U.S. Regulatory Week Ahead

August 21 - 25, 2023

This coming week will be the last slow week of August in Washington, D.C.   The week’s big event will be the kick-off of the annual Jackson Hole Central Bank Conference hosted by the Kansas City Fed.  While the meetings are primarily about broad macroeconomic issues, financial services regulation will surely come up frequently, and we will be monitoring that closely. 

The only other event of note scheduled this week is at the Securities and Exchange Commission.  The Commission is holding an open meeting on whether to adopt a rule to narrow an exemption from the requirement that any Commission-registered broker-deal become a member of a national securities association if it trades securities elsewhere.

Looking back to last week’s big news event,  Federal Deposit Insurance Corporation (FDIC) Chair Marty Gruenberg’s gave a speech at the Brooking Institution revealing his intention to push for banks with as low as $50 billion in assets to be required to have the same resolution planning rules as larger banks along with the higher capital standards for banks with $100 billion or more.  The American Bankers Association, the Bank Policy Institute, and other bank lobbying organizations fired back at Gruenberg, making clear they intend to fight hard against the measure.  Look to the House Financial Services Committee to hold hearings in late September or early October exploring what the FDIC is trying to accomplish and likely push back pretty firmly against Gruenberg’s efforts.

Here is what else we are tracking in the coming week: 

U.S. Congressional Hearings

•   Congress is out of session for the month of August.  The Senate returns on September 5th, and the House of Representatives on September 11th.

US Regulatory Meetings & Events

Federal Reserve Board

• August 22, 2023, 1:30 – 3:00 p.m. CT:  Federal Reserve Board Governor Michelle Bowman participates in the Chicago Federal Reserve Bank’s “FedListens” event entitled “Joining the Labor Force After Covid: A Discussion of Youth Employment.”  The event will be held virtually.

• Friday, August 25, 2023, 10:05 a.m. CT:  Federal Reserve Board Chair Jay Powell will give an opening speech at the Kansas City Federal Reserve Bank’s 2023 Jackson Hole Economic Policy Symposium in Moran, Wyoming.  You can watch the speech HERE live.

U.S. Securities and Exchange Commission

• Wednesday, August 2023 – 10:00 a.m.: The Securities and Exchange Commission will hold an Open Meeting.  The Commission will consider whether to adopt rule amendments to narrow an exemption from the requirement under the Securities Exchange Act of 1934 that any Commission-registered broker-dealer become a member of a national securities association if it affects securities transactions elsewhere than an exchange where it is a member.

• Thursday, August 24, 2023, 2:00 p.m.: Closed meeting.

U.S. Commodities Futures Trading Commission

• Friday, August 25, 2023, 2:00 – 2:30 p.m. EST: CFTC Commissioner Christy Goldsmith Romero will give a closing address at the Global Research Alliance for Sustainable Finance and Investments Sixth Annual Conference at the Yale School of Management in New Haven, CT.

• Friday, August 25, 2023, 9:00 a.m. EST: The CFTC holds a closed-door meeting on enforcement matters.

Think Tank Events

• No events of note are scheduled in the coming week.

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

The Global Week Ahead

August 13 - 20, 2023

It seems the week ahead is going to be the last quiet week of the Summer in the North Hemisphere.  The big political events of the week will be President Biden hosting a summit at Camp David with the Prime Ministers of South Korea and Japan to discuss China policy, how to handle an increasingly bellicose North Korea, and broader security in the Indo-Pacific. 

 Also, this coming week, it is expected that former President Donald Trump will be indicted for a fourth time, now for alleged election interference in the state of Georgia. 

We will be watching a number of elections this week.  Argentina holds presidential primaries today (Sunday), and later in the week, elections for president in Ecuador are expected to be held – although the nation is tense following the assassination last week of a leading candidate, Fernando Villaviencio.  Also, this week, Guatemala holds an election, too.

We would note that the week after this one, the BRICS Summit will be held in South Africa (August 22-24), and both leaders around the world and markets will be watching closely what comes out of it.  A large number of countries want to join – including Iran and other rogue states – and there is some resistance to the idea from several members, including Brazil.   Russian President Vladimir Putin will attend virtually as South Africa, a signatory to the International Criminal Court – would be required to arrest him if he showed up in person for war crime charges.

On the global economic radar screen, we will be watching China as retail sales and industrial output will be reported on Tuesday.  Both will give markets a greater sense of how much the country has fallen in deflation. 

We get Federal Reserve meeting minutes this week, hopefully giving markets insights into what the Fed is thinking about inflation and whether we are finally done with interest rate hikes. 

And finally, Japan releases Q2 GDP figures, as does the EU.  Here is what else we are watching around the world this coming week:

Sunday, August 13, 2023

Global

• Nothing Significant to Report (NSTR)

Americas

Political/Social Events –

• Argentina holds presidential primary elections.  The general elections are on October 22.

• The Iowa State Fair began this past Thursday (August 10) and goes through August 20.  This weekend and through the coming week, most Republican presidential candidates will troupe through as the Fair has become a “Must Do” for presidential candidates to campaign. If you go, don’t forget to have a corndog. 

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• Chinese Foreign Minister Wang Yi will visit Cambodia.  The visit comes as Cambodia is seeing a change-over in power as long-time Prime Minister Hun Sen is stepping down after 38 years in power.  His son, Hun Manet, is scheduled to replace him on August 22.

• Taiwan’s Vice President, Lai Ching-te, will travel to Paraguay for the inauguration of incoming President Santiago Peña Palacios.  Lai will transit through the United States on the way to the event, stopping in New York on the way there and San Francisco on the way back.  Beijing has strongly objected to the US allowing her to travel through the US.

• China will be conducting military drills in the East China Sea through August 14.

Economic Reports/Events –

• NSTR

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Middle East

Political/Social Events –

• Saudi Arabia will host an international Islamic leaders conference in Mecca through Aug. 14.  The meeting will bring together more than 150 religious leaders and muftis from 85 countries and will seek to promote moderation, according to the Saudi State News Agency. 

Economic Reports/Events –

• NSTR

Africa

Political/Social Events –

• The U.S. Global Diversity Export Initiative Business Mission to Africa takes place in South Africa, Ghana, and Nigeria through August 15th.

Economic Reports/Events –

• NSTR

Monday, August 14, 2023

Global

• NSTR

Americas

Political/Social Events –

• The U.S. Congress remains out of session and will return to work in September (the House returns September 11, and the Senate returns September 5).

Economic Reports/Events –

• US Consumer Inflation Expectations (July)

• Chile Central Bank Monetary Policy Meeting Minutes

• Colombia Balance of Trade (June), Industrial Production (June), Retail Sales (June)

• Brazil BCB Focus Market Readout

Asia

Political/Social Events –

• Pakistan celebrates Independence Day, a national holiday.

Economic Reports/Events –

• India Inflation (July), WPI Inflation (July), WPI Food Index (July), WPI Fuel (July), WPI Manufacturing (July)

• New Zealand Composite NZ PCI (July), Services NZ PSI (July), visitor Arrivals (June)

Europe

Political/Social Events –

• Today is the expected start of the trial of Ksenia Fadeyeva, an ally of political prisoner Alexei Navalny, in a Russian court in the city of Tomsk. Fadeyeva is the former Tomsk Municipal Deputy, and she was detained in 2021 for “extremism.”  She previously headed Navalny’s Tomsk office until it was shuttered. 

• Economic Reports/Events –

• Germany Wholesale Prices (July)

• Poland Inflation (July)

• Ireland Construction PMI (July)

Middle East

Political/Social Events –

• NSTR

• Economic Reports/Events –

• Israel Unemployment (July)

• Turkey Auto Production (July)

Africa

Political/Social Events –

• The 19th session of the United Nation’s African Ministerial Conference on the Environment is held in Addis Ababa, Ethiopia.  

• Bloomberg hosts a week-long conference in Johannesburg on South Africa’s economic outlook in advance of the BRICS Summit being held the following week.

Economic Reports/Events –

• Rwanda Central Bank Interest Rate Decision

Tuesday, August 15, 2023

Global

• The UN’s Food and Agriculture Organization (FAO) Global Dairy Price Trade Price Index is released.

Americas

Political/Social Events –

• Santiago Peña Palcios will be inaugurated as the new President of Paraguay.  Taiwanese Vice President William Lai will be in attendance. 

