Recommended Weekend Reads

May 19 -21, 2023

Here are our recommended reads from reports and articles we read in the last week. We hope you find these useful and have a great weekend.   And let us know if you or someone you know wants to be added to our distribution list.

·       “On the Night Watch: At Sea, On the Hunt for Russia’s Pipeline Saboteurs” Politico EU

Against a backdrop of growing confrontation with Moscow over its brutal invasion of Ukraine and its willingness to use energy as a weapon, the vulnerability of the undersea pipes and cables that deliver gas, electricity, and data to the Continent — the vital arteries of comfortable, modern European life — has been starkly exposed. In response, Norway, alongside NATO allies, increased naval patrols in the North Sea — an area vital for Europe’s energy security. The presence of the Bergen, day and night, in these unforgiving waters, is part of the effort to remain vigilant. The task of the men and women on board is to keep watch on behalf of Europe — and to stop the next Nord Stream attack before it happens. 

·       “How to ‘Friendshore” American Enterprise Institute

Friendshoring” is increasingly being discussed in Washington and elsewhere as a critical component of economic national security policy.  What is it? At its core, it is the relocation of manufacturing, supply chains, or both away from China and other geopolitically risky countries to friendlier ones. But there are a number of critical policy issues that have to be addressed to make friendshoring happen.  This paper examines what they are and how they can be achieved.

·       “The Future of European-Chinese Raw Material Supply Chains”  Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs)

When it comes to being supplied with raw materials, Europe faces a number of challenges. These include the diversification of European supply chains, the implementation of effective sustainability standards, and the reduction of strategic dependencies on China. What will European-Chinese raw material supply chains look like in 2030? This paper outlines three possible scenarios.

·       “A BRICS Revival?” Ana Palacio, Project Syndicate

The former Spanish Foreign Affairs Minister and Senior Vice President of the World Bank takes a look at the BRICS’ and where it is going global diplomatic and financial force – especially now as 19 countries, including Saudi Arabia, Argentina, and Iran, have formally asked to join.  The next BRICS meeting is on June 2-3, 2023, in South Africa.

·       “Why America is Struggling to Stop the Fentanyl Epidemic: the New Geopolitics of Synthetic Opioids”  Foreign Affairs

The United States is suffering from the deadliest drug epidemic in its history. Overdoses claimed the lives of more than 100,000 Americans between August 2021 and August 2022 alone. Over the span of just a few years, drug deaths have doubled. Most of these overdoses involve fentanyl, which now kills around 200 Americans every day. Less talked about, but just as consequential, are the geopolitical obstacles that make it so hard for the U.S. government to plug the supply channels. 

·       “A Conversation with Henry Kissinger: The Transcript of his Meeting with The Economist Journalists”  The Economist

Over two days in late April 2023, The Economist spent over eight hours in conversation with Dr. Kissinger. Just weeks before his 100th birthday, the former secretary of state and national security adviser laid out his concerns about the risks of great power conflict and offered solutions for how to avoid it. This is a transcript of the conversation, lightly edited for clarity.

Chart of the Week 

Almost Half in the U.S. Worry About Their Money’s Safety in Banks; Majority of Republicans Worry the Most

Gallup reports that nearly half of Americans are worried about the money they have in bank accounts or other financial institutions.  A total of 48 percent of U.S. adults say they are concerned about their money, including 19 percent who are “very” and 29 percent who are “moderately” worried.

Interestingly, Republicans worry most about the safety of their money – 55 percent – closely followed by Independents at 51 percent.  These partisan levels of worry have grown considerably since the 2008 financial crisis.

The Global Week Ahead

May 14 - 21, 2023

The standoff between Congressional Republicans and President Biden over the debt ceiling will continue to dominate the attention of both the US political world and the global markets attention this week.  But there are plenty of other significant geopolitical and economic events happening this week that markets should pay close attention to this week.

The G-7 Leaders Conference takes place next weekend in Hiroshima, Japan.   India and South Korea have been invited to attend, too.  President Biden may not be able to participate in person if a deal on the debt ceiling is not reached by then.  From Japan, President Biden is set to become the first US President to visit Papua New Guinea.  The significance of this visit is that while there, Biden will sign a bilateral defense pact with Papua New Guinea – something China had been working hard to achieve with the island for strategic reasons but failed.  Biden will then go to Australia next week for the AUKUS meetings (with the Prime Ministers of Australia, Great Britain, and Japan) to discuss further mutual security arrangements in the Indo-Pacific.

While all this is happening, China is dispatching a high-level special envoy to Ukraine, Russia, Poland, France, and Germany to try and advance their formula for reaching a diplomatic solution to Russia's war on Ukraine.   Also, this week, the Black Sea Grain Initiative expires on May 18th.  As of this writing Sunday evening, there are unconfirmed reports Russia has agreed to further extend the deal for another 60 days, allowing critically needed grains, cereals, and fertilizers to be exported from both Ukraine and Russia to markets in Africa, the Middle East, and Asia.  Moscow has been demanding some sanctions be lifted by Western nations, or they would terminate the deal, making Ukrainian grain shipments military targets.

On the global economic radar screen this week, on the back of the G-7 Finance Minister and Central Banker meetings this weekend in Japan, we note there seems to be a lot of financial regulators and central bankers either testifying in front of the US Congress, EU Parliament, and UK Parliament or giving speeches someplace – much more than usual.  The most notable of these we believe will be the semiannual testimony on the state of bank regulation by Federal Reserve Board Vice Chair for Supervision Michael S. Barr, Federal Deposit Insurance Corporation Chair Marty Gruenberg, and Acting Comptroller of the Currency Michael Hsu before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.  The three regulators will surely face tough questioning on the state of banking in the US in the wake of the failures at Silicon Valley Bank and Signature (we also would note the former CEOs of SVB and Signature Bank will be testifying before the Senate Banking Committee on Tuesday).  Additionally, the Atlanta Federal Reserve Bank holds its 2023 Financial Markets Conference where several Fed Governors, regional Fed Presidents, and SEC Chair Gary Gensler are set to speak. In Brussels, ECB President Christine Lagarde participates in a Eurogroup meeting Tuesday while there is an ECOFIN (EU Economic and Financial Affairs Council) meeting Wednesday to discuss bank and financial market stability while Bank of England Governor Andrew Bailey gives a major speech before the UK Chamber of Commerce and then later testifies before the UK Parliament.

In terms of major economic data this week, markets will be watching US retail, manufacturing, and housing data for further evidence of an economic slowdown.  In China, markets will look at several important economic reports - retail sales, and industrial production numbers, among them --  to bolster hopes that the country is truly bouncing back post-COVID.  Japan reports GDP for the first quarter, the UK reports GDP forecasts, and Canada offers inflation figures.

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

Sunday, May 14, 2023:

Global

·       NSTR

Americas

Political/Social Events –

·       It is Mother’s Day in the US and Canada. 

·       Today is Paraguay Independence Day.

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       Cambodia holds general elections.  Early voting began on May 7th. There is a risk of political protests and instability.  500 members of its House of Representatives will be chosen.  But the bigger question is whether the country will continue to be ruled by the military or return to full democracy.  The country's pro-democracy movement, which is led by Thailand's largest political party, Pheu Thai, and the monarchy-skeptic, youth-focused Move Forward Party are facing off against Thailand’s military-royalist establishment, including the incumbent Palang Pracharat Party and upstart Ruam Thai Sang Chart party.

·       India’s Punjab Province holds elections.

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       Bremen state election is held in Germany.

·       Albania holds local elections.

·       Italy holds the first round of municipal elections.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       Turkey will hold presidential elections and parliamentary elections.  Incumbent President Recep Tayyip Erdogan faces the toughest reelection bid of his 22-year years in office against opposition leader Kemal Kilicdaroglu. 

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Monday, May 15, 2023:

Global

·       The UN Security Council will hold a briefing on Ukraine.

Americas

Political/Social Events –

·       US President Joe Biden may meet with Congressional leaders in an effort to reach a deal on the debt ceiling.  Staff of the respective leaders have been meeting, and there is some hope for a breakthrough in the coming week.

·       The Independent Community Bankers of America hold their Capital Summit this week.  On Monday, Consumer Financial Protection Bureau Director Rohit Chopra speaks.

Economic Reports/Events –

·       US Federal Reserve Board Governor Lisa Cook gives the commencement address at the U.C. Berkeley Spring 2023 Economics Commencement in Berkeley, California.

·       Atlanta Federal Reserve Bank President Raphael Bostic will give welcoming remarks before the Federal Reserve Bank of Atlanta’s 2023 Financial Markets Conference. Richmond Federal Reserve Bank President Thomas Barkin will moderate a luncheon keynote at the conference.

