Global Challenges Impacting U.S. Agricultural Exports

A Changing Geopolitical Landscape is Proving Challenging to America’s Farmers

I had the great privilege of addressing the Iowa Soybean Association on January 29, 2024, in Des Moines, Iowa. America’s farmers are, in many ways, more keenly focused on - and deeply understanding of - geopolitical risk than just about any other profession. What happens in the Red Sea or in the Panama Canal has a direct impact on their product and delivery - and inflationary pressures here in the US, in significant parts of Asia, and in the EU (see map below):

Below is the full presentation that served, I am proud to say, as the groundwork for a lively and really fun discussion with the attendees. Thank you, Iowa Soybean Association, for having me. I really enjoyed it!

The Global Week Ahead

January 28 - February 4, 2024

This coming week, the Gaza War will likely dominate geopolitical attention. Senior intelligence officials from Israel, the US, and Egypt, along with the Qatari Prime Minister, will gather to discuss efforts to reach a deal with Hamas on the release of Israeli hostages. On the table is a possible two-month pause in fighting in return for the hostages. 

 CIA Director Bill Burns, Mossad Director David Barnea, Egyptian intelligence chief Abbas Kamel, and Qatari Prime Minister Sheik Mohammed bin Abdulrahman al-Thani will meet in a still-undisclosed location in Europe to negotiate all this and perhaps more: Hamas is also demanding a number of Palestinian prisoners be released as part of the deal, many of them reportedly some of the most dangerous and violent terrorists in prison.  The question markets will ask: If an agreement is reached, will it also create at least a temporary suspension of Houthi attacks on commercial shipping in the Red Sea?  

Also this week, NATO Secretary General Jens Stoltenberg will travel to the US for high-level meetings with senior Biden Administration officials, all four Congressional leaders, give a speech at the conservative think tank, the Heritage Foundation (which has been a critic of continued military aid to Ukraine) all as a part of an effort to unlock the frozen Congressional funding legislation for Ukraine (as well as Israel).

That effort has been tripped up by efforts to find a compromise measure on more significant US border security measures, which, at this point, appear to be dead as House Speaker Michael Johnson (R-LA) sent a letter to colleagues stating what he understood to be the likely points of agreement to small and unworkable. 

Ukraine aid will also be a major issue in the EU this week as there will be a special meeting of the European Council in Brussels to consider a $54 billion financial aid package for the beleaguered country. 

In Latin America this week, two significant events are worth markets watching closely: First, Argentinean President Javier Milei’s massive fiscal reform package will be considered by the Argentinian Congress. Milei is facing enormous push-back from labor unions opposing his plan, with more than 80,000 union members taking to the streets last week in protest. 

The second event is that the US is likely to announce whether they will “snap back” on an agreement (the Barbados Agreement) reached with Venezuela in October 2023 granting a relaxation of US sanctions on the regime in return for allowing free and fair elections. Venezuelan President Nicholás Maduro, while freeing some political opponents from jail, has effectively flaunted the agreement ever since, denying the ability of anyone to run against him in elections, arresting other political opponents, and significantly raising tensions in the region by threatening to invade neighboring Guyana. Reimposing sanctions on Venezuela will likely have a measurable impact on global oil prices. 

Finally, turning back to the US, presidential politics are increasingly going to dominate the focus of markets in the weeks ahead now that the Republican New Hampshire Presidential primary is behind us. All eyes are now turning to South Carolina. Democrats hold their first primary in the Palmetto State this coming Saturday, where President Biden’s victory is assured. Republicans have their primary on February 24th, but there is one Republican primary before it: Nevada on February 8th, where former President Trump is expected to win soundly.  

Looking at the global economic radar screen this week, all eyes will be glued to the Federal Reserve’s Open Market Committee meeting and Fed Chair Jay Powell’s subsequent press conference for the slightest hint of interest rates coming down. The Bank of England is also meeting this week to consider rates.  

Many important economic reports are coming out this week, too.  The US markets will be looking at the US labor market report on Friday and the Conference Board’s consumer confidence index on Tuesday. Additionally, the US Treasury Quarterly Refunding Announcement comes out Wednesday (for a great inside look at who and how that is done, this Wall Street Journal profile is fun and informative: “The Most Important Man in Finance You’ve Never Heard Of”).  

Several CPI prints are released in the EU along with Eurozone and German GDP results. In Asia, China’s official CPI and Caixin CPI reports are released, and in Japan, markets will be watching industrial production and consumer confidence report results.  

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

Sunday, January 28, 2024

Global

• Nothing significant to report.