• Today is the anniversary of the 2021 Taliban takeover of Kabul as U.S. military forces withdrew.

Economic Reports/Events –

• Federal Reserve Bank of Minneapolis President Neel Kashkari participates in a moderated conversation followed by audience Q&A for APi's annual global controllers’ conference.

• US Retail Sales (July), Import Prices (July), Exports Prices (July), Redbook (August 12), Business Inventories (June), NAHB Housing Market Index (August), Retail Inventories (June), Net Long-term TIC Flows (June), Overall Net Capital Flows (June)

• Canada Inflation (July), CPI (July), Manufacturing Sales (June), New Motor Vehicles Sales (June)

• Colombia GDP (Q2), Imports/Balance of Trade (June)

• Argentina Inflation (July)

• Peru GDP (June)

• Uruguay Central Bank Interest Rate Decision

Asia

Political/Social Events –

• The Asia-Pacific Economic Cooperation (APEC) Energy Ministers’ Meeting takes place in Seattle, Washington.

• South Korea celebrates Liberation Day – otherwise known as “Gwangbokjeol” – a  national holiday.  It marks the day the Republic of Korea was officially established and celebrates the liberation from Japanese occupation.  Interestingly, North Korea also celebrates this day, too.

• Today is Independence Day in India, celebrating the day when Indian Prime Minister Jawaharlal Nehru lifted the Indian flag above the Lahori Gate in Delhi.  Prime Minister Narendra Modi will give a national speech marking the occasion, and a bipartisan delegation of U.S. members of Congress will be in attendance.

• The Cambodian Constitutional Court rules on the case challenging parliament's refusal to allow a second vote for Pita Limjaroenrat to become prime minister.

Economic Reports/Events –

• China People’s Bank of China 1-Year MLF Announcement,  Industrial Production (July), Retail Sales (July), Unemployment (July)

• India Imports/Exports/Balance of Trade (July)

• Japan GDP (Q2), Capacity Utilization (June), Industrial Production (June)

• Australia Reserve Bank Meeting Minutes, Wage Price Index (Q2)

• Thailand GDP (Q2)

• Philippines Cash Remittances (June)

• Indonesia Imports/Exports/Balance of Trade (July)

Europe

Political/Social Events –

• Lithuania will close two of its six current border crossing checkpoints with Belarus. 

• Russia Foreign Minister Sergei Lavrov speaks at the opening of the Army 2023 military forum in Moscow.

• Liechtenstein celebrates National Day, a public holiday.

Economic Reports/Events –

• Eurozone ZEW Economic Sentiment Index (August)

• Germany ZEW Economic Sentiment Index (August), ZEW Current Conditions (August)

• UK Unemployment (June), Labor Productivity (Q2)

• Ireland Balance of Trade (June)

• Serbia Building Permits (June)

• Switzerland Producer & Import Prices (July)

• Hungary Construction Output (June), Industrial Production (June)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Saudi Arabia Inflation (July), Wholesale Prices (July)

• Turkey Budget Balance (July)

• Qatar Inflation (July)

• Israel M1 Money Supply (July)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• South Africa Unemployment (Q2)

• Nigeria Food Inflation (July), Inflation (July)

• Botswana Inflation (July)

• Uganda Central Bank Interest Rate Decision

Wednesday, August 16, 2023

Global

• The United Nations Conference on Trade and Development (UNCTAD) will launch its Economic Development in Africa Report 2023. 

Americas

Political/Social Events –

• The Dominican Republic celebrates Restoration Day, a public holiday.  It celebrates when the country gained independence from Haiti in 1844.

Economic Reports/Events –

• US Federal Reserve FMOC Meeting Minutes, MBA Mortgage Market Index (August 11), Building Permits (July), Housing Starts (July), Industrial Production (July), Manufacturing Production (July), Capacity Utilization (July)

• Canada Wholesale Sales (June), Housing Starts (July)

• Peru Unemployment (July)

• Paraguay Consumer Confidence (July)

Asia

Political/Social Events –

• Indonesian President Joko “Jokowi” Widodo will deliver a speech to parliament to commemorate the  78th anniversary of the country’s independence.  He is expected to use the speech to announce next year’s budget, including significant infrastructure investment and education spending proposals.

• Economic Reports/Events –

• China House Price Index (July)

• Japan Reuters Tankan Index (August)

• Australia Westpac Leading Index (July)

• New Zealand Reserve Bank Interest Rate Decision & Press Conference

• Indonesia Retail Sales (June)

• Sri Lanka Manufacturing & Services PMI (July)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• Eurozone GDP (Q2), Industrial Production (June), Employment (Q2), Industrial Production (June)

• UK Inflation (July), PPI (July), Retail Price Index (July)

• Ireland Residential Property Prices (June)

• Poland Industrial Production (June),  Inflation (July)

• Hungary GDP (Q2)

• Bulgaria GDP (Q2), Inflation (July)

• Serbia Current Account (June)

• Russia PPI (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Egypt Unemployment (Q2)

• Israel GDP (Q2)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• South Africa Retail Sales (June), SACCI Business Confidence (June)

• Namibia Central Bank Interest Rate Decision

Thursday, August 17, 2023

Global

• The G20 Health Ministers’ Working Group meets in Gandhinagar, India.

• The 1st World Health Organization’s (WHO) Traditional Medicine Global Summit takes place in Gandhinagar, India. 

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• US Initial Jobless Claims (August 12), Philadelphia Fed Manufacturing Index (August), Philadelphia Fed Business Conditions (August), Philadelphia Fed CAPEX Index (August), Philadelphia Fed Employment (August), Philadelphia Fed New Orders (August), CB Leading Index (July)

• El Salvador Inflation (August)

Asia

Political/Social Events –

• Australia’s Labor Party will hold its national conference through  August 20th.  Labor holds the conference every three years, and is the first they have held since taking power in 2022.  Observers are watching to see if the AUKUS agreement with the US and UK is brought up and debated, as some members of the party are opposed to Australia buying nuclear submarines from the UK and the US.

• Indonesia celebrates Independence Day, a national holiday marking when they declared independence from the Netherlands in 1945.

Economic Reports/Events –

• Japan Exports/Imports/Balance of Trade (July), Machinery Orders (June), Tertiary Industry Index (June)

• Singapore Exports (July), Balance of Trade (July)

• Australia Unemployment (July)

• New Zealand PPI (Q2)

• Philippines Central Bank Interest Rate Decision

• Hong Kong Unemployment (July)

• Sri Lanka PPI (June)

Europe

Political/Social Events –

• German Chancellor Olaf Scholz hosts Denmark's PM Mette Frederiksen in Berlin.

• The new Spanish parliament will convene for the first time following the general elections. No new leader has been chosen.

Economic Reports/Events –

• UK Gfk Consumer Confidence (August)

• Poland GDP (Q2)

• Spain Balance of Trade (June)

• Bulgaria Current Account (June)

• Hungary CPI (July), Inflation (July)

• Belarus GDP (July), Industrial Production (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Turkey FX Reserves (August 11)

• Israel Inflation Expectations (August)

Africa

Political/Social Events –

• Southern African heads of state attend a Southern African Development Community Summit (SADC) in Luanda, Angola.  The theme of the meeting is “Human and financial capital: the key drivers for sustainable industrialization of the SADC Region.”

• Gabon celebrates Independence Day, marking when the country became independent from France in 1960.

Economic Reports/Events –

• South Africa Building Permits (June)

Friday, August 18, 2023

Global

• NSTR

Americas

Political/Social Events –

• President Biden will host the first trilateral summit between the U.S., Japan, and South Korea at Camp David.  The Prime Ministers of both countries will attend.  Issues they are expected to discuss are the situation in the South China Sea, North Korea’s nuclear program and ramped-up threats, and dealing with China and the ongoing tensions between Beijing and Taiwan. 

• Economic Reports/Events –

• Canada PPI (July), Raw Materials (July)

• Mexico Retail Sales (June)

• Chile GDP (Q2), Current Account (Q2),

Asia

Political/Social Events –

• NSTR

Economic Reports/Events –

• China FDI (July)

• Japan Inflation (July)

• India FX Reserves (August 11)

• Taiwan GDP (Q2)

• Indonesia Current Account (Q2)

Europe

Political/Social Events –

• German Chancellor Olaf Scholz will meet with Austrian Chancellor Karl Nehammer in Salzburg, Austria.