·       Minneapolis Federal Reserve Bank President Neel Kashkari participates in a fireside chat before the ACEC Minnesota Transportation Conference & Expo in St. Paul, Minnesota.

·       US NY Empire State Manufacturing Index (May), Net Long-Term Tic Flows (March),

·       Canada Wholesale Sales (March), Housing Starts (April), Financial System Survey

·       Brazil BCB Focus Market Readout

·       Colombia GDP (Q1), ISE Economic Activity (March)

Asia

Political/Social Events –

·       Pakistan will announce new fuel prices.

·       A visiting delegation from the International Monetary Fund will convene a press briefing in Colombo, Sri Lanka, on the country’s progress in turning the economy around after its debt default last year.

·       The APEC Transportation & Trade Ministerial Meetings will be held through May 17th in Detroit, Michigan.

Economic Reports/Events –

·       China People’s Bank of China 1-Year MLF Announcement

·       India Imports/Exports/Balance of Trade (April), Passenger Vehicles Sales (April), WPI Inflation/Food Index/Fuel/Manufacturing Reports

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

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

·       Thailand GDP (Q1)

·       Philippine Cash Remittances (March)

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

Europe

Political/Social Events –

·       Chinese special representative for Eurasian affairs Li Hui will begin travels to Ukraine, Russia, Poland, France, and Germany to explore a diplomatic solution to ending Russia's invasion of Ukraine. 

·       Belarus’ foreign Minister Sergei Aleinik goes to Moscow for meetings through May 17th with Russian Foreign Minister Sergey Lavrov and Chairman of the Federation Council of the Federal Assembly of the Russian Federation Valentina Matviyenko and Chairman of the State Duma Vyacheslav Volodin.

·       EU President Ursula von der Leyen delivers a speech at the Beyond Growth Conference in the European Parliament in Brussels.  Later in the day, she Receives Mr. Subrahmanyam Jaishankar, Minister of External Affairs of India; Mr. Piyush Goyal, Minister of Commerce and Industry of India; and Mr. Rajeev Chandrasekhar, Minister of State for Entrepreneurship, Skill Development, Electronics & Technology.

·       The EU Education, Youth, Culture and Sports Council meets through May 16th in Brussels.

Economic Reports/Events –

·       There will be a Eurogroup meeting in Brussels.  ECB Board Chair Christine Lagarde and ECB Supervisory Board Chair Andrea Enria, and ECB Board Member Fabio Panetta will participate.

·       Eurozone Industrial Production (March)

·       Germany Wholesale Prices (April)

·       Spain Consumer Confidence (April)

·       Hungary Construction Output (March)

·       Serbia Building Permits (March)

·       Ukraine Balance of Trade (March)

Middle East

Political/Social Events –

·       Palestinians will recognize Nakbha Day, which is also known as the “Palestinian Catastrophe”, which may coincide with increased violence in Gaza and the West Bank.

Economic Reports/Events –

·       Turkey Budget Balance (April)

·       Saudi Arabia Wholesale Prices (April), Inflation (April)da

·       Israel Inflation (April), Unemployment (April), Imports/Exports/Balance of Trade (April)

Africa

Political/Social Events –

·      Former Guinean Prime Minister Ibrahima Kassory Fofana will be tried for alleged embezzlement of public funds. The trial was postponed since last year due to his ill health.  He is accused of embezzling more than $4 million.

Economic Reports/Events –

·       Nigeria Inflation/Food Inflation Figures (April)

Tuesday, May 16, 2023:

Global

·       The International Energy Agency (IEA) releases the May 2023 oil market report.

·       The UN Security Council will hold a briefing on peace and security in Africa, followed by consultations.

Americas

Political/Social Events –

·       Canadian Prime Minister Justin Trudeau will visit South Korea and hold a summit with President Yoon Suk Yeol, where they will discuss supply chain issues, trade, and mutual security issues.

·       The US Senate Banking Committee holds a hearing to examine the failures of Silicon Valley Bank and Signature Bank.  Among the witnesses expected to testify are former Signature Bank Chairman Scott A. Shay, former Signature Bank President Eric R. Howell, and former Silicon Valley Bank CEO Gregory W. Becker.

·       US Treasury Secretary Janet Yellen speaks at the Independent Bankers of America Capital Summit in Washington, D.C.

·       The State of Kentucky holds its Republican gubernatorial primary, selecting a candidate to face incumbent Democratic Governor Andy Beshear this fall.

Economic Reports/Events –

·       Federal Reserve Board Vice Chair for Supervision Michael S. Barr, Federal Deposit Insurance Corporation Chair Marty Gruenberg, and Acting Comptroller of the Currency Michael Hsu gives their Semiannual Hearing on Supervision and Regulation before the U.S. House Financial Services Committee.

·       Atlanta Federal Reserve Bank President Raphael Bostic participates in a panel discussion with Chicago Federal Reserve Bank President Austin Goolsbsee, moderated by New York Times Federal Reserve and Economics Reporters Jeanna Smialek, at the Atlanta Fed’s 2023 Financial Markets Conference.  Later in the day, Dallas Federal Reserve Bank President Lorrie Logan will moderate Policy Session 4: Mitigating Risks and Preserving Financial Stability in an Appropriately Restrictive Policy Environment.

·      Cleveland Federal Reserve Bank President Loretta Mester to speak in person before the Global Interdependence Center Central Banking Series in Dublin, Ireland.

·       Federal Reserve Bank of New York President John Williams participates in a conversation organized by the University of the Virgin Islands.

·       US Retail Sales (April), Redbook (May 13th), Industrial Production (April), Capacity Utilization (April), Business Inventories (March), NAHB Housing Market Index (May), Retail Inventories (March)

·       Canada Inflation (April), CPI (April), Manufacturing Sales (March)

·       Colombia Balance of Trade (March), Imports (March)

·       Uruguay Central Bank Interest Rate Decision

·       Peru GDP (March), Unemployment (April)

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       China Industrial Production (April), Retail Sales (April), Unemployment (April), FDI (April)

·       South Korea Export & Import Prices (April)

·       Australia Reserve Bank Meeting Minutes,  Westpac Consumer Confidence Index (May)

Europe

Political/Social Events –

·       The Council of Europe Summit is held in Reykjavik, Iceland to discuss how Russia can pay for the damage they have done to Ukraine.

·       EU President Ursula von der Leyen meeting with the Prime Minister of Iceland, Ms. Katrin Jakobsodottir in Reykjavik, Iceland.  President von der Leyen later participates in the Summit of the Heads of State and Government of the Council of Europe in Reykjavik.

·       French Prime Minister Elisabeth Borne will mee with trade union leaders to discuss pension reform as protests continue across the country over recent reforms enacted by parliament.

Economic Reports/Events –

·       There will be an EU Economic and Financial Affairs Council (ECOFIN) Meeting in Brussels.  EDB Board Vice Chair Luis de Guindos will participate.  Topics for discussion include bank crisis management and a deposit insurance framework, the economic and financial impact of Russia’s war on Ukraine, overall economic recovery in Europe, and outcomes of the April G20 meeting.

·       ECB Board Chair Christine Lagarde will Christine Lagarde give a laudation upon being conferred the State Prize of North Rhine-Westphalia to Angela Merkel in Cologne, Germany.

·       ECB Board Member Anneli Tuominen will give a  speech followed by a conversation with Single Resolution Board Chair, Dominique Laboureix, at the 18th IESE Banking Industry Meeting “Banking Navigating the Wave of Inflation” in Madrid, Spain. 

·       Eurozone GDP 2nd Q Estimate, Balance of Trade (March) Employment (Q1), ZEW Economic Sentiment Index (May)

·       Bank of England Chief Economist Huw Pill takes part in an online Q&A hosted by the central bank on the steps it is taking to control inflation.

·       Germany ZEW Economic Sentiment Index (May), ZEW Current Conditions (May)

·       UK Unemployment (March)

·       Italy Inflation (April), CPI (April)

·       Hungary GDP (Q1)

·       Bulgaria Inflation (April)

Middle East

Political/Social Events –

·       Today is Martyrdom of Iman Saddeq Day, a national holiday in Iran honoring the 8th-century Shia Muslim scholar who was poisoned.

Economic Reports/Events –

·       Israel GDP (Q1), M1 Money Supply (April)

·       Qatar Inflation (April)

·       Turkey Auto Production (April), Auto Sales (April)

Africa

Political/Social Events –

·       Senegalese opposition leader Ousmane Sonko will be tried for rape and making death threats to a beauty salon employee in 2021.

