), HMRC Payroll Changes (December)

·       Italy Inflation (December)

·       Russia Current Account (Q4)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Turkey Auto Production (December)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Gold Production (November), Mining Production (November)

·       Nigeria Food Inflation (December)

Wednesday, January 18, 2023: 

Global

·       The International Energy Agency releases its January 2023 oil market report.

·       The UN Security Council is scheduled to hold an open debate on “the situation in the Middle East, including the Palestinian question”.

·       The United Nations Educational, Scientific and Cultural Organization (UNESCO) is organizing a mission to Poland and Ukraine, which will take place from January 18 to 23. The program includes a UNESCO training program in Warsaw for law enforcement officials from countries bordering Ukraine to fight illicit trafficking in cultural property.

Americas

Political/Social Events –

·       Turkish Foreign Minister Mevlut Cavusoglu will meet with U.S. Secretary of State Antony Blinken as the United States prepares to sell Turkey F-16 fighter jets.

Economic Reports/Events –

·       St. Louis Fed President James Bullard sits for a webcast interview with the Wall Street Journal.

·       Dallas Fed President Lorie Logan will speak at the University of Texas School of Business in Austin, Texas.

·       US PPIs (December), Retail Sales Figures (December), Redbook (January), Industrial Production (December), Manufacturing Production (December), Capacity Utilization (December), Business Inventories (November), Retail Inventories (November), NAHB Housing Market Index (January), MBA Mortgage Index Figures (January),

·       Canada PPI (December), Raw Materials (December)

·       Colombia ISE Economic Activity (November)

Asia

Political/Social Events –

·       A Russian delegation led by Minister of Energy Nikolai Shulginov will meet Pakistan's delegation for the 8th session of their intergovernmental commission in Islamabad, Pakistan.

Economic Reports/Events –

·       Japan BoJ Interest Rate Decision, BoJ Quarterly Outlook Report, Capacity Utilization (November), Industrial Production (November), Reuters Tankan Index (January), Machinery Orders (November)

·       Taiwan Unemployment Rate (December)

Europe

Political/Social Events –

·       NATO’s highest military authority, the Military Committee, will meet in Brussels.  The attendees are the Allied Chief of Defense (including, for the first time, representatives of Sweden and Finland).  The agenda covers a number of issues ranging from the Russian War on Ukraine and ongoing NATO strategic issues, including the implementation of the Concept for the Deterrence and Defense of the Euro-Atlantic.

·       German Chancellor Olaf Scholz gives a “special address” at the World Economic Forum entitled “Cooperation in a Fragmented World.”

·       The European Parliament will elect a new Vice President following the scandal and removal of former EP Vice President Eva Kaili.  Kaili, now under arrest along with three other suspects, is at the center of the ongoing “Qatargate” scandal.  They have been accused of accepting bribes from Qatar and Morocco.

·       EU President participates in the European Parliament plenary debate on the conclusions of the European Council meeting of December 15, 2022, in Strasbourg, France.

·       In the UK, the Royal College of Nursing begins a 48-hour strike.

·       In the UK, the Unison union members at the UK Environment Agency will conduct a one-day strike over pay issues.

Economic Reports/Events –

·       ECB Board Member Isabel Schnabel will participate in a meeting with the finance committee of the German Bundestag in Berlin.

·       Eurozone Inflation Rate (December), CPI (December), Labor Productivity (Q3), Construction Output (November), New Car Registrations (December)

·       Germany New Car Registrations (December

·       UK Inflation (December)k PPI (December), new Car Registrations (December), Retail Sales (December), Labor Productivity (Q3)

·       France New Car Registrations (December)

·       Italy Balance of Trade (November), New Car Registrations (December),

·       Poland New Car Registrations (December)

·       Hungary new Car Registrations (December)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Oman Total Credit (November), M2 Money Supply (November)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Inflation Rate (December), Retail Sales (November)

Thursday, January 19, 2023: 

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       The US Conference of Mayors holds its 91st Winter meeting in Washington, D.C.  US Secretary of State Antony Blinken will give remarks in the morning.

Economic Reports/Events –

·       US Federal Reserve Vice Chair Lael Brainard gives an economic outlook at the University of Chicago Booth School of Business.

·       Federal Reserve Bank of New York President & CEO John Williams speaks at the Fixed Income Analysts Society Conference in New York.