• In Moscow, there will be a hearing in the trial of NGO Memorial's Oleg Orlov, a leading Russian human rights advocate, who is accused of 'discrediting' the Russian army.

Economic Reports/Events –

• ECB Board Member Philip Lane speaks on the ECB Podcast “Summer School” on the role of banks in fighting inflation.

• Eurozone Inflation (July), Balance of Trade (June), Construction Output (June), CPI (July)

• UK Retail Sales (July)

• Switzerland Industrial Production (Q2)

• Poland Employment Growth (July), Industrial Production (July), PPI (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Africa:

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Saturday, August 19, 2023

Global

• NSTR

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• Singapore’s Prime Minister Lee Sien Loong is expected to give a speech outlining his economic and social agenda.  Lee has been grappling with how to handle the rising cost of living and housing prices.

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, August 20, 2023

Global

• NSTR

Americas

Political/Social Events –

• Ecuador is scheduled to hold Presidential and Legislative elections. 

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Europe

Political/Social Events –

• Sweden hosts World Water Week through August 24.  They will discuss how to pursue innovative solutions for managing water in an increasingly unstable and resource-scarce world.

• Today is National Day in Hungary, a national holiday.  It is also known as State Foundation Day as well as St. Stephen’s Day, the nation’s first canonized saint.  It goes back to 1000 A.D. when Pope Sylvester II ordains St. Stephen as King of Hungary.

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.

U.S. Regulatory Week Ahead

August 14 - 18, 2023

First, a quick note on a slight change to our Regulatory Week Ahead.  Starting with this issue, we will include coverage of the two U.S. antitrust enforcers – the Federal Trade Commission and the Department of Justice Antitrust Division.  With DoJ’s Assistant Attorney General for Antitrust Jonathan Kanter’s recent speech at the Brookings Institution on “Promoting Competition in Banking,”  it is clear two new regulators have moved into the financial regulatory space. 

Now back to our usual previewing of the coming week:  It may still be the dog days of summer in Washington, but there is one big event next week.  FDIC Chair Marty Gruenberg will give a speech at the Brookings Institution on “lessons learned” from the resolution of regional banks – a direct reference to the recent collapse of Silicon Valley Bank and the closing of Commonwealth Bank in New York.  Banks will watch his speech closely for greater insight into FDIC policy – and perhaps comments about the banking regulators’ newly proposed capital requirements.  You can watch it online (link below).

Otherwise, there are no public speeches by senior regulators and no open meetings or rule proposals.  It is all quiet.  But if you have any questions, please let us know.  We hope you are enjoying your August!

U.S. Congressional Hearings 

• Congress is out of session for the month of August.  The Senate returns on September 5th, and the House of Representatives on September 11th.

US Regulatory Meetings & Events

• Monday, August 14, 2023 – 2:00 – 3:00 p.m.: FDIC Chair Martin Gruenberg speaks at the Brookings Institution on “The resolution of large regional banks and lessons learned.”  You can watch the speech online by clicking HERE.

• Thursday, August 17, 2023 – 2:30 p.m.: The U.S. Securities and Exchange Commission will hold a closed meeting.

• Friday, August 18, 2023 – 9:00 a.m. – 4:00 p.m.: The FDIC and Georgia Coalition of Black Chambers Host the Georgia Access to Capital Summit: Building an Inclusive Business Landscape for Under-Resourced Small Businesses at the Bibb County Professional Learning Center, Macon, Georgia

Think Tank Events 

• Nothing of note is scheduled at this point for next week.

Please let us know if you have any questions.

Recommended Weekend Reads

August 11 - 13, 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, relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list or sign up via the website.

Global Political Economy 

• “Vassals vs. Rivals: The Geopolitical Future of AI Competition”   Lawfare

  The U.S. should use an AI-competitive world as an opportunity to lead in developing an open, rule-bound, and balanced global AI ecosystem. For its part, it is in the U.S.’s national interest to encourage global AI competition and use it as a catalyst for creating a global AI ecosystem that is more open, rule-bound, and balanced than it would be in an AI vassal future.

Indo Pacific 

• “Support Provided by the People’s Republic of China to Russia”  Report from Office of the U.S. Director of National Intelligence

  The US DNI issued this report in late July, detailing how China “is pursuing a variety of economic mechanisms for Russia that mitigate both the impact of Western sanctions and export controls.  The PRC has increased its importation of Russian energy exports, including oil and gas supplies rerouted from Europe.”  The report goes on to detail Beijing’s increased use of its current and its financial infrastructure with Russia.

• “The End of China’s Economic Miracle”  Adam Posen/Foreign Affairs Magazine

  Posen, the President of the Peterson Institute for International Economics and a former voting member of the Bank of England’s rate-setting Monetary Policy Committee (MPC), points out that the first quarter of 2020, which saw the onset of COVID, was a point of no return for Chinese economic behavior, which began shifting in 2015, when the state extended its control: since then, bank deposits as a share of GDP have risen by an enormous 50 percent and are staying at that high level. Private-sector consumption of durable goods is down by around a third versus early 2015, continuing to decline since reopening rather than reflecting pent-up demand. Private investment is even weaker, down by a historic two-thirds since the first quarter of 2015, including a decrease of 25 percent since the pandemic started. And both these key forms of private-sector investment continue to trend still further downward.  

Russia

• “A War of Attrition: Assessing the Impact of Equipment Shortages on Russian Military Operations in Ukraine”   Center for Strategic and International Studies

• This report examines the impact of Russia’s growing military equipment and ammunition shortages on the Kremlin’s ability to prosecute the war in Ukraine and to carry out operations in other areas. In doing so, it focuses on the availability of artillery ammunition, as well as five weapons categories of central importance for Russia’s ability to sustain operations: tanks, artillery, uncrewed aerial vehicles, electronic warfare systems, and long-range precision strike weapons. 

Americas 

• “Meet the Candidates: Argentina”   Americas Quarterly

  Argentines head the polls on Sunday, August 13th, to vote in presidential primaries.  With inflation raging at historic rates, the stakes are high as the ruling Peronist Unión por la Patria coalition is struggling to retain power and right the nation’s abysmal economic conditions.

• “Latin America could become this century’s commodity superpower”   The Economist

  Latin America is no stranger to supplying the world with raw materials, but it could be on the verge of a boom. Three forces are pushing the region to become this century’s commodity superpower. The green transition is increasing the demand for metals and minerals that Latin America has in large supply, as well as the renewable energy to process them. The region already supplies more than a third of the world’s copper, used in wiring and wind turbines, and half of its silver, a component of solar panels.

• “What Should College Athletes Be Paid?  Market Structure and the NCAA”  Federal Reserve Bank of St. Louis

  This interesting Teachers Guide written by the St. Louis Fed asks: What should college athletes be paid? The debate over the compensation for student-athletes in the US is not new, but recent policy changes and court cases have once again brought the issue to the forefront. This issue looks at how the market structure underlying college athletics has taken this debate all the way to the Supreme Court. 

Charts of the Week 

The U.S. Pandemic Geographic Income Shift  

There has been a lot of talk about the great migration of 2020-2021 because of the Pandemic.  But how did that break down in terms of income shifts?  Axios, looking at a new analysis of tax data from the Economic Innovation Group, shows a surge in incoming that arrived in many rural and exurban cities as well as popular vacation spots.  Big cities were, as we all know, the big losers.  And of those who left, disproportionately, it was those with higher incomes. 

Axios reports that San Francisco’s outbound migration caused a 20 percent drop in adjusted gross income from 2020 to 2021.  In Manhattan, it dropped 13 percent, and in Boston, 11 percent – and overwhelmingly, it was high earners who left.  San Francisco’s leavers had an average taxable income of $240,000. 

The biggest winners in terms of wealth moving in?  Walton County, Florida, in the Florida panhandle, saw a 51.6 percent increase in income per person.  Other places that were big winners; Naples, Florida; Collier County, Florida; and Pitkin County (Aspen), Colorado – all up by 31 percent or more.

Recession or Not? Where Do the Banks Stand? 

As markets debate whether we are headed for a soft economic landing or a recession of some sort is already built in, it is always interesting to see where the major Wall Street investment banks stand.  While it seems to us that overall sentiment is leaning toward no recession, Bloomberg this week offered a scorecard, and surprisingly, most of the big banks are still in the camp a recession is coming. 