Economic Reports/Events –

·       South Africa Unemployment (Q1)

Wednesday, May 17, 2023:

Global

·       The UN Security Council will hold a briefing on the Middle East (Yemen), followed by consultations.

Americas

Political/Social Events –

·       The Senate Banking Committee’s Subcommittee on Economic Policy will hold a hearing on “Strengthening Accountability at the Federal Reserve: Lessons and Opportunities for Reform.”  The Subcommittee, chaired by fierce Fed critic Senator Elizabeth Warren (D-MA), will hear from Mr. Mark Bialek, Inspector General, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau.  It is expected they will focus on the Fed’s role as a bank regulator and what happened with the recent collapse of Silicon Valley Bank, Signature Bank, and First Republic Bank.

·       The House Select Committee on Strategic Competition between the U.S. and the Chinese Communist Party will hold a hearing on “Leveling the Playing Field: How to Counter the Chinese Communist Party’s Economic Aggression.”  Among those testifying will be Former U.S. Trade Representative Robert Lighthizer, Eric Schmidt , Chairman of the Special Competitive Studies Project, Roger Robinson , Chairman of the Prague Security Studies Institute and former chairman of Congressional U.S.-China Economic and Security Review Commission

Economic Reports/Events –

·       US MBA Mortgage Index (May 12th), Building Permits (April), Housing Starts (April)

·       Canada New Motor Vehicles Sales (March)

·       Brazil Retail Sales (March)

·       Argentina Leading Indicators (May)

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       China House Price Index (April)

·       India M3 Money Supply (May 5th)

·       Japan GDP (Q1), Capacity Utilization (March), Industrial Production ((March)

·       Singapore Non-Oil Exports (April)

·       Australia Westpac Leading Index (April), Westpac Leading Index (April), Wage Price Index (Q1)

·       Singapore Balance of Trade (April)

Europe

Political/Social Events –

·       Former British Prime Minister Liz Truss will travel to Taiwan to meet with lawmakers and senior members of the Taiwanese government – meetings that are expected to upset Beijing and further strain Chinese-UK relations.

Economic Reports/Events –

·       Bank of England Governor Andrew Bailey gives a keynote speech at the British Chamber of Commerce Annual Conference in London.

·       ECB Board Member Frank Elderson will participate in focus panel 18 "Beyond GDP indicators," at Beyond Growth Conference 2023 in Brussels.

·       ECB Board Member Fabio Panetta will give a presentation during an online debate on the digital euro at Kangaroo Group event in Frankfurt, Germany.

·       ECB Board Vice Chair Luis de Guindos will give a closing speech at the 18th IESE Banking Industry Meeting, “Banking Navigating the Wave of Inflation” in Madrid, Spain.  

·       Eurozone Inflation (April), CPI (April), New Car Registrations (April)

·       France Unemployment (Q1)

·       Hungary PPI (April)

·       Serbia Current Account (March)

·       Russia GDP (Q1)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       In Guinea, opposition groups are planning anti-military junta protests over the next week after seven people were killed during protests last week. 

Economic Reports/Events –

·       South Africa Retail Sales (March)

Thursday, May 18, 2023:

Global

·       Russia is threatening to let the Black Sea Grain Initiative (BSGI) expire unless certain demands are met, including the lifting of certain sanctions on Russia, including the removal of sanctions on the Russian Agricultural Bank.  If the BGSI fails to continue, it could create a global food security crisis.

·       The UN Security Council will hold a briefing on the United Nations Assistance Mission for Iraq (UNAMI) followed by consultations.

Americas

Political/Social Events –

·       Politico will host its first-ever Energy Summit on Thursday in Washington, D.C. The event features conversations with Energy Secretary Jennifer Granholm, White House National Climate Adviser Ali Zaidi and Jigar Shah, director of the DOE's Loan Programs Office. 

·       In Argentina, Left-wing groups and unions will protest in central Buenos Aires to demand greater social spending on subsidies for low-income households.

Economic Reports/Events –

·       Federal Reserve Board Vice Chair for Supervision Michael S. Barr, Federal Deposit Insurance Corporation Marty Gruenberg, and Acting Comptroller of the Currency Michael Hsu gives their Semiannual Hearing on Supervision and Regulation before the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

·       Federal Reserve Board Governor and Vice Chair for Monetary Policy nominee Phillip Jefferson gives a speech at the National Association of Insurance Commissioners International Insurance Forum in Washington, DC.

·       US Initial Jobless Claims (May 13th), Philly Fed Manufacturing Index (May), Philly Fed Business Conditions (May), Philly Fed CAPEX Index (May), Philly Fed Employment (May), Philly Fed New Orders (May),  Existing Home Sales (April), CB Leading Index (April)

·       Canada New Housing Price Index (April)

·       Mexico Central Bank Interest Rate Decision

·       Peru Current Account (Q1)

·       Argentina Balance of Trade (April)

·       El Salvador Balance of Trade (April)

Asia

Political/Social Events –

·       Chinese leader Xi Jinping will hold Beijing's first in-person summit with Central Asian leaders in Xi'an.  Known as the C+C5, attendees will include the leaders of Kazakhstan, Tajikistan, Uzbekistan, Kyrgyzstan, and Turkmenistan.  Beijing’s goal for the meeting is to boost strategic cooperation on issues including the Belt & Road Initiative and how to deal with Russia’s War on Ukraine.

Economic Reports/Events –

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

·       Australia Unemployment (April)

·       Philippine Central Bank Interest Rate Decision

·       Hong Kong Unemployment (April)

Europe

Political/Social Events –

·       Northern Ireland holds local elections in 11 councils.

Economic Reports/Events –

·       ECB Board President Christine Lagarde will attend the official celebration of the 175th anniversary of the first German national parliamentary assembly event in Paulskirche in Frankfurt, Germany.

·       ECB Board Member Luis de Guindos will give remarks at a seminar organized by PwC in Madrid, Spain. 

·       Bank of England Governor Andrew Bailey testifies before the Treasury Select Committee of Parliament on the impact of rate tightening on the economy and how he sees the BoE can best deal with inflation.

·       Bank of England Chief Economist Huw Pill opens a BoE research workshop on macroeconomics and finance.

·       UK Gfk Consumer Confidence (May)

·       Spain Balance of Trade (March)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Turkey Financial Stability Report, FX Reserves (May 12th)

·       Egypt Central Bank Interest Rate Decision, Overnight Lending Rate

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       South Africa Building Permits (March) 

Friday, May 19, 2023:

Global

·       G-7 leaders will gather in Hiroshima to discuss global economic, security, and climate issues through May 21st.  In addition to the G-7 countries, South Korea and India have been invited to participate.  President Biden may be forced to attend virtually if the debt ceiling crisis is not resolved beforehand.  UK Prime Minister Rishi Sunak is expected to sign a new bilateral defense and technology agreement with Japan while visiting the country.

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Federal Reserve Board Chair Jerome Powell will join a discussion with former Fed Chair Ben Bernanke on the topic of “Perspectives on Monetary Policy” at the Federal Reserve’s Thomas Laubach Research Conference in Washington, D.C.  Also speaking at the conference later in the day will be Federal Reserve Bank of New York John Williams.

·       US Federal Reserve Board Governor Michelle W. Bowman participates in a discussion at the Texas Bankers Association Annual Convention, San Antonio, Texas.

·       Canada Retail Sales (March)

·       Brazil IBC-BR Economic Activity (March)

·       Mexico Retail Sales (March)

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Japan Inflation (April), Tertiary Industry Index (March)

·       India Deposit Growth (May 5th), FX Reserves (May 12th), Bank Loan Growth (May 5th)

·       Malaysia Imports/Exports/Balance of Trade (April)

·       Taiwan Current Account (Q1)

·       Indonesia Car Sales (April)

Europe

Political/Social Events –

·       Armenian Foreign Minister Ararat Mirzoyan and Azerbaijani Foreign Minister Jeyhun Bayramov will meet in Moscow, Russia, to discuss a peace treaty and the disputed Nagorno-Karabakh region. The meeting will mark the first time that the two foreign ministers will meet after holding four-day talks near Washington last week, hosted by Secretary of State Antony Blinken. In his public comments, Blinken said that progress in normalizing relations between Armenia and Azerbaijan was made, and peace between the countries was “within reach.”

Economic Reports/Events –

·       ECB Board President Christine Lagarde will give a  pre-recorded video at Session 2 "Post-pandemic challenges: High inflation, high indebtedness and financial stability" of Banco Central do Brazil’s High-Level Seminar on Central Banking “Past and present challenges” in São Paulo, Brazil 

·       ECB Board Member Isabel Schnabel will give a speech and participate in a panel at the Conference on Financial Stability and Monetary Policy in honor of Charles Goodhart, followed by the opening of the Charles Goodhart Library, London, UK.