Americas

Political/Social Events –

•  Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• China’s month-long Lunar New Year travel season begins this weekend.  An estimated 1.8 billion trips by mass transit and 7 billion trips by car are expected.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Finland holds presidential elections.  Center-Right candidate Alexander Stubb is leading slightly in polls against Green Party leader Pekka Haavisto.   If there is a need for a run-off, it will be held on February 11.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Senior US, Israeli, Qatari, and Egyptian officials are expected to meet in Europe(exact location not disclosed) this weekend to discuss ongoing negotiations with Hamas for the release of Israeli hostages. CIA Director William Burns, Mossad Director David Barnea, Egyptian Intelligence Director Abbas Kamel, and Qatari Prime Minister Sheikh Mohammed Al Thani are expected to attend. 

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• The Italy-Africa Summit will be held in Rome, Italy.  Leaders from Africa will meet with Italian Prime Minister Georgia Meloni to discuss a number of issues, particularly migration issues.  EU President Ursula von der Leyen will also participate.

Economic Reports/Events –

• Nothing significant to report.

Monday, January 29, 2024

Global

• The UN Security Council is scheduled to hold a briefing on ICC Sudan.

• At the UN, the World Food Programme (WFP) and the Permanent Mission of Germany to the United Nations are organizing a panel discussion titled Strengthening the Resilience of Agricultural Systems and Food Security in the Sahel. 

Americas

Political/Social Events –

• NATO Secretary General Jens Stoltenberg will travel to the US for meetings with Secretary of State Antony Blinken and the Secretary of Defense Lloyd J. Austin III, as well as U.S. National Security Advisor Jake Sullivan. On January 30, he will meet with the Speaker of the House of Representatives, Mike Johnson, Democratic Leader of the House, Hakeem Jeffries, Republican Leader of the Senate, Mitch McConnell, as well as other Democratic and Republican Representatives and Senators.  Then on January 30, he will deliver a speech at the Heritage Foundation. On the same day, he will also travel to Troy, Alabama, and visit the Missiles and Fire Control Facility of Lockheed Martin. He will wrap up his visit to the US on February 1 when he goes to Tampa, Florida, to visit the headquarters of the US Special Operations Command.

• Colombia’s latest six-month cease-fire with the Marxist insurgent National Liberation Army group is set to expire.

Economic Reports/Events –

• US Dallas Fed Manufacturing Index (January)

• Brazil Gross Debt to GDP (December), Nominal Budget Balance (December), BCB Focus Market Readout

Asia

Political/Social Events –

• Philippine President Ferdinand Marcos Jr. will visit Vietnam through Jan. 30.  While there, he is expected to sign a coastguard deal with Vietnam boosting cooperation between the two countries.  China is strongly opposed to the deal.

• Hong Kong's High Court will hear a winding-up petition for troubled Chinese property developer Evergrande Group.

Economic Reports/Events –

• Vietnam Balance of Trade (January), Industrial Production (January), Inflation (January), Retail Sales (January), Tourist Arrivals (January)

• Singapore Monetary Policy Statement, Export & Import Prices (December), PPI (December)

• Thailand New Car Sales (December)

• Pakistan Central Bank Interest Rate Decision

Europe

Political/Social Events –

• The 15th meeting of the Accession Conference with Montenegro will be held in Brussels.  The intergovernmental conference will provide a forum for political dialogue between the EU member states and Montenegro on the country’s reforms, take stock of the overall accession process, and provide political steer for future work. The focus of the meeting is expected to be on the key reforms that would allow Montenegro to make further progress in its accession process.

• Georgia's ruling party will hold its first meeting with the parliamentary opposition on implementing the European Commission's requirements to begin EU membership negotiations.

• The EU General Affairs Council meets in Brussels.  On the agenda is a discussion of the defense of democracy and the annual rule of law dialogue.

Economic Reports/Events –

• ECB Board Vice President Luis de Guindos gives at the Investment Outlook Conference organized by Citi Private Bank in Madrid, Spain.

• Bank of England Director of Financial Stability, Strategy, and Risk Lee Foulger speaks at the AFME/DealCatalyst European Direct Lending & Middle Market Finance Conference in London.

• Ireland Consumer Confidence (January), Retail Sales (December)

Middle East

Political/Social Events –

• Iranian Foreign Minister Hossein Amirabdollahian will meet with Pakistani Foreign Minister Jalil Abbas Jilani in Pakistan to improve ties.  The meeting comes after the Iranian Air Force conducted raids on January 18 against Baluch militant groups and subsequent retaliatory air strikes by Pakistani fighters against militants hiding inside Iran.

• Turkey's opposition Nationalist Movement Party will launch its election campaign ahead of the March local elections. Istanbul’s Mayor Ekrem Imamoglu is running for re-election as Mayor in the March 31 local election and is seen as a likely opponent to incumbent President Recep Tayyip Erdogan in national elections.

Economic Reports/Events –

• Israel M1 Money Supply (December)

• Qatar GDP (Q3), Balance of Trade (December)

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

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Zimbabwe Inflation Rate (January)

Tuesday, January 30, 2024 

Global

• The IMF releases its Economic Outlook update in Johannesburg, South Africa.