Fulcrum Macro’s Global & U.S. Summer Overview

We are happy to share our latest macro overview of key geopolitical issues along with an update on the Washington agenda and upcoming U.S. Elections. Please let us know if you have any questions - always happy to help!

The Global Week Ahead

August 6 - 13, 2023

This week, we are watching the meeting in Saudi Arabia Sunday of senior diplomats from 30 nations – including China – seeking to craft a 10-point peace plan proposal to end the war in Ukraine.  While Russia was excluded from the meeting, China’s eagerness to attend and play a critical role was the big news.  China is increasingly concerned about Russian and Ukrainian wheat and grain access, which is at risk due to Russia’s withdrawal from the Black Sea Grain Initiative.  Last week, Russian attacks on Ukrainian grain storage facilities destroyed an estimated 40 thousand tons of grain – mostly destined for African nations, China, and Israel –  driving up global grain prices by more than 5 percent.

To that point, Russian President Vladimir Putin agreed late last week to travel to Turkey sometime this week (date not set yet) for meetings with Turkish President Tayyip Erdogan to discuss the possibility of restoring the Black Sea Grain Initiative.  Reports suggest Russia is now finding it harder and harder to sell its grain and other agricultural products and may want to return to the agreement. 

We are closely monitoring other key geopolitical events this week, including a likely no-confidence vote in the Indian Parliament for Prime Minister Narendra Modi for his handling of ethnic clashes on the Myanmar border.  We expect he will easily survive the vote.  And in Pakistan, as former Prime Minister Imran Kahn was arrested late last week, current Prime Minister Shehbaz Sharif is expected to dissolve Parliament on Wednesday and call for snap elections within the next 90 days.

Meanwhile, Japanese Prime Minister Fumio Kishida will host Iranian Foreign Minister Hossein Amirabdollahian.  He is expected to discuss the Ukraine War and urge Iran to end its weapons sales (especially drones) to Russia.  Iran is not likely to agree to step back, but it adds new pressure on Tehran to reconsider its support for Moscow.

In Latin America, Argentina holds a presidential primary vote on Sunday before the general elections in October.  The country is suffering from extraordinary inflation - 116 percent -- and voters are getting restless for a switch in political leadership.

On the economic radar screen this week, markets are keenly watching both US inflation numbers and China’s inflation figures and export/import numbers.  The ECB Consumer Expectations Survey is released on Tuesday in Europe, and the UK reports GDP figures on Friday.  

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

Sunday, August 6, 2023

Global

• Saudi Arabia hosts a meeting of high-level officials from 30 states – including China – to discuss how to craft a peace proposal to end the Ukraine War.  This meeting continues talks that began in June in Copenhagen, Denmark, aimed at unifying the West's and the Global South's positions regarding the broad framework for any future negotiations. Russia was not invited.   A third round of discussions is likely to be held in New Delhi in September.

Americas

Political/Social Events –

• Today is Independence Day in Bolivia, marking when the country declared its independence from Spain in 1825.

• Jamaica celebrates Independence Day, marking the day it gained independence from the UK.

• El Salvador celebrates San Salvador Day, celebrating the Divine Savior for whom the country is named.  It is a national holiday.

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• Japan’s Prime Minister Fumio Kishida will host Iranian Foreign Minister Hossein Amirabdollahian.  He is expected to discuss the Ukraine War and urge Iran to stop selling weapons to Russia. 

• APEC holds a high-level meeting on Health and the Economy in Seattle, Washington.

• Today is the78th anniversary of the atomic bomb being dropped on Hiroshima.

Economic Reports/Events –

• NSTR

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Israel Tourist Arrivals (July)

• Qatar Financial Centre PMI (July)

Africa

Political/Social Events –

• The Economic Community of West African States' deadline for the military junta in Niger to reinstate ousted President Mohamed Bazoum.

Economic Reports/Events –

• NSTR

Monday, August 7, 2023 

Global

• Russian President Vladimir Putin is likely to travel to Turkey this week for meetings with Turkish President Tayyip Erdogan to discuss the possible resumption of the Black Sea Grain Initiative.  They have not set a formal date yet.

Americas

Political/Social Events –

• Today is Civic Day in Canada, a national holiday.

Economic Reports/Events –

• US Federal Reserve Board Governor Michelle Bowman and Atlanta Federal Reserve Bank President Raphael Bostic speak at the Fed Listens event hosted by the Federal Reserve Bank of Atlanta in Georgia.

• US Consumer Credit Change (June), Used Car Prices (July)

• Mexico Consumer Confidence (July)

• Chile Imports/Exports/Balance of Trade (July)

• Brazil Car Production (July), BCB Focus Market Readout

Asia

Political/Social Events –

• Former Japanese Prime Minister Taro Aso will visit Taiwan for the first time since 2010 and meet with President Tsai Ing-wen.

• Cambodia’s Prime Minister Hun Sen is expected to formally endorse his son, Hun Manet, as the new prime minister, officially handing over power after 38 years.  His party won 96 percent of the seats after the main opposition parties were barred from fielding candidates.

Economic Reports/Events –

• Bank of Japan Summary of Opinions, FX Reserves (July), Leading Economic Index (June), Coincident Index (June)

• Australia ANZ-Indeed Job Ads (July)

• Indonesia GDP (Q2),  FX Reserves (July)

• Thailand Inflation (July)

• Philippines FX Reserves (July)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• Bank of England Huw Pill holds a virtual Q&A on the cost of living and current economic conditions.

• Germany Industrial Production (June)

• UK Halifax House Price Index (July), BBA Mortgage Rate (July)

• France FX Reserves (July)

• Spain Consumer Confidence (July)

• Switzerland FX Reserves (July)

• Poland FX Reserves (July)

• Ukraine FX Reserves (July)

• North Macedonia Inflation (July)

• Russia FX Reserves (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Turkey Treasury Cash Balance (July)

• Qatar GDP (Q1)

• Israel FX Reserves (July)

Africa

Political/Social Events –

• Côte d’Ivoire celebrates its Independence Day, marking the day the country won its independence from France in 1960.

Economic Reports/Events –

• South Africa FX Reserves (July)

Tuesday, August 8, 2023

Global

• NSTR

Americas

Political/Social Events –

• The Amazon Cooperation Treaty Organization (ACTO) Summit is held through August 9 in Belem, Brazil. Member states, including Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname and Venezuela, the US, and France, will attend.  The Focus of the talks will be how to attract investments, combat deforestation, protect Indigenous peoples, and encourage sustainable development in the face of climate change.  Belim is where the COP30 Summit will be held in 2025.

• Mississippi holds gubernatorial primary elections.  The general election will be held on November 7, 2023, and runoff (if necessary) on November 28.

• Ohio holds a ballot initiative that would require a 60 percent vote on future state constitutional amendments as well as expand the signature cure period.   

Economic Reports/Events –

• Philadelphia Federal Reserve Bank President and current Federal Open Market Committee member Patrick Harker speaks at the Philadelphia Business Journal’s State of the Economy event in Philadelphia, Pennsylvania.

• US NFIB Business Optimism Index (July), Imports/Exports/Balance of Trade (June), Total Household Debt (Q2), IBD/TIPP Economic Optimism (August), Wholesale Inventories (June)

• Canada Imports/Exports/Balance of Trade (July)

• Brazil BCB Copom Meeting Minutes

• Chile Inflation (July)

• Costa Rica Inflation (July)

• Colombia Inflation (July)

Asia

Political/Social Events –

• Indian Prime Minister Narendra Modi faces a no-confidence vote in the Parliament over ethnic violence in the northeastern state of Manipur.  It is unlikely to succeed.  Manipur is on the border with Myanmar and has been struggling with refugee challenges.