·       Germany PPI (April)

·       Italy Construction Output (March)

·       Slovenia PPI (April)

·       Bulgaria Current Account (March)

Middle East

Political/Social Events –

·       The Arab League Summit will be held in Saudi Arabia.  Syrian President Bashar al-Assad has been invited by Saudi King Salman bin Abdulaziz, the first time Syria has been allowed to participate since being suspended 12 years ago due to al-Assad’s crackdown on his own people.

·       Israeli ultranationalists will hold a controversial "flag march" through Jerusalem's Muslim Quarter in Jerusalem’s Old City.  Hamas issued a statement warning that the Gaza-based group would not let Israel “Judaize” Jerusalem via the Flag March, suggesting violence could ensure.

Economic Reports/Events –

·       Israel Inflation Expectations (May)

Africa:

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Saturday, May 20, 2023:

Global

·       NSTR

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       Today is East Timor Independence Day, marking the day in 1975 when the country gained a short-lived independence from Portugal (it was shortly afterward taken over by Indonesia and only regained its independence in 2002).

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR 

Sunday, May 21, 2023:

Global

·       NSTR

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       President Biden visits Papua New Guinea – the first sitting US President to visit the island - to meet with Prime Minister James Marapae.  While there, he will sign a defense and surveillance agreement with the country, a blow to China who had been trying to woo the island into closer diplomatic and commercial tie and even reportedly asking if they could build a naval base.  While on the island, Biden will meet with other leaders at the Pacific Forum Leaders (through May 22nd).  Biden will remain in Asia for the Quad Leaders Meeting in Australia on May 24th.

·       East Timor holds parliamentary elections.

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       Greece holds elections for 300 seats for the national parliament.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

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

Recommended Weekend Reading

May 12 - 14, 2023

Here are our recommended reads from reports we read in the last week. We hope you find these useful and have a great weekend.   And let us know if you or someone you know wants to be added to our distribution list.

·       “Insulate, Curtail, Compete: Sketching a U.S. Grand Strategy in Latin America and the Caribbean”   Ryan Berg/Center for Strategic and International Studies

This comprehensive report looks at US strategy for Latin America and the Caribbean (LAC) in the face of massive investment and political engagement by China in the region. In sketching the outline of a U.S. grand strategy in Latin America and the Caribbean, this report provides a framework within which to answer critical questions that remain unanswered in U.S. policymaking circles: which level of Chinese engagement the United States should permit versus what it should seek to curtail, as well as the necessarily circumscribed areas where U.S. competition should be resource-backed, well thought out, and creatively messaged. The report offers three categories for thinking through the terms of engagement with China in Latin America and the Caribbean: insulation, curtailment, and competition.

·       “Rinse and Repeat: Iran accelerates its cyber influence operation worldwide” Microsoft on the Issues (Microsoft Blog)

In a recent posting by Microsoft looking at adversarial nation-state cyber activity, the company looks at Iran.  Microsoft has detected these efforts rapidly accelerating since June 2022.  They attributed 24 unique cyber-enabled influence operations to the Iranian government last year – including 17 from June to December – compared to just seven in 2021. Though Iran’s techniques may have changed, its targets have not. These operations remain focused on Israel, prominent Iranian opposition figures and groups, and Tehran’s Gulf state adversaries. More broadly speaking, Iran directed nearly a quarter (23%) of its cyber operations against Israel between October 2022 and March 2023, with the United States, United Arab Emirates, and Saudi Arabia also bearing the brunt of these efforts. You can access the full Microsoft Threat Intelligence Report HERE.

·       “The Untold Story of the Boldest Supply-Chian Hack Ever”  Wired

The attackers were in thousands of corporate and government networks. They might still be there now. When investigators finally cracked it, they were blown away by the hack’s complexity and extreme premeditation. Two years on, however, the picture they’ve assembled—or at least what they’ve shared publicly—is still incomplete. A full accounting of the campaign’s impact on federal systems and what was stolen has never been provided to the public or lawmakers on Capitol Hill. Here is a behind the scenes  look at the SolarWinds investigation.

·       “Pandemic labor force participation and net worth fluctuations” Federal Reserve Bank of St. Louis

In this working paper by the Economic Research team at the St. Louis Fed, they note U.S. labor force participation rate (LFPR) experienced a record drop during the early pandemic. While it has since recovered to 62.2% as of December 2022, it was still 1.41 percent below its pre-pandemic peak. This gap is explained mostly by a permanent decline in the LFPR for workers older than 55. This paper argues that wealth effects driven by the historically high returns in major asset classes such as stocks and housing may have influenced these trends. Combining an estimated model of wealth effects on labor supply with micro data on balance sheet composition, we show that changes in net worth caused by realized returns explain half of the drop in LFPR in the 2020-21 period and over 80% of "excess retirements'' during the same period.

Chart of the Week 

Young adults in the US are less likely than those in most of Europe to live in their parents’ home 

In a Pew Research Center survey released on May 3rd, only one-in-three US adults aged 18 to 34 live in their parent’s home (per U.S. Census Bureau data from 2021). 

In Europe, the numbers are quite different.  According to the survey, more than seven-in-ten adults in that age group live with their parents in the countries of Croatia (77%), Greece (73%), Portugal (72%), Serbia (71%), and Italy (71%).

On the other end of the spectrum, fewer than one-in-five young adults in the Scandinavian countries of Finland (18%), Sweden (17%), and Denmark (16%) live with their parents.

Overall, countries in southern and eastern Europe tend to have higher rates of young adults living in their parents’ homes than countries in northern and western Europe, a difference that may reflect both cultural factors, such as social norms and family ties, and structural factors, such as housing markets and welfare systems.

The Global Week Ahead

May 7-14, 2023

This week, markets will be watching Tuesday's meeting at the White House between President Biden and Congressional leaders for any breakthrough in the growing federal debt ceiling crisis.  The U.S. Treasury reported that the expected "X-Date" – the actual default date – has been moved up to June 1st.  However, according to Moody's, that date might slip a week to as far as June 8th.

This Thursday, G-7 finance ministers, central bankers, the heads of the World Bank and IMF, and the invited finance ministers of India, Indonesia, South Korea, and Singapore, gather in Japan to discuss financial system instability in the U.S. and Europe, debt problems in the developing world, and further support for Ukraine.

Elsewhere around the world this week, on Tuesday, Russia holds its annual Victory Parade marking the defeat of Nazi Germany.  But it is also seen as a venue where Russian President Vladimir Putin could reveal a more significant national mobilization in the War on Ukraine.  On Sunday, Turkey will hold presidential and parliamentary elections.  Polls show the election is very close but leaning against the re-election of President Recep Erdogan – a loss that could see sweeping political and economic changes comes to the country.

On the global economic front, it is a reasonably quiet week for major economic reports.  Markets will be watching the Bank of England's monthly monetary policy committee meeting as the U.K. reports GDP figures.  They are expected to raise rates another quarter-point.  Also, this week, the U.S. reports CPI figures and the Michigan survey.  China and India report inflation figures and the Philippines and Malaysia report GDP.

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

Sunday, May 7, 2023

Global

·       NSTR

Americas

Political/Social Events –

·       US National Security Advisor Jake Sullivan will meet with Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman.  Among the issues they are expected to discuss is “new areas of cooperation between New Delhi and the Gulf as well as the US and the rest of  Sullivan will also meet with senior officials from the UAE and India later in the week.

·       Chile holds its Constitutional Assembly election, choosing new members of the Constitutional Council to draft a new constitution. 

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       Thailand begins early voting for general elections.

·       Taliban interim Foreign Minister Muttaqi is in Pakistan for three-way talks with Foreign Minister Zardari and Chinese Foreign Minister Qin Gang on the crisis in Afghanistan.

·       Japanese Prime Minister Fumio Kishida will visit South Korean President Yoon Suk Yeol in Seoul, South Korea, through May 8.  This is a significant show of strengthening relations between the two nations following a breakthrough agreement several months ago on reparations around forced labor in World War II.

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       Chinese Vice President Han Zheng visits Portugal and the Netherlands after attending King Charles II’s coronation in London.

·       South Korean Prime Minister Han will meet his counterparts in Sweden, Austria, and Romania for discussions on bilateral cooperation, infrastructure, the defense industry, and security in the Korean Peninsula.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       The Arab League will host a meeting in Cairo, Egypt, to discuss further steps for Syria's potential reentry to the league, from which the country was suspended in 2011 because of its civil war.

Economic Reports/Events –

·       Saudi Arabia GDP (Q1)

Africa

Political/Social Events –

·       Benin will hold legislative elections. 