·       Boston Fed President Susan Collins will give opening remarks at the Boston Fed’s “Housing, Place, and Flexible Work: The Future of the New England Economy” conference in Boston.

·       US Jobless Claims (January 14), Philadelphia Fed Manufacturing Index (January), Philadelphia Fed Business Conditions (January), Philadelphia Fed CAPEX Index (January), Philadelphia Fed Employment (January), Philadelphia Fed New Orders (January), Building Permits (December), Housing Starts (December)

·       Canada Wholesale Sales (November), New Motor Vehicle Sales (November)

·       Brazil Unemployment Rate (November)

·       Colombia Imports/Balance of Trade (November)

·       Argentina Balance of Trade (December)

Asia

Political/Social Events –

·       Malaysia's Federal Court will hear jailed former Prime Minister Najib Razak's judicial review application challenging his August 2022 conviction.

·       Thailand will officially open the Bang Sue Grand Station, Southeast Asia’s most modern rail terminal.  It will be a key city transport hub, being the center of all 52 rail routes with connections to Thailand’s three main airports.  Going forward, it will also be a future rail line linking Kunming in China with Singapore.

·       Japan’s Aichi Prefecture officially starts campaigning for the gubernatorial seat.

·       Japan’s  Naoki Literary Award recipients to be selected. The Awards go to the best-emerging fiction writers.

Economic Reports/Events –

·       Japan Exports/Imports/Balance of Trade (December)

·       Hong Kong Unemployment Rate (December)

·       New Zealand Food Inflation (December)

·       Australia Consumer Inflation Expectations (January), Employment Figures (December)

·       Indonesia Central Bank Interest Rate Decision, Lending Facility Rate (January), Deposit Facility Rate (January), Loan Growth (December)

Europe

Political/Social Events –

·       Russian Foreign Minister Sergey Lavrov will visit Minsk, Belarus, for a joint collegium of the Russian and Belarusian foreign ministries. 

·       France is bracing for nationwide strikes by the country’s eight main labor unions over President Emmanuel Macron’s new pension reform proposal.

·       Today is the deadline to restore power-sharing in Northern Ireland after the Westminster government gave a six-week extension.

·       EU President Ursula von der Leyen meets with Portugal’s Prime Minister António Costa in Brussels.

·       ECB President Christine Lagarde participates in a panel discussion entitled "Finding Europe's New Growth" at the World Economic Forum in Davos 

Economic Reports/Events –

·       ECB Board Member Isabel Schnabel participates in a moderated webinar "Geldpolitik in Zeiten von Pandemie und Krieg" (Monetary policy in times of pandemic and war) hosted by Finanzwende e.V. 

·       Eurozone Current Account (November)

·       The German Bundesbank presents its 2022 Financial Stability Review.

·       Italy Current Account (November)

·       Spain Balance of Trade (November)

·       UK RICS House Price Balance (December)

·       Switzerland Producer & Import Prices (December)

Middle East

Political/Social Events –

·       U.S. Secretary of State Antony Blinken will visit Israel.

Economic Reports/Events –

·       Israel Inflation Expectations (December)

·       Turkey TCMB Interest Rate Decision, Overnight Lending Rate (January), Overnight Borrowing Rate (January), FX Reserves (January)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Building Permits (November)

·       Ghana PPI (December) 

Friday, January 20, 2023: 

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       US Federal Reserve Board Governor Christopher J. Waller gives a speech at the Council on Foreign Relations in New York.

·       US Existing Home Sales (December)

·       Canada Retail Sales (November)

·       Mexico Retail Sales (November)

·       Argentina Leading Indicator (December)

·       El Salvador Balance of Trade (December)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea PPI (December)

·       India FX Reserves (January 13)

·       Taiwan Export Orders (December)

·       Hong Kong Business Confidence (Q1), Inflation Figures (December)

·       New Zealand Business NZ PMI (December), Visitor Arrivals (November)

·       Pakistan Balance of Trade (December)

Europe

Political/Social Events –

·       The Ukraine Defense Contact Group will meet at the U.S. Ramstein Air Base in Germany, where a breakthrough is expected on supplying Western main battle tanks to Ukraine.

·       EU President Ursula von der Leyen receives the Members of the Committee of the Permanent Representatives of the Member States to the European Union (COREPER) for a working lunch in Brussels.