Economic Reports/Events –

• China Imports/Exports/Balance of Trade (July), FX Reserves (July)

• Japan Household Spending (June), Current Account (June), Bank Lending (July), Eco Watchers Survey (July)

• Australia Westpac Consumer Confidence Index (August), NAB Business Confidence (July), Building Permits (June)

• Taiwan Imports/Exports/Balance of Trade (July), Inflation (July)

• Indonesia Consumer Confidence (July)

• Philippines Imports/Exports/Balance of Trade (June)

• Pakistan Balance of Trade (July)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• The ECB releases their Consumer Expectations Survey

• Germany Inflation (July), CPI (July)

• France Imports/Exports/Balance of Trade (June)

• Hungary Inflation (July), Balance of Trade (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Egypt FX Reserves (July)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• Tanzania Inflation (July) 

Wednesday, August 9, 2023 

Global

• NSTR

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• US MBA Mortgage Index (August 4)

• Canada Building Permits (June)

• Brazil Retail Sales (June)

• Mexico Inflation (July)

• Colombia Consumer Confidence (July)

• Argentina Industrial Production (June)

Asia

Political/Social Events –

• Additional Japanese trade restrictions on Russia, including on automobiles and other goods, will enter into force.

• Pakistan’s Prime Minister Shehbaz Sharif is likely to dissolve parliament and call for new elections within 90 days.

• The Bank of Indonesia will host a one-day investment forum in Tokyo, presenting nine carbon neutrality-related projects open for investment.  This is the first time the central bank has hosted such an event in Japan. 

• Today is the 78th anniversary of the atomic bomb being dropped on Nagasaki.

• Singapore celebrates National Day, a national holiday.

Economic Reports/Events –

• China Inflation (July), PPI (July)

• Japan Machine Tool Orders (July)

• South Korea Unemployment (July)

• Philippines Unemployment (July)

• New Zealand Business Inflation Expectations (Q2)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• UK RICS House Price Balance (July)

• Italy Industrial Production (June)

• Hungary  Monetary Policy Meeting Minutes, Balance of Trade (June), Budget Balance (July)

• Ukraine Inflation (July)

• Russia Inflation (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Israel Business Confidence (July), Budget Balance (July)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• Kenya’s Central Bank Interest Rate Decision

Thursday, August 10, 2023

Global

• OPEC Monthly Report

Americas

Political/Social Events –

• A  Georgia judge in Atlanta will hear arguments on former President Donald Trump's bid to block an investigation of his alleged attempts to overturn Georgia’s 2020 election results.

• Ecuador celebrates Independence Day.

Economic Reports/Events –

• Atlanta Federal Reserve Bank President Raphael Bostic will offer welcoming remarks at the Fed Communities event via webinar.

• US Inflation (July), CPI (July), Unemployment (August 4), Monthly Budget Statement (July)

• Mexico Central Bank Interest Rate Decision

• Paraguay Inflation (July)

• Peru Central Bank Interest Rate Decision, Balance of Trade (June)

Asia

Political/Social Events –

• Indonesia hosts the Gaikindo Indonesia International Auto Show.

Economic Reports/Events –

• Japan PPI (July)

• India Reserve Bank Interest Rate Decision

• Australia Consumer Inflation Expectations (August)

• Philippines GDP (Q2)

• Thailand Consumer Confidence (July)

Europe

Political/Social Events –

• The German states of Bayern and Hessen hold local parliamentary elections.

• The launch window for Virgin Galactic’s Galactic 02 opens.  It is the company’s second commercial space flight and the first to take private astronauts.

Economic Reports/Events –

• Italy Inflation (July), CPI (July)

• Ireland Inflation (July)

• Serbia Central Bank Interest Rate Decision

• Bulgaria Balance of Trade (June), Construction & Industrial Outputs (June), Retail Sales (June)

• North Macedonia PPI (June)

• Belarus Inflation (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Egypt Inflation (July)

• Turkey Industrial Production (June), Unemployment (June), FX Reserves (August 4)

• Israel Imports/Exports/Balance of Trade (July), Consumer Confidence (July)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• South Africa Gold Production (June), Mining Production (June), Manufacturing Production (June)

• Namibia Inflation (July)

• Rwanda Inflation (July)

• Mozambique Inflation (July)

Friday, August 11, 2023

Global

• NSTR

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• US PPI (July), Michigan Consumer Sentiment (August), Michigan Current Conditions (August), Michigan Inflation Expectations (August), WASDE Report

• Brazil Inflation (July), IBC-Br Economic Activity (June), Business Confidence (August)

• Mexico Industrial Production (June)

• Uruguay Industrial Production (June)

• El Salvador PPI (July)

Asia

Political/Social Events –

• The annual Malabar naval exercise — involving the United States, Japan, India, and Australia — will commence and last through August 22 off of Australia's east coast.

Economic Reports/Events –

• India Industrial Production (June), Manufacturing Production (June),  Bank Loan Growth (July 28)

• New Zealand Business NZ PMI (July), Food Inflation (July)

• Singapore GDP (Q2), Current Account (Q2)

• Hong Kong GDP (Q2)

• Thailand FX Reserves (July)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• Germany Current Account (June)

• France Unemployment (Q2), Inflation (July)

• UK GDP (Q2), Business Investment (Q2), Manufacturing Production (June), Goods Trade Balance (June), Construction Orders (Q2), Construction Output (June), Industrial Production (June), NIESR Monthly GDP Tracker (July)

• Italy Balance of Trade (June)

• Spain Inflation (July), CPI (July)

• Poland Balance of Trade (June), Current Account (June)

• Serbia Inflation (July)

• Kosovo Inflation (July)

• Russia GDP (Q2), Balance of Trade (June)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Turkey Current Account (June), Retail Sales (June)

• Jordan Inflation (July)

Africa:

Political/Social Events –

• Chad celebrates Independence Day, a national holiday.

Economic Reports/Events –

• NSTR

Saturday, August 12, 2023 

Global

• NSTR

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• Six states in Malaysia hold elections.  More than 10 million people will likely vote in Keday, Kelantan, Terengganu, Penang, Selangor, and Negeri Sembilan.   A total of 572 candidates are running for 245 state-level seats. 

Economic Reports/Events –

• China New Yuan Loans (July), Outstanding Loan Growth (July), total Social Financing (July), M2 Money Supply (July), Vehicle Sales (July)

• Indonesia Car Sales (July)

Europe

Political/Social Events –

• Russia celebrates Air Force Day.

• Today in the UK is “the Glorious Twelfth” – the opening of grouse hunting season.

Economic Reports/Events –

• NSTR

Middle East

Political/Social Events –

• NSTR

• Economic Reports/Events –

• NSTR

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Sunday, August 13, 2023

Global

• NSTR

Americas

Political/Social Events –

• Argentina holds presidential primary elections.  The general elections are on October 22.

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• Taiwan’s Vice President, Lai Ching-te, will travel to Paraguay for the inauguration of incoming President Santiago Peña Palacios.  Lai will transit through the United States on the way to the event, stopping in New York on the way there and San Francisco on the way back.  Beijing has strongly objected to the US allowing her to travel through the US.[

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

U.S. Financial Regulatory Week Ahead

August 7 - 11, 2023

It is truly the dog days of summer in Washington.  As we noted last week, Congress is out of session until September, Washington’s battalions of lawyers and lobbyists have headed for the beach, and there is not much happening this coming week on the regulatory agenda.   Please let us know if you have any questions.  I hope you are enjoying your August!

U.S. Congressional Hearings 

• Both the U.S. House of Representatives and the U.S. Senate are out of session for the month of August.  No hearings are scheduled.

US Regulatory Meetings & Events

• Monday, August 8, 2023: The U.s. Court of Appeals for the Firth Circuit will hear arguments Monday in a case over the SEC’s 2022 proxy advisory firm regulations. The hearing will be the biggest judicial test yet of SEC authority in removing 2020 curbs on firms that advise large funds voting on ESG proposals and other matters at annual shareholder meetings.

• Wednesday & Thursday, August 9 & 10, 2023: The Securities and Exchange Commission holds closed meetings on both days.

Think Tank Events 

• Tuesday, 10:00 a.m., August 8, 2023 - The Bipartisan Policy Center hosts their Leaders Speakers Series with Ginnie Mae President Alanna McCargo.  She will be speaking on “Opportunities to Expand Homeownership Opportunities for Underserved People and Communities”

• Wednesday, 9:00 a.m., August 9, 2023: The Peterson Institute for International Economics holds a panel discussion on “Can supervisory reform prevent repeat bank failures in the US?” 

Recommended Weekend Reads

August 4 - 6, 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, relaxing weekend.   And let us know if you or someone you know wants to be added to our distribution list.