Economic Reports/Events –

·       NSTR

Monday, May 8, 2023 

Global

·       World Trade Organization (WTO) holds its May General Council Meetings today and tomorrow in Geneva, Switzerland.

·       Today is Time of Remembrance and Reconciliation for Those Who Lost Their Lives during the Second World War, 8-9 May.

·       The UN Security Council is scheduled to hold a briefing on Syria (Chemical Weapons), followed by consultations. In the afternoon, the Council will hold consultations on the 1559 report (on the situation in Lebanon)

Americas

Political/Social Events –

·       Mexico's Supreme Court will release a ruling on the constitutionality of the first part of the government's "Plan B" electoral reform.

·       The U.S. Chamber of Commerce holds its 13th annual China Business Conference through May 10th in Washington, DC.  A number of leading Biden Administration officials and members of Congress are scheduled to speak.

Economic Reports/Events –

·       US Wholesale Inventories (March), Consumer Inflation Expectations (April)

·       Brazil Car Production (April), BCB Focus Market Readout

·       Costa Rica Inflation (April)

Asia

Political/Social Events –

·       The Japanese government will officially downgrade COVID-19 to a common infectious disease.

Economic Reports/Events –

·       Japan Bank of Japan Monetary Policy Meeting Minutes, Jibun Bank Services & Composite PMIs (April)

·       Australia NAB Business Confidence (April), Building Permits (March), Private House Approvals (March)

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

·       Indonesia FX Reserves (April)

·       Singapore FX Reserves (April)

·       Philippines Unemployment (March)

Europe

Political/Social Events –

·       Russian President Vladimir Putin will hold talks with Kyrgyz President Sadyr Zhaparov in Moscow.  He will also attend the Russian Victory Parade on Tuesday.

Economic Reports/Events –

·       ECB Board Member Philip R. Lane gives a  keynote speech followed by Q&A at the New Paradigm Workshop - Resetting the Economy after the Crises organized by Forum New Economy in Berlin. 

·       Germany Industrial Production (March)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Turkey Treasury Cash Balance (April)

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

Africa

Political/Social Events –

·       Senegalese opposition leader Ousmane Sonko will appear in court where he faces criminal charges for defaming a former government official.

Economic Reports/Events –

·       South Africa FX reserves (April)

·       Tanzania inflation data (April)

·       Mauritius inflation data (April) 

Tuesday, May 9, 2023

Global

·       The UN Security Council is scheduled to hold a briefing on the United Nations Interim Security Force for Abyei (UNISFA), followed by consultations.

Americas

Political/Social Events –

·       President Biden hosts a meeting with the four leaders of Congress to discuss the looming debt ceiling “X-Date” – now estimated at June 1st.  Speaker of the House Kevin McCarthy (R-CA), House Minority Leader Hakeem Jeffries (D-NY), Senate Majority Leader Chuck Schumer (D-NY) and Senate Minority Mitch McConnell (R-KY) will discuss possible solutions to avoid a default on the national debt.

Economic Reports/Events –

·       New York Federal Reserve Bank President John Williams gives a speech at the Economic Club of New York.

·       US Redbook (May 6th), IBD/TIPP Economic Optimism (May)

·       Brazil BCB Copom Meeting Minutes

·       Mexico Inflation (April), Auto Production (April), Auto Exports (April)

·       Argentina Industrial Production (March)

·       El Salvador Inflation (April)

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       China Imports/Exports/Balance of Trade (April), FX Reserves (April)

·       Indonesia Consumer Confidence (April)

·       Japan Household Spending (March)

·       Australia’s Treasurer presents the annual federal budget, Westpac Consumer Confidence Index (May), Retail Sales (March)

·       Philippines Imports/Exports/Balance of Trade (March), Industrial Production (March)

·       Sri Lanka Tourist Arrivals (April)

Europe

Political/Social Events –

·       Russia holds its Victory Day parade in Moscow, marking the day Nazi Germany was defeated.  It is expected President Vladimir Putin will use the event to rally the country to further commit to the war on Ukraine in the wake of the alleged Ukraine drone attack on the Kremlin last week.

·       In the UK, 1,400 security officers in the Unite union at Heathrow Airport begin a 48-hour strike in an ongoing dispute about pay. Separately, Unite members at GSK’s Ware factory begin a 49-hour walkout in a national pay dispute with the pharmaceutical company.

·       Guernsey celebrates Liberation Day, commemorating when the island was freed from German occupation in World War II.

Economic Reports/Events –

·       ECB Board Member Philip R. Lane participates in a  policy panel at IMF event 'Europe's Balancing Act: Taming inflation without a recession' in Berlin. 

·       ECB Board Member Isabel Schnabel gives a lecture at Hessischer Kreis e. V. at: Goethe University in Frankfurt.

·       France Imports/Exports/Balance of Trade (March), Current Account (March), FX Reserves (April)

·       UK BRC Retail Sales Monitor (April), Halifax House Price Index (April), BBA Mortgage Rate (April)

·       Spain Consumer Confidence (April)

·       Hungary Balance of Trade (March)

Middle East

Political/Social Events –

·       Russian Foreign Minister Lavrov hosts Turkish Foreign Minister Cavusoglu, Iranian Foreign Minister Amir-Abdollahian, and Syrian Foreign Minister Mekdad in Moscow for “quadripartite” talks on normalizing ties between Turkey and Syria.

Economic Reports/Events –

·       Kuwait Private Bank Lending (March)

·       Israel Budget Balance (April)

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Wednesday, May 10, 2023

Global

·       The UN Security Council is scheduled to hold a debate on Bosnia and Herzegovina.

Americas

Political/Social Events –

·       The House Financial Services Committee’s Financial Institutions and Monetary Policy Subcommittee holds a hearing on "Federal Responses to Recent Bank Failures."

·       The Senate Banking Committee’s Subcommittee on Economic Policy, chaired by Senator Elizabeth Warren (D-MA), may hold a hearing on the Federal Reserve’s role in overseeing Silicon Valley Bank before its failure.  Warren and Ranking Member Senator John Kennedy (R-LA) sent a letter to the Federal Reserve’s Inspector General asking him to testify on his findings.  

Economic Reports/Events –

·       US Inflation (April), CPI (April), Monthly Budget Statement (April), MBA Indexes (May 5th)s

·       Canada Building Permits (March)

·       Brazil Industrial Production (March)

Asia

Political/Social Events –

·       In Pakistan, former Prime Minister Imran Kahn is going to be indicted for his alleged involvement in the Toshakhana corruption case.  Protests are expected in major cities as a result.

·       India is bracing for protests over the Karnataka state assembly elections.  Polls show a neck-and-neck competition between the ruling Bharatiya Janata Party and the opposition Indian National Congress.

·       ASEAN holds its 42nd Summit in Labuan Bajo, Indonesia. The two-day summit will focus on regional growth as well as a stronger implementation of the five-point consensus on Myanmar (which has been largely seen as ineffective) and collective measures to reduce tensions around the South China Sea with China.

·       Micronesia celebrates Constitution Day, which was ratified in 1979.

Economic Reports/Events –

·       Japan FX Reserves (April), Coincident Index (March), Leading Economic Index (March)

·       South Korea Current Account (March), Unemployment Rate (April)

Europe

Political/Social Events –

·       NATO’s highest Military Authority, the Military Committee, will meet in person on 10 May 2023, in Brussels, Belgium. Admiral Rob Bauer, Chair of the Military Committee, will preside over the meeting, which will be attended by the Allied Chiefs of Defense and their Invitee counterpart from Sweden.  They will discuss Russia’s War on Ukraine and NATO’s continued support for Ukraine.

·       EU member states' representatives will discuss a European Commission proposal for an 11th package of sanctions against Russia. 

·       In the UK, UK, the Public and Commercial Services union members working for HMRC in Glasgow and Newcastle over pay, pensions, job security, and redundancy terms. This is the first of a series of walkouts that are set to continue into June.

·        

Economic Reports/Events –

·       Germany Inflation (April), CPI (April)

·       Italy Industrial Production (March)

·       Hungary Inflation (April)

·       Ukraine Inflation (April)

·       Slovenia Industrial Production (March)

·       Bulgaria Industrial Production (March), Retail Sales (March), Construction Output (March)

·       Russia FX Reserves (April)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

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

Africa

Political/Social Events –

·       Zambian President Hakainde Hichilema will be in Paris for meetings at the Paris Club on the country’s debt.