Economic Reports/Events –

·       ECB President Christine Lagarde participates in a panel discussion entitled "Global Economic Outlook: Is this the End of an Era?" at the World Economic Forum in Davos 

·       ECB Board Member Frank Elderson gives introductory remarks virtually at the European Financial Services Roundtable.

·       Germany PPI (December)

·       UK Retail Sales (December)

·       Italy Construction Output (November),

·       Poland Employment Figures (December)

Middle East

Political/Social Events –

·       Tunisia holds parliamentary run-off elections.

Economic Reports/Events –

·       Turkey Central Government Debt (December)

·       Israel Manufacturing PMI (December)

Africa:

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report. 

Saturday, January 21, 2023:

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

Lunar New Year is observed across East Asia.  Markets are closed in China and elsewhere in Asia.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Slovakia holds a constitutional referendum.

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. 

Sunday, January 22, 2023: 

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       China celebrates the beginning of the Year of the Rabbit.

·       Japan’s Yamanashi Prefecture holds gubernatorial elections.

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.

Please let us know if you or someone you know would like to be added to our distribution list.

Recommended Weekend Reads: January 14-15, 2023

We thought you might find the following useful reading.  Let us know what you think and if you or a colleague want to be added to our distribution list.  Have a great weekend.

·       “Russia’s Rebound – How Moscow has Partly Recovered From Its Military Setbacks” by Barry Rosen, Foreign Affairs

Russian strategic decisions are finally starting to make military sense. The partial mobilization of reservists that Russian President Vladimir Putin ordered in September has strengthened Russian forces at the front. 

·       “A Journey Along Montenegro’s $1 Billion Chinese-Built Highway”  Radio-Free Europe/Radio Liberty

RFE/RL offers a brilliant photo essay of a massive new highway the Chinese recently built, starting at the Serbian/Montenegrin border and going straight to the Adriatic Sea.   Coming in as one of the most expensive highways in the world, it slices through more than 30 massive mountains, cutting travel across the country from hours to 25 minutes.  Sixty percent of the highway is either tunnels or bridges.

·       “The New Industrial Age” by Representative Ro Khanna (D-CA), Foreign Affairs

As federal funds from the CHIPS Act and other major pieces of legislation passed by Congress last year are being dispersed to encourage semiconductor companies and other critical tech industries to “re-shore” to the US, Congressman Khanna argues that new economic patriotism calls for a globalization rooted in the interests of ordinary Americans while rebalancing trade through domestic production will help lessen tensions with China.

·       “The Looming Financial Contagion” by Kenneth Rogoff, Project Syndicate

The noted professor of economics and public policy argues with inflation on the rise and the era of ultra-low interest rates over, financial markets will face a considerable stress test in 2023. While banking systems are more robust than in 2008, a real-estate slump could severely affect heavily leveraged private-equity firms, producing a systemic crisis.

·       “What Does China’s Arctic Presence Mean to the United States?” The Rand Corporation

For years, China has worked to establish footholds in the region that would give it access to rich mineral deposits and shipping lanes and a greater say in Arctic affairs. That—and a strategic presence in a region ringed by the United States and several other NATO countries. Researchers at RAND and the Swedish Defence Research Agency looked at where China operates in the Arctic, what it wants, and what that could mean for regional security.

Charts of the Week 

This week, we found two charts of particular interest. 

The first shows where everyone moved in the “Great Migration of 2021-2022.”   Most of us have heard about the big moves to Texas and Florida but what was particularly interesting was the almost equal (percentage-wise) population increases in South Dakota, Montana,

The second chart is an early sneak-peak at the most vulnerable Senate Democrats facing likely tough re-elections in 2024.  Of the 33 Senators up for re-election in 2024, 24 of them are Democrats – and several of them are from “Red” to “Very Red States” – Ohio, West Virginia, and Montana stands out as the Reddest. 

Morning Consult shows some surprising numbers to the upside for Senators Jon Tester (Montana) and Sherrod Brown (Ohio) and dismal numbers for Senators Joe Manchin (West Virginia) and recently turned Democrat to Independent Kyrsten Sinema (Arizona).  Democratic leaders have quietly been worried Tester, and Manchin might retire rather than go through a grueling re-elect.  It is still a long road until the 2024 elections, but these are likely to be the most closely watched races going forward.