Global Political Economy

• “Economists Reconsider Industrial Policy”   Project Syndicate

  Three noted international economists -Dani Rodrik, Réka Juhász, and Nathan Lane – take a fresh look at the performance of industrial policies.  They note that in the past, economists often focus on indicators such as import tariffs, capturing only limited dimensions of such measures and conflating their objectives with others.  A new generation of research efforts takes a more productive approach – and reaches very different conclusions.

• “The Trade-Offs of Counterterrorism Policies”  Economic Research, Federal Reserve Bank of St. Louis

  Abstract: This article provides a modern overview of counterterrorism tools and their trade-offs for curbing terrorist attacks and their consequences. Defensive and proactive countermeasures constitute two main classes of counterterror tools deployed by targeted governments. The primary drawback of defensive actions, which make terrorist attacks more costly and less apt to succeed, is attack transference that shifts the mode, venue, or target of attacks to those less protected. In contrast, offensive, proactive measures, which confront the terrorists directly, may result in backlash as terrorist sympathizers, the public, and state sponsors augment their terrorist support resulting in more recruitment and attacks. Other essential trade-offs are identified and discussed. Additionally, we formulate a two-stage canonical game-theoretic model involving a targeted government and a terrorist group adversary. This model accounts for defensive and proactive policies but also myriad scenarios. As such, it serves as a foundation to explain modern counterterrorism literature, as illustrated by a discussion of iconic contributions to the study of counterterrorism.

Indo Pacific 

• “Why China’s Export Controls on Germanium and Gallium May Not Be Effective”  Stimson Center

  In 2010, China adopted a series of export controls on rare earth exports to Japan, the United States, and the European Union. Those export controls led to massive smuggling and pushed Japan and the United States to diversify their rare earth supply chains, cutting at least 30% of China’s market share of the global supply of rare earths from 2010 to 2021. China’s recent export controls on gallium and germanium are now increasing calls in more countries for a similar diversification of supply chains of critical materials away from China. While it can take years to diversify supply chains, and the cost of doing so is often prohibitive, the new controls will force countries to continue to advance policies that reduce their dependence on China for critical materials.

•   “Podcast: Japan and NATO in 2023”  International Institute for International Affairs

  The Podcast of IISS experts unpacks the 2023 NATO Summit in Vilnius, Lithuania, and the developments around Japan-NATO cooperation (as NATO has opened an office in Tokyo and is likely to open more offices in the Indo-Pacific), along with Japan’s responses to Russia’s war in Ukraine.  

• “Why is Italy Withdrawing From China’s Belt and Road Initiative?”  Council on Foreign Relations

  In 2019, during Chinese President Xi Jinping’s visit to Rome, Italy shocked the United States and Europe by becoming the first Group of Seven (G7) country to join China’s Belt and Road Initiative (BRI).  But this past week, Italian Prime Minister Giorgia Meloni indicated joining the BRI was a “big mistake,” and Italian Defense Minister Guido Crosetta called Italy’s decision to join the BRI an “improvised and atrocious act.”  So why is Italy pulling out now?

Russia

• “Putin and Prigozhin: It’s Complicated”  Belfer Center for International Affairs, Harvard University

  In late June, Yevgheny Prigozhin led a 36-hour mutiny against President Vladimir Putin’s military leadership, driving his Wagner Forces within 200 kilometers of Moscow.  After quickly backing down, Prigozhin announced he was going into exile in Belarus, and the Wagner Forces were going to be disbanded and absorbed into the Russian Army.  Neither happened.  Prigozhin appeared in Moscow last week at the Russia-Africa Leaders’ Summit, shaking hands with various African leaders.  And the Wagner Group apparently has not been disbanded.  So what is going on?  It’s complicated.

Africa 

• “Kenya’s debt struggles go far deeper than Chinese loans”  Chatham House

  Despite recent claims of a Chinese state-linked hacking team carrying out systematic cyber-attacks on Kenyan government institutions being denounced by Kenya’s Ministry of Interior as ‘sponsored propaganda’, Kenya’s debt burden to China is under scrutiny once again as the alleged attacks were reportedly driven by a desire to assess the status of repayments.  Chinese loans account for roughly 64 percent of Kenya’s current stock of bilateral external debt.  And the question being asked now is did the Kenyan government post the strategic Mombasa Port as collateral for these loans, feeding accusations of China indulging in ‘debt-trap diplomacy’ both in Kenya and across the continent.

• “From Russia, with little to show for it”   Institute for Security Studies

  Russian President Vladimir Putin was hoping for a record turnout of African leaders at the second Russia-Africa summit in St Petersburg last week to show the West he wasn’t isolated after all. He didn’t quite pull that off. Only 17 African heads of state attended – far fewer than the 43 at the 2019 Sochi summit.  So if Putin got some recognition, what did Africa get? Not much, judging by the joint declaration, which looks as though it was written almost exclusively by the Kremlin. It is full of statements implicitly harnessing Africa in support of Moscow’s posture against Western sanctions imposed on it for invading Ukraine.

Chart of the Week 

Looking at U.S. Sanctions in 2022

The Center for a New American Security just published a new report looking at the massive increase of individuals and entities placed under sanctions.  In 2022, 2,275 persons were added to the Specially Designated Nationals and Blocked Persons (SDN) list.  The below chart shows how Russian persons and entities were the primary targets of the sanctions:

The Global Week Ahead

July 30 - August 6, 2023

Summer holidays are now in full force.  In Washington, Congress adjourned for their annual August recess and won’t return until almost mid-September.  Brussels, London, and Berlin (which went on holiday two weeks ago) are also quiet - indeed, empty - as government officials and staff have disappeared to the beaches or mountains.  The same is true for most financial markets.  The Summer Doldrums are upon us.

But there are still plenty of important things happening around the world this week.  China implements its new ban on exporting germanium and gallium. Both are critical raw materials used in semiconductors and other electronics, and the technology industry is scrambling to figure out how to make up for the shortfall.  Overall, China produces more than 90 percent of both germanium and gallium. 

Also, this week,  the US takes the chair of the UN Security Council for August.  US Secretary of State Antony Blinken will personally chair a special meeting to discuss the “Famine and conflict-induced global food insecurity” – an issue that goes right to Russia’s recent abrogation of the Black Sea Grain Initiative (which seems to be official dead as Russia refused to negotiate).  Meanwhile, the foreign ministers of the states of the Organization of Islamic Cooperation will discuss burnings of the Koran in Sweden and Denmark at an extraordinary virtual meeting.  Both burnings have sparked widespread protests and outrage in the greater Muslim world that does not seem to be calming down.

On the global economic radar screen, a lot of economic data is hitting the markets his week.  Markets will be particularly watching China’s PMIs for further indications of the size and scope of the country’s fading economic recovery.   In Europe, markets will also focus on the Eurozone’s CIP and GDP numbers, the Bank of England’s policy meeting, and the Reserve Bank of Australia’s rates decision.   In the Americas, the Central Bank of Brazil meets, while in the US, jobs data and productivity data are reported. 

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

Sunday, July 30, 2023 

Global

• NSTR

Americas

Political/Social Events –

• The Panama Canal Authority will begin limiting daily transit capacity due to severe drought conditions.  They are expected to allow only 32 ships per day.

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• APEC holds a meeting on the Finance Ministers’ Process in Seattle, Washington.

• In Panama, the trial of 36 defendants, including ex-presidents Ricardo Martinelli and Juan Carlos Varela, accused of money laundering with Brazilian construction group Odebrecht.

• Chile hands over the presidency of the Pacific Alliance to Peru.

• Today is Independence Day in Vanuatu, marking the day in 1980 when they were granted their independence from Great Britain.

Economic Reports/Events –

• NSTR

Europe

Political/Social Events –

• Russia celebrates Naval Day.  Traditionally, the country shows off its latest weapons, ships, and aircraft, but it is not clear what will happen this year due to the Ukrainian invasion.  While on paper, Russia has the second-largest naval fleet in the world.  But the reality is many of those ships are small - Russia currently has only one aircraft carrier (to the US Navy’s eleven super-carriers) – and they place most of their focus on nuclear submarines, although that has reportedly been cut back due to the costs of the Ukraine invasion.

• Italy may declare a state of emergency to deal with the heatwave the country has been enduring.

• French Economy Minister Bruno Le Maire visits Beijing to discuss economic and trade issues.