Economic Reports/Events –

·       Ghana inflation data (April)

·       Rwanda inflation data (April) 

Thursday, May 11, 2023

Global

·       G7 Finance Ministers and Central Bank Governors will meet through Saturday in Niigata, Japan.  The main agenda items include Russia’s War on Ukraine and spillover effects on the global economy, climate change, and the state of the financial sector.

·       The UN Security Council is scheduled to hold a briefing on ICC Libya.

·       OPEC releases its monthly report.

Americas

Political/Social Events –

·       Title 42, the US immigration policy allowing for the rapid expulsion to Mexico of illegal immigrants who cross the southern border, expires. US Homeland Security officials are expecting a new flood of migrants seeking to cross the border.

·       Florida Governor Ron DeSantis may launch a presidential exploratory committee today.

Economic Reports/Events –

·       Federal Reserve Board Governor Christopher J. Waller speaks on Financial Stability and Climate Change at a conference organized by the Federal Reserve Bank of St. Louis, Banco de Espana, and IE University, Madrid, Spain

·       US PPI (April), Initial Jobless Claims (May 6th)

·       Peru Interest Rate Decision, Balance of Trade (March)

·       Colombia Consumer Confidence (April)

Asia

Political/Social Events –

·       Japan’s Emperor and Empress host the official Spring Garden Party at the Palace.

Economic Reports/Events –

·       China Inflation (April), PPI (April), Vehicle Sales (April)

·       Japan Bank of Japan Summary of Opinions, Current Account (March), Bank Lending (April), Eco Watchers Survey Outlook (April)

·       Australia Consumer Inflation Expectations (May)

·       Philippines GDP (Q1)

·       Thailand Consumer Confidence (April)

Europe

Political/Social Events –

·       An informal meeting of EU Chiefs of Defense will be held in Brussels.

Economic Reports/Events –

·       Bank of England Interest Rate Decision

·       ECB Board Member Isabel Schnabel gives a talk at the scientific advisory board of the Federal Ministry of Finance (BMF) in Frankfurt.

·       ECB Board Member Luis de Guindos participates in a panel at the 20th edition of cycle of dialogues organized by Diario Madrid Foundation and Cercle d'Economia in Barcelona.

·       ECB Board Member Luis de Guindos gives a lecture at the Academia Europea Leadership in Barcelona.

·       UK RICS House Price Balance (April), NIESR Monthly GDP Tracker (April)

·       Serbia Interest Rate Decision

·       Russia Central Bank Monetary Policy Report, Vehicle Sales (April)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Saudi Arabia Industrial Production (March)

·       Turkey Inflation Report, Current Account (March), FX Reserves (May 5th)

·       Egypt Inflation (April)

·       Israel Consumer Confidence (April)

Africa

Political/Social Events –

·       Zambian President Hakainde Hichilema and African Continental Free Trade Area Secretary-General Wamkele Mene will speak at the Africa Debate investment conference in London.

Economic Reports/Events –

·       South African mining output (march), Manufacturing Production (March)

·       Namibia inflation data (April)

·       Ghana Inflation (April)

Friday, May 12, 2023

Global

·       G-7 science and technology ministers to begin three-day meetings in Sendai, Japan.

·       G-7 education ministers to begin a four-day meeting in Toyama, Ishikawa, Japan.

Americas

Political/Social Events –

·       Spanish Prime Minister Pedro Sanchez will meet U.S. President Joe Biden at the White House. The meeting will focus on strengthening US-Spanish relations and the war in Ukraine. 

·       The 9th Annual Meeting of Heads of States of the Association of Caribbean States meets in Antigua, Guatemala. 

Economic Reports/Events –

·       US Federal Reserve Board Governor (and Vice Chair nominee) Governor Philip N. Jefferson participates on a panel on Monetary Policy Strategy at the Hoover Institution Monetary Policy Conference, Stanford University, Stanford, California.

·       US Import Prices (April), Export Prices (April), Michigan Consumer Sentiment (May), Michigan Inflation Expectations (May), WASDE Report

·       Brazil Inflation (April), Business Confidence (May)

·       Mexico Industrial Production (March)

·       Canada New Motor Sales (March)

·       Argentina Inflation (April)

·       Colombia Industrial Production (March), Retail Sales (march)

·       Uruguay Industrial Production (March), Unemployment (March), Inflation (April)

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       China FDI (April), New Yuan Loans (April), Outstanding Loan Growth (April), Total Social Financing (April), M2 Money Supply (April), Current Account (Q1)

·       India Inflation (April), FX Reserves (May 5th), Industrial Production (March), Manufacturing Production (March)

·       Sri Lanka PPI (March)

Europe

Political/Social Events –

·       There will be an informal meeting of EU Foreign Ministers in Stockholm to discuss the situation in Ukraine and EU-China relations.

Economic Reports/Events –

·       Germany Current Account (March)

·       UK GDP (March), Goods Trade Balance (March), Industrial Production (March), Manufacturing Production (March), Construction Orders/Output (March), Business Investment (Q1)

·       France Inflation (April)

·       Spain CPI (April), Inflation (April)

·       Serbia Inflation (April)

·       Hungary Industrial Production (March)

·       Bulgaria Balance of Trade (March)

·       Russia Inflation (April)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Turkey Retail Sales (March)

Africa:

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Saturday, May 13, 2023 

Global

·       G-7 health ministers to begin two-day meetings in Nagasaki, Japan.

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       US Federal Reserve Board Governor Lisa D. Cook gives a Commencement Address at the Daniel “Chappie” James Arena, Tuskegee University, Tuskegee, Alabama.

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       Ukrainian President Zelensky meets German Chancellor Scholz and President Steinmeier in Berlin.

·       Swedish Foreign Affairs Minister Billstrom and EU High Representative for Foreign Affairs and Security Policy Borrell co-chair the EU Indo-Pacific Ministerial Forum in Stockholm to strengthen the bloc’s partnership with the region.

·       In the UK, members of the RMT rail union resume strike action across 14 train operators after rejecting the latest offer from the Rail Delivery Group.

·       The 2023 Eurovision Song Contest, one of the world’s largest televised events, begins in Liverpool, England.  The official host this year is Ukraine, but Liverpool is hosting on their behalf due to the war.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       Mauritania holds parliamentary elections.

Economic Reports/Events –

·       NSTR 

Sunday, May 14, 2023

Global

·       NSTR

Americas

Political/Social Events –

·       It is Mother’s Day in the US and Canada. 

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       Cambodia holds general elections.  Early voting began on May 7th. There is a risk of political protests and instability.

·       India’s Punjab Province holds elections.

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       Bremen state election is held in Germany.

·       Albania holds local elections.

·       Italy holds the first round of municipal elections.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       Turkey will hold presidential elections and parliamentary elections.  Incumbent President Recep Tayyip Erdogan faces a tough reelection bid against opposition leader Kemal Kilicdaroglu. 

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

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

Recommended Weekend Reads

May 5 - 7, 2023

Here are our recommended reads from reports we read in the last week.   We hope you find these useful and have a great weekend.   And let us know if you or someone you know wants to be added to our distribution list.

·       “The Rising Geopolitical Importance of Argentine Lithium” The National Interest Argentina’s mining exports hit a historic high of $3.86 billion, driven by robust lithium income. Indeed, lithium exports surged 234 percent from a year earlier, accounting for a fifth of all Argentine mining shipments. Whoever wins this year’s Argentinian elections will have a say in whether the federal state plays a larger role or if the country will maintain an investment regime that is open to foreign investment. Foreign governments are watching closely.

·       “The Strategic Repositioning of LNG: Implications for Key Trade Routes and Choke Points”  The French Institute for International Relations

2022 saw the climax so far of the weaponization of energy. The rupture between Russia and the West will have lasting and reverberating impacts on the geopolitics of commodity flows. Some shipping routes have already gained in traffic while others have declined, and as a result, the risks around chokepoints and the safety of navigation are fast-evolving. The share of exports from the OECD countries will continue to grow and have a stabilizing impact on the safety of shipping lanes. The post-war LNG trade pattern shifts will likely consolidate the Atlantic route between the U.S. and Europe as well as the North Sea Route for the bilateral Russia-China trade if icebreakers can be built while possibly reducing traffic via the Panama Canal and the Suez Canal. Other geopolitical risks loom large, including a Taiwan blockade and U.S.-China systemic confrontation. Hormuz remains a flashpoint, even if the latest Saudi-Iran rapprochement, and China’s agenda to reduce any risk of blockage, ease regional tensions.