Economic Reports/Events –

• NSTR

Middle East

Political/Social Events –

• Israel unveils a massive new rail network that could eventually enable train connections to Saudi Arabia.   

Economic Reports/Events –

• NSTR

Africa

Political/Social Events –

• The Central African Republic will hold a referendum on changing the constitution to allow incumbent President Faustin-Archange Touadéra to run for a third term in 2025.  Ominously, the Russian Wagner Group will be serving as “guards” for the referendums voting centers.

•  The Economic Community of West African States will meet in Abuja, Nigeria, to discuss Niger's July 26 coup.

• Today is Enthronement Day in Morocco, celebrating the day King Mohammed VI took the throne in 1999.

Economic Reports/Events –

• NSTR

Monday, July 31, 2023

Global

• The foreign ministers of the states of the Organization of Islamic Cooperation will discuss the burnings of the Koran in Sweden and Denmark at an extraordinary virtual meeting. 

• The UN Security Council is scheduled to hold a briefing on threats to international peace and security.

• The UN’s Humanitarian Coordinator in Ukraine, Denise Brown. She will brief reporters virtually on the humanitarian situation in the country, including in Odesa.

• The US assumes the chair of the UN Security Council for the month of August.

Americas

Political/Social Events –

• The US Congress is out of session for the month of August.  The House of Representatives returns on September 12, and the Senate on September 5.

• Former President Trump may face new criminal charges this week by Special Counsel Jack Smith over allegations of his involvement in the January 6th attack on the US Capitol.

• Republican Presidential candidate and Florida Governor Ron DeSantis releases his “Declaration of Economic Independence” during a speech in New Hampshire.

Economic Reports/Events –

• US Chicago PMI (July), Dallas Fed Manufacturing Index (July), Loan Officer Survey

• Mexico GDP (Q2)

• Brazil BCB Focus Market Readout, Private Bank Lending (June), M3 Money Supply (June)

Asia

Political/Social Events –

• NSTR

Economic Reports/Events –

• China NBS Manufacturing & General PMIs (July)

• Japan Retail Sales (June), Industrial Production (July), Consumer Confidence (July), Housing Starts (June), Construction Orders (June)

• India Government Budget Value (June)

• Australia TD-MI Inflation Gauge (July), Housing Credit (June), Private Sector Credit (June),

• Singapore Bank Lending (June), Business Confidence (Q2)

Europe

Political/Social Events –

• EU President von der Leyen travels to the Philippines for meetings with Ferdinand Marcos Jr., President of the Philippines.  While there, she will deliver a keynote speech at the business event “A New Era of EU-Philippines Relations, driven by Stronger Trade and Investment for a sustainable future" in Manila.

Economic Reports/Events –

• ECB Survey of Monetary Analysts, GDP (Q2), Inflation (July), CPI (July)

• Germany Retail Sales (June), Import Prices (June)

• UK Mortgage Lending (June), BoE Consumer Credit (June)

• Italy GDP (Q2), Inflation (July), CPI (July)

• Spain Current Account (May)

• Russia  Monetary Policy Report, M3 Money Supply (June)

Middle East

Political/Social Events –

• Lebanon's Central Bank head Riad Salameh will leave office.  No successor has been named, which is likely to further exacerbate the country’s economic crisis.

• Turkey’s President Erdogan meets Iraqi President Rashid and PM Sudani, Baghdad. Discussions will focus on the resumption of an oil pipeline from the semi-autonomous Kurdistan region to the Turkish port of Ceyhan, the fight against the Kurdistan Workers' Party (PKK), and the water crisis.

Economic Reports/Events –

• Saudi Arabia GDP (Q2), Private Bank Lending (June), M3 Money Supply (June)

• Turkey Tourism Revenues (Q2), Tourist Arrivals (June)

• Pakistan’s Central Bank monetary policy meeting.

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• South Africa Trade Balance (June), FX Reserves (June), Private Sector Credit (June)

• Kenya Inflation (July)

• Uganda Inflation (July)

• Ghana mid-term budget

Tuesday, August 1, 2023 

Global

• NSTR

Americas

Political/Social Events –

• Guyana celebrates Emancipation Day, marking the day when slavery was abolished in 1838.

• TikTok plans to launch its US e-commerce business sometime this week, placing it in competition with Amazon, Shein, and Temu.

Economic Reports/Events –

• US Redbook (July 29), S&P Global Manufacturing PMI (July), ISM Manufacturing PMI (July), JOLTS Job Openings (July), ISM Manufacturing Employment (July), Construction Spending (June), Dallas Fed Services Indexes (July), LMI Logistics Managers Index (July)

• Canada S&P Global Manufacturing PMI (July)

• Mexico FX Reserves (June), Business Confidence (July), S&P Global Manufacturing PMI (July)

• Brazil Central Bank Interest Rate Decision, Industrial Production (June), S&P Global Manufacturing PMI (July), Balance of Trade (July)

Asia

Political/Social Events –

• China’s new export ban on germanium and gallium goes into effect.  Both are critical raw materials used in semiconductors and other electronics. According to Nikkei, the ban is “expected to affect chipmakers and key substrate suppliers, including Coherent, Wolfspeed, and AXT of the U.S.; Israeli-German Freiberger; and Japan's Sumitomo Electric, all of which require those raw materials. The export controls may also have ripple effects down the chip supply chain as, on average in recent years, China has produced 90% of the world's germanium and over 90% of its gallium.”

• China celebrates Army Day, marking the foundation of the Chinese People’s Liberation Army.

Economic Reports/Events –

• Reserve Bank of Australia Statement on Monetary Policy.

• China Caixin Manufacturing PMI (July)

• Japan Unemployment (June), Jibun Bank Manufacturing PMI (July)

• India S&P Global Manufacturing PMI (July)

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

• Australia Judo Bank Manufacturing PMI (July), Home Loans (June), Building Permits (June), CoreLogic Dwelling Prices (July), Commodity Prices (July)

• Indonesia S&P Global Manufacturing PMI (July), Inflation (July), Tourist Arrivals (June)

Europe

Political/Social Events –

• Today is National Day in Switzerland.

Economic Reports/Events –

• Eurozone HCOB Manufacturing PMI (July), Unemployment (June)

• Germany HCOB Manufacturing PMI (July), Unemployment (July)

• France HCOB Manufacturing PMI (July)

• UK Nationwide Housing Prices (July), S&P Global/CIPS Manufacturing PMI (July)

• Spain HCOB Manufacturing PMI (July), New Car Sales (July)

• Italy HCOB Manufacturing PMI (July)

• Russia S&P Global Manufacturing PMI (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Turkey Istanbul Chamber of Industry Manufacturing PMI (July)

Africa

Political/Social Events –

• The Nigeria Labour Congress, a powerful confederation of unions, will strike over fuel subsidies and other economic policies.

• Benin celebrates its Independence Day, marking the day in 1960 when the country gained its independence from France.

• Economic Reports/Events –

• South Africa ABSA Manufacturing PMI (July), Total New Vehicle Sales (July)

• Nigeria PMI (July)

Wednesday, August 2, 2023

Global

• The G20 Ministerial Meeting on Women's Empowerment will be held in Gandhinagar, India.

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• US MBA Mortgage Indexes (July 28), ADP Employment (July), Total Vehicle Sales (July)

• Brazil IPC-Fipe Inflation (July)

Asia

Political/Social Events –

• NSTR

Economic Reports/Events –

• Bank of Japan Monetary Policy Meeting Minutes, Jibun Bank Services & Composite PMIs (July)

• South Korea Inflation (July), CPI (July), Inflation (July)

• Reserve Bank of Australia Chart Pack, Australia Ai Group Indexes (July)

• Singapore S&P Global Manufacturing PMI (July)

• Bank of Thailand Interest Rate Decision

Europe

Political/Social Events –

• Pope Francis begins a six-day visit to Portugal, including visiting the holy shrine of Fatima.

• North Macedonia celebrates Republic Day, marking when there was an uprising against the Ottoman Empire in 1903 as well as the first Anti-Fascist Assembly for the National Liberation of Macedonia in 1944.

Economic Reports/Events –

• Spain Unemployment (July), Tourist Arrivals (June)

• Russia GDP (June), Unemployment (June), Business Confidence (July), Real Wage Growth (May), Retail Sales (June)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Turkey Imports/Exports/Balance of Trade (July), Auto Sales (July)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR 

Thursday, August 3, 2023

Global

• The UN Security Council is scheduled to hold an open debate in connection with “Famine and conflict-induced global food insecurity” under the agenda item “Maintenance of international peace and security.”   US Secretary of State Antony Blinken will chair the session.