·       ‘Nasty battle’: States fight states for EV, battery plants” E&E News

The lucrative federal incentives in last year’s Inflation Reduction Act are playing a key role in luring automakers and others to open EV-related businesses in this country. Separately, states and municipalities are on a “megadeal spending spree,” offering up around $14 billion in subsidies to attract EV and battery plants, according to a study by Good Jobs First, a nonprofit watchdog critical of government economic development subsidies.  Electric vehicles are the new frontier in what has always been a fraught process — states competing to devise ever-enticing tax and subsidy packages to attract hot companies. State leaders are looking at EVs and related industries as key to future economic development, particularly as the auto industry moves away from gas-powered cars. They want the jobs and tax revenue. These initial projects might also be the seeds for future industry investment as other companies sprout up near those at the vanguard. But economic development subsidies can be a drain on state and local government coffers, leaving some critics to question whether they are worth the public investments.

·       “Friendshoring Critical Minerals: What Could the U.S. and Its Partners Produce?” Carnegie Endowment for International Peace

Given existing reserves, it is possible for the United States and its key democratic partners to significantly friendshore the production of critical minerals. However, it would require an unprecedented buildout of the mining industry to achieve clean energy targets for 2030.

Chart of the Week 

Russia’s Arms Export Business Is Collapsing

From ForeignPolicy.com: “After cresting in the early 2010s, Russian arms exports have fallen to levels not seen since the collapse of the Soviet Union. The Wall Street Journal referred to Russia’s precipitous decline in arms exports as among “the casualties of Russia’s war in Ukraine.” 

But the timing doesn’t add up: According to data from the Stockholm International Peace Research Institute, Russia’s arms exports began falling in earnest in 2019, and were already down nearly 20 percent relative to 2011, the high-water mark for the Russian arms industry. That year, Russian arms exports nearly matched U.S. arms exports and were delivered to 35 different countries. Eleven years later, Russian arms exports had fallen by nearly 70 percent, with deliveries to just 12 countries.

If the war on Ukraine dealt the knockout blow to Russia’s arms exports, the industry had already been on the ropes for some time.”

My Informal SumZero Macro Talk

I was delighted to join with Manoj Ramnani, Chief Investment Officer of 93 East Capital, to discuss the ever-evolving landscape across global markets. We discuss the upcoming FOMC meeting, recent banking sector stress, geopolitical maneuvering in Europe, the Middle East, and APAC, and the upcoming U.S. election season.

CFA Society of Dallas-Fort Worth Lunch Presentation…

I was delighted and honored to have the chance to speak to the CFA Society of Dallas-Fort Worth this week. Thank you very much for having me. The many thoughtful, insightful questions and the opportunity to talk with folks afterward were truly rewarding for me. A number of folks have asked for my presentation. Here you go - thank you again for coming out to hear me, and I hope you find this useful.

J.P. Morgan IMF/World Bank Conference

I was honored and delighted to serve on a panel at J.P. Morgan’s recent IMF/World Bank Conference in Washington, DC. A truly star-studded panel, we covered a vast amount of issues in little over an hour ranging from the brewing debt ceiling battle to the future dominance of the US dollar to a variety of geopolitical issues of direct impact to the markets. Thank you, Joyce Chang, for inviting me!

Three Generations…

I have been a proud father for 31 years. And now I am a proud grandfather. Meet Brendan Francis Kelly, here with my son, Joseph. Brendan was born on April 26th. A third generation of Kelly men. I never would have dreamed of this day when I was young. I am a blessed man.

The Global Week Ahead

April 30 - May 7, 2023

This week, much of the world celebrates Labor Day on Monday – meaning many financial markets will be closed. But on Monday, President Joe Biden will host meetings with Philippine President Ferdinand Marcos, Jr. to solidify further mutual defense agreements between the two nations in the face of growing tensions in the South China Sea with China.

In the Middle East, Israel’s Parliament is expected to again take up work this week on the highly controversial judicial reforms that have led to widespread demonstrations in the country.   In London on Saturday, King Charles III and the Queen Consort Camilla will be officially crowned King and Queen of the United Kingdom and the Commonwealth Realms.

The real action this week will be among central banks. The US Federal Reserve meets and will announce whether to raise rates again or hold on Wednesday. The European Central Bank will also reveal a similar decision on Thursday. But several other central banks worldwide – Australia, Turkey, Malaysia, and Brazil, to name a few – will also be announcing interest rate decisions.

Those announcements will come amongst a slew of inflation data and PMIs in the US, Europe, and Asia – a lot of data for markets to take in this week.

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

Sunday, April 30, 2023

Global

·       NSTR

Americas

Political/Social Events –

·       Paraguay holds general elections.

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       Uzbekistan holds a vote on several constitutional amendments, including extending the presidential term from five to seven years, adding that Uzbekistan officially known as a “legal, social and secular state” (adding the word “secular”), adding a living minimum wage, guaranteeing the rights of the disabled, and a number of other amendments.

·       Vietnam will mark its 48th National Reunification Day.

·       French Polynesia holds the 2nd round of Assembly elections.

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       In the UK, the Royal College of Nursing (RCN) begins a 48-hour walkout over pay.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       Israel’s Knesset (Parliament) is expected to resume working on the controversial judicial reform legislation that has sparked widespread national protests. 

·       US Speaker of the House of Representatives Kevin McCarthy (R-CA) travels to Israel. He will be leading a bipartisan delegation of 20 members of the House.  House Minority Leader Hakeem Jeffries (D-NY) will also be visiting. McCarthy is expected to meet with Amir Ohana, the Speaker of the Knesset, and McCarthy will also address the Knesset. 

Economic Reports/Events –

·       Saudi Arabia Private Lending (March), M3 Money Supply (March)

Africa

Political/Social Events –

·       Mali will hold a constitutional referendum aimed at restoring democracy after a military takeover.

Economic Reports/Events –

·       NSTR

Monday, May 1, 2023

 Global

·       UN Secretary-General António Guterres will convene an international meeting on Afghanistan in Doha, Qatar (1-2 May).  

·        Switzerland takes the chair of the UN Security Council from Russia for the month of May. The UN Security Council President for May, Ambassador H.E. Mrs. Pascale Christine Baeriswyl of Switzerland, who will brief reporters on the program of work for the month.

Americas

Political/Social Events –

·       Philippine President Ferdinand Marcos, Jr. will meet with President Biden at the White House. The goal of the meeting is to further cement the mutual commitment to the defense of the Philippines, particularly in the South China Sea.

Economic Reports/Events –

·       US S&P Global Manufacturing PMI (April), ISM Manufacturing PMI (April), Construction Spending (April)

·       Canada S&P Global Manufacturing PMI (April)

·       Brazil Balance of Trade (April)

Asia

Political/Social Events –

·       Today is Marshall Islands Constitution Day.

Economic Reports/Events –

·       South Korea Imports/Exports/Balance of Trade (April)

·       India S&YP Global Manufacturing PMI (April)

·       Japan Jibun Bank Manufacturing PMI (April), Consumer Confidence (April)

·       Australia CoreLogic Dwelling Prices (April), Judo Bank Manufacturing PMI (April), TD-MI Inflation Gauge (April), ANZ-Indeed Job Ads (April), Commodity Prices (April)

Europe

Political/Social Events –

·       Labor Day is celebrated in most of Europe and is a public holiday.

·       French labor unions will hold nationwide demonstrations and strikes to protest the government's pensions reform during International Labor Day.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR 

Tuesday, May 2, 2023 

Global

·       NSTR

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       US Redbook (April 29th), JOLTS Report (March), Factory Orders (March),  Total Vehicle Sales (April)

·       Mexico FX Reserves (March), Business Confidence (April), S&P Global Manufacturing PMI (April)

·       Brazil S&P Global Manufacturing PMI (April), BCB Focus Market Readout

·       Argentina Tax receipts (April)

Asia

Political/Social Events –

·       The Asia Development Bank holds its 56th annual Board of Governors meeting in Incheon, South Korea. They will meet through Friday and are expected to discuss a wide range of issues, from food security and climate change to the Russian invasion of Ukraine. 

Economic Reports/Events –

·       South Korea Inflation (April), CPI (April), S&P Global Manufacturing PMI (April)

·       Indonesia S&P Global Manufacturing PMI (April), Inflation (April), Tourist Arrivals (March)

·       Australia Reserve Bank Interest Rate Decision

Europe

Political/Social Events –

·       Serbian President Aleksandar Vucic will meet Kosovar Prime Minister Albin Kurti in Brussels, Belgium. They are seeking to find a diplomatic solution to ongoing tensions between the two states over elections.

·       EU President Ursula von der Leyden will deliver a speech at the groundbreaking ceremony for a new plant of Infineon Technologies AG in Dresden, Germany. Later, she will meet with the President of the Czech Republic, Petr Pavel, in Prague.

·       Finland's center-right National Coalition Party, the far-right Finns Party and two junior partners will begin formal negotiations to form a new government following elections on April 2nd.