Americas

Political/Social Events –

• The six-month-old cease-fire between the Colombian government and the National Liberation Army (ELN) – a rebel group – begins.

Economic Reports/Events –

• Federal Reserve Bank of Richmond President Tom Barkin speaks on “Winning the War on Inflation” at the Shenandoah Valley Partnership, Weyers Cave, Virginia.

• US S&P Services & Composite PMIs (July), ISM Services Reports (July)

• Challenger Job Cuts (July), Nonfarm Productivity (Q2), Initial Jobless Claims (July 29)

• Brazil S&P Services & Composite PMIs (July)

• Argentina Tax Revenue (July)

Asia

Political/Social Events –

• Pakistan’s former Prime Minister Imran Khan's trial in a graft case involving his alleged non-disclosure of assets after selling state gifts resumes.  Protests are expected around the country.

• APEC Food Security Ministers meet in Seattle, Washington.

• Economic Reports/Events –

• China Caixin Services & Composite PMIs (July)

• Japan Jipun Bank Services PMI (July)

• India S&P Global Services & Composite PMIs (July)

• Judo Bank Services & Composite PMIs (July), Imports/Exports/Balance of Trade (June)

• Australia Imports/Exports/Balance of Trade (June), Retail Sales (June)

• Singapore S&P Global PMI (July)

Europe

Political/Social Events –

• Today is the deadline for the European Commission's decision on the Korean Air-Asiana merger.

• In the UK, GMB union members begin a strike at Amazon’s Rugeley fulfillment center in Staffordshire in a dispute over pay. Another two-day strike is planned at the e-commerce company’s Coventry warehouse tomorrow by up to 1,000 staff.

Economic Reports/Events –

• The Bank of England interest rate policy, BoE Monetary Policy Report & Minutes

• ECB Board Member Fabio Panetta gives a speech via webinar on "Getting disinflation right," organized by Bocconi University, Milan 

• Eurozone HCOB Services & Composite PMIs (July), PPIs (June),

• Germany Imports/Exports/Balance of Trade (June), HCOB Services & Composite PMIs (July), New Car Registrations (July)

• UK S&P Global/CIPS Services & Composite PMIs (July)

• France Budget Balance (June), HCOB Services & Composite PMIs (July)

• Spain HCOB Services & Composite PMIs (July)

• Italy HCOB Services & Composite PMIs (July)

• Russia S&P Global Services & Composite PMIs (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• Saudi Arabia Riyad Bank PMI (July)

• Turkey Inflation (July), PPI (July), CPI (July), FX Reserves (July)

Africa

Political/Social Events –

• NSTR

Economic Reports/Events –

• South Africa S&P Global PMIs (July)

• Kenya PMIs (July)

• Ghana PMIs (July)

• Zambia PMIs (July)

• Mozambique PMIs (July)

• Uganda PMIs (July)

Friday, August 4, 2023

Global

• The UN’s Food and Agriculture Organization (FAO) Price Index (July)

• Federal Reserve Bank of New York Global Supply Chain Pressure Index (July)

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• US Unemployment Rate (July)

• Canada Unemployment (July), Ivey PMI (July)

• Mexico Auto Exports (July), Auto Production (July)

• Brazil Car Production (July)

Asia

Political/Social Events –

• Thailand’s Parliament will meet yet again in an effort to choose a prime minister.  But much depends on what the Constitutional Court decides on August 1st as to whether the Move Forward Party Leader Pita Limjaroenrat can be excluded – as the parliament voted to do last week – or if he can stand for the prime minister.

• Japanese Foreign Minister Hayashi Yoshimasa continues a multinational trip across Asia and Africa.  He began the trip on July 27 and is visiting India, Sri Lanka, India, the Maldives, South Africa, Uganda, and Ethiopia. 

• Japan hosts its first joint fighter jet exercises with Italy through Tuesday. 

• The Cook Islands celebrates Constitution Day.

Economic Reports/Events –

• India FX Reserves (July 28)

• Singapore Retail Sales (June)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• Bank of England’s Chief Economist Huw Pill and Fergal Shortall, Director, Policy Analysis, give a Monetary Policy Report Briefing.

• Eurozone HCOB Construction PMI (July), Retail Sales (June)

• Germany Factory Orders (July), HCOB Construction PMI (July)

• France Industrial Production (June) Private Non-Farm Payrolls (Q2), HCOB Construction PMI (July)

• UK S&P Global/CIPS Construction PMI (July), New Car Sales (July)

• Spain Industrial Production (June)

• Italy HCOB Construction PMI (July)

• Russia Vehicle Sales (July)

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Africa:

Political/Social Events –

• Ghana celebrates Founder’s Day, commemorating its struggle for independence from the UK.

Economic Reports/Events –

• Zambia mid-term budget

• Uganda Second Quarter Current Account

Saturday, August 5, 2023 

Global

• NSTR

Americas

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• NSTR

Economic Reports/Events –

• China Current Account (Q2)

Europe

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Middle East

Political/Social Events –

• NSTR

Economic Reports/Events –

• NSTR

Africa

Political/Social Events –

• Today is Burkina Faso Independence Day, marking when the country gained its independence from France.

Economic Reports/Events –

• NSTR

Sunday, August 6, 2023

Global

• NSTR

Americas

Political/Social Events –

• Today is Independence Day in Bolivia, marking when the country declared its independence from Spain in 1825.

• Jamaica celebrates Independence Day, marking the day it gained independence from the UK.

• El Salvador celebrates San Salvador Day, celebrating the Divine Savior for whom the country is named.  It is a national holiday.

Economic Reports/Events –

• NSTR

Asia

Political/Social Events –

• APEC holds a high-level meeting on Health and the Economy in Seattle, Washington.

• Today is the78th anniversary of the atomic bomb being dropped on Hiroshima.

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.

U.S. Financial Regulatory Week Ahead

July 31 - August 4, 2023

Washington became a ghost town today (Friday, July 28th).  The US House of Representatives adjourned Thursday night until September 5, and the US Senate adjourns today until September 5, too.  All the major financial regulators concluded their business this past week before they, too, headed for the beach for August.  Thus, next week is going to be extraordinarily quiet.  The only regulatory meeting we see on the calendar is an SEC closed meeting.

 But regulators kept busy right up to the end of the week, issuing an important joint guidance notice late Friday afternoon.  Specifically, the Federal Reserve, FDIC, OCC, and National Credit Union Administration issued updated guidance to ensure banks and credit unions understood their ability to use the Fed’s discount window (You can read the guidance statement HERE.).  The reason for the notice now is there have been questions as to whether prompt usage of the discount window could have fended off the collapse of Silicon Valley Bank.

Also, this past week, the big event was the release of new proposed bank capital standards by the FDIC and Federal Reserve.  The only big surprise from the proposal was news that Fed Chair Jay Powell had voiced concerns about the proposal.   Powell voted in favor of the proposal, but two other Fed Governors, Michelle Bowman and Christopher Waller, voted no.  Congressional opponents of the proposal quickly picked up on Powell’s reticence and the two “no” votes and are now planning hearings in September demanding statistical analysis of how the proposal was crafted.  We will keep you updated on that as soon as they are scheduled.

Also happening this past week was the Financial Stability Oversight Council (FSOC) meeting on Friday to consider several issues, including the transition from LIBOR, climate-related regulations, and updates on the mortgage market.   No major proposals came from it.  You can review the Treasury Department’s official Readout of the meeting HERE.

Below is what else is happening in the US regulatory world next week (which is, as we said above, pretty much nothing):

U.S. Congressional Hearings

• Both the House of Representatives and Senate are in Summer recess until September 5, 2023.  There are no hearings scheduled.

US Regulatory Meetings

• Thursday, August 3/2:00 p.m. – The US Securities and Exchange Commission holds a closed meeting.

• NOTE: The Federal Reserve, Commodities Futures Trading Commission, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, Consumer Financial Protection Bureau,  and National Credit Union Administration have no major meetings or speeches scheduled this coming week.

Think Tank Events

•  There are no think tank events of note this coming week focused on financial services or financial regulation.