·       In the UK, strikes are expected by the National Education Union, members of the Unite union who work at the GSK pharmaceutical company, by the workers at the Passport Office, and also ambulance drivers across the country.

Economic Reports/Events –

·       ECB Board Member Andrea Enria participates in a discussion on "Banking supervision in a new economy": with Enria with Luc Laeven, ECB Director General Research, at the Annual ECB Banking Supervision Research Conference in Frankfurt.

·       Eurozone Inflation (April), CPI (April),  HCOB Manufacturing PMI (April), M3 Money Supply (April), Loans to Households (March)

·       Germany Retail Sales (March) HCOB Manufacturing PMI (April)

·       France HCOB Manufacturing PMI (April)

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

·       Spain S&P Global Manufacturing PMI (April)

·       Italy S&P Global Manufacturing PMI (April), Inflation (April), CPI (April), PPI (March)

·       Russia S&P Global Manufacturing PMI (April)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Turkey Istanbul Chamber of Industry Manufacturing PMI (April)

Africa

Political/Social Events –

·       Kenyan opposition leader Raila Odinga will resume protests against the government.

Economic Reports/Events –

·       Nigeria PMI (April)

·       South Africa Manufacturing PMI (April), Vehicle Sales (April)

·       Angola Gross Reserves (April)

Wednesday, May 3, 2023

Global

·       NSTR

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       US Federal Reserve Open Market Committee Interest Rate Decision & Press Conference

·       US MBA Mortgage Data (April 28), ADP Employment Change (April), S&P Global Manufacturing & Composite & Services PMIs (April), ISM Services Data (April)

·       Brazil Central Bank Interest Rate Decision

Asia

Political/Social Events –

·       Japan celebrates Constitution Memorial Day, a national holiday marking the new constitution brought into force after World War II.

Economic Reports/Events –

·       South Korea FX Reserves (April)

·       India S&P Global Composite & Services PMIs (April)

·       Australia Judo Bank Services PMI (April) Ai Group Industry & Construction & Manufacturing Indexes (April),, Retail Sales (April) RBA Chart Pack

·       Malaysia Central Bank Decision on Interest Rates

Europe

Political/Social Events –

·       Informal meeting of EU Employment and Social Affairs Ministers in Stockholm through May 4th.

·       German Foreign Minister Annalena Baerbock is hosting the 14th Petersberg Climate Dialogue in Berlin, together with the presidency of this year’s COP28 climate conference in the United Arab Emirates.

·       German Finance Minister Christian Lindner will be speaking with Moritz Schularick, president-designate of the Kiel Institute for the World Economy. The topic will be “New business models for Germany” and will cover the future of globalization regarding commodity, sales, and financial markets; the division of tasks between the state and the private sector; and the role of political consulting. 

Economic Reports/Events –

·       ECB Board Member Elizabeth McCaul participates in policy panel "Banking Supervision and the Role of Banks in a Future Banking System – Opportunities and Challenges Ahead" at the Annual ECB Banking Supervision Research Conference 

·       ECB Board Member Kerstin af Jochnick gives the closing speech at the Annual ECB Banking Supervision Research Conference 

·       Eurozone Unemployment (March)

·       France Budget Balance (March)

·       Italy Unemployment (March)

·       Russia GDP (March), Unemployment (March), Business Confidence (April), Retail Sales (April), Real Wage Growth (February), Corporate Profits (February)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Saudi Arabia Central Bank Interest Rate Decision, Riyad Bank PMI (April)

·       Turkey MPC Meeting Summary, Auto Sales (April), Imports/Exports/Balance of Trade (April), Inflation (April), PPI (April) CPI (April)

Africa

Political/Social Events –

·       Nigeria will launch its first national census in 17 years. The current population now exceeds 200 million people and is on track to become the 3rd largest population in the world by 2050, according to the United Nations.

Economic Reports/Events –

·       Kenya GDP (Q4)

Thursday, May 4, 2023

Global

·       The New York Federal Reserve’s Global Supply Chain Pressure Index is released.

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       US Exports/Imports/Balance of Trade (March), Nonfarm Productivity (Q1), Unit Labor Costs (Q1), Initial Jobless Claims (April 29th)

·       Canada Imports/Exports/Balance of Trade (March), Ivey PMI (April)

·       Brazil S&P Global Services & Composite PMIs (April)

·       Mexico Consumer Confidence (April), Unemployment (March)

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       China Caixin Manufacturing PMI (April)

·       Singapore S&P Global PMI (April)

·       Australia Imports/Exports/Balance of Trade (March)

Europe

Political/Social Events –

·       The EU Foreign Affairs Council (Development) will meet in Brussels to discuss the reform of multilateral development banks as well as the global consequences of Russia’s war on Ukraine as well as the situation in Sudan.

·       The EU Health Ministers will hold an informal meeting in Stockholm to discuss crisis preparedness.

·       Local elections are to be held in more than 230 councils in the UK. The results will offer some insights into the strength of the Conservative Party.

·       Also in the UK, security officers at Heathrow Airport are expected to start a three-day strike.

Economic Reports/Events –

·       European Central Bank Interest Rate Decision and Press Conference

·       Eurozone HCOB Composite & Services PMIs (April), PPI (March)

·       Germany Imports/Exports/Balance of Trade (March), Germany HCOB Services & Composite PMIs (April)

·       Spain Unemployment (April)

·       UK New Car Sales (April), S&P Global/CIPS Services & Composite PMIs (April), Mortgage Approvals & Lending (March), BoE Consumer Credit (March),

·       Italy S&P Global Services & Composite PMIs (April)

·       France HCOB Composite & Services PMIs (April)

·       Russia S&P Global Services & Composite PMIs (April)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       South Africa PMIs (April)

·       Kenya PMIs (April)

·       Zambia PMIs (April)

·       Ghana PMIs (April)

·       Mozambique PMIs (April)

·       Uganda PMIs (April)

Friday, May 5, 2023

Global

·       The United Nations Food and Agriculture Organization (FAO) Food Price Index is released.

Americas

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Federal Reserve Board Governor Lisa Cook gives the commencement address at Michigan State University in East Lansing, Michigan.

·       US Non-Farm Payrolls (April), Unemployment Figures (April), Consumer Credit Change (March), Used Car Sales (April)

·       Canada Unemployment (April)

Asia

Political/Social Events –

·       The Shanghai Cooperation Organization (SCO) will meet in Goa, India. Among those attending will be Pakistan’s Foreign Minister Bilawal Bhutto Zardari – the first such high-level visit from a senior official from Islamabad in almost ten years.

·       Cambodia will host the Southeast Asian Games through May 17th in Phnom Penh.

Economic Reports/Events –

·       China Caixin Services & Composite PMIs (April)

·       India FX Reserves (April 28th), Bank Loan Growth, Deposit Growth

·       Indonesia GDP (Q1)

·       Singapore Retail Sales (March)

·       Australia Reserve Bank Statement on Monetary Policy, Home Loans (March), Investment Lending for Homes (March)

Europe

Political/Social Events – Economic Reports/Events –

·       ECB Board Member Frank Elderson gives a speech at The State of the Union event organized by the European University Institute (EUI) in Florence, Italy. 

·       Eurozone HCOB Construction PMI (April), Retail Sales (March)

·       Germany Factory Orders (March), HCOB Construction PMI (April)

·       France Industrial Production (March), Non-farm Payrolls (Q1), HCOB Construction PMI (April), FX Reserves (April)

·       Italy HCOB Construction PMI (April), Retail Sales (March)

·       UK S&P Global/CIPS Construction PMI (April)

·       Spain Industrial Production (March), Consumer Confidence (April)

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Turkey FX Reserves (April 28th)

Africa:

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR 

Saturday, May 6, 2023

Global

·       NSTR

Americas

Political/Social Events –

·       In the US, Berkshire Hathaway holds its annual shareholder’s meeting in Omaha, Nebraska, led by chair Warren Buffett.

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       King Charles III and Queen Consort Camilla are formally crowned King and Queen of the United Kingdom and the Commonwealth Realms in London.

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       Mauritius FX Reserves (April) 

Sunday, May 7, 2023

Global

·       NSTR

Americas

Political/Social Events –

·       Chile holds its Constitutional Assembly election, choosing new members of the Constitutional Council to draft a new constitution. 

Economic Reports/Events –

·       NSTR

Asia

Political/Social Events –

·       Thailand is expected to hold general elections.

Economic Reports/Events –

·       NSTR

Europe

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Middle East

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

Africa

Political/Social Events –

·       NSTR

Economic Reports/Events –

·       NSTR

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