• The UN Security Council is scheduled to hold an adoption of the United Nations Peacekeeping Force in Cyprus (UNFICYP); this will be followed by a meeting in the Middle East. In the afternoon, there will be consultations at the United Nations Regional Center for Preventive Diplomacy for Central Asia (UNRCCA).

• The UN Environment Programme Finance Initiative (UNEP FI) is hosting its Regional Roundtable on Sustainable Finance for Latin America and the Caribbean on 30-31 January in Bogotá, Colombia.

Americas

Political/Social Events –

• Argentina's lower house of Congress will vote on President Javier Milei's omnibus reforms.  The massive reform package is facing widespread opposition from unions and Milei’s political opponents. 

• The US State Department is expected to reveal whether the US will reimpose sanctions on Venezuela for failing to comply with the terms of an agreement that allowed the relaxation of US sanctions on the country in return for free and fair elections – something Venezuelan President Maduro effectively flaunted within days of the agreement, denying opposition candidates the opportunity to run.

• The EU-U.S. Trade and Technology Council summit will take place at the U.S. State Department in Washington, D.C.   they are expected to discuss discussions around sustainable trade and artificial intelligence, among other issues.

• US Commerce Secretary Gina Raimondo will join Margrethe Vestager, Executive Vice President of the European Commission for Europe, to discuss US-EU trade and technology policy at the Atlantic Council in Washington, D.C.  

Economic Reports/Events –

• US Redbook (January 27), S&P/Case Shiller Home Price Index (November), JOLTs Job Openings (December), the Conference Board’s Consumer Confidence (January), Dallas Fed Services Index (January), Dallas Fed Services Revenues Index (January)

• Brazil IGP-M Inflation (January)

• Mexico GDP (Q4), Fiscal Balance (December)

• Chile Unemployment (December)

• El Salvador Balance of Trade (December)

Asia

Political/Social Events –

• Japanese Prime Minister Fumio Kishida will give a policy speech for the new 150-day parliamentary session.  Kishida and his LDP Party is facing heavy scrutiny over an alleged slush fund scandal.  Kishida is seeking an early passage of a draft budget for the fiscal year starting in April worth ¥112.57 trillion ($762 billion), which was increased in the wake of the quake that hit the Noto Peninsula on the Sea of Japan coast.

• Philippine President Ferdinand Marcos Jr. will visit Vietnam through Jan. 30.

Economic Reports/Events –

• Japan Unemployment (December)

• Australia Retail Sales (December)

• Philippines PPI (December)

• Taiwan Consumer Confidence (January)

Europe

Political/Social Events –

• There will be an informal meeting of EU Defense Ministers through January 31 in Brussels.  meetings will allow the Defense Ministers to make presentations on the key defense challenges facing their countries.

Economic Reports/Events –

• ECB Board Member Philip R. Lane gives opening remarks at a conference entitled 'A year with the euro in Croatia' organized by Hrvatska narodna banka in Zagreb, Croatia.

• ECB Board Member Anneli Tuomine participates in a webinar organized by European Banking Institute on book launch: "Artificial Intelligence and Market Abuse".

• Eurozone GDP (Q4), Economic Sentiment (January), Consumer Confidence (January), Consumer Inflation Expectations (January), Industrial Sentiment (January), Selling Price Expectations (January), Services Sentiment (January)

• Germany GDP (Q4)

• UK BoE Consumer Credit (December), Mortgage Approvals & Lending (December)

• Ireland GDP (Q4), Wholesale Prices (December)

• Greece PPI (December)

• Italy PPI (December)

• France GDP (Q4), Household Consumption (December)

• Switzerland Balance of Trade (December), KOF Leading Indicators (January)

• Spain GDP (Q4), Inflation (January), Business Confidence (January)

• Hungary Central Bank Interest Rate Decision

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Saudi Arabia Imports/Exports/Balance of Trade (November), M3 Money Supply (December), Private Bank Lending (December)

• Turkey Economic Confidence Index (January)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Zambia M3 Money Supply (December), Private Sector Credit (December), Budget Balance (December)

Wednesday, January 31, 2024

Global

• the Security Council is scheduled to hold a briefing on the 2140 Committee and another briefing on ICC Libya.

•  The UN Committee on the Exercise of the Inalienable Rights of the Palestinian People will convene the first Committee Meeting of the year. At this meeting, the UN Secretary–General, António Guterres, will preside over the Bureau elections, and the Committee will adopt its Programme of Work for 2024. The Permanent Representative of South Africa and the Director of the UNRWA Representative office in New York are expected to brief.

Americas

Political/Social Events –

• US Trade Representative Kathrine Tau will meet with European Commission officials in Brussels through February 1.  While there, Ambassador Tai will participate in a fireside chat at the Antitrust, Regulation, and the Next World Order Conference hosted by Cristina Caffarra and the Capitol Forum. More information can be found on the conference website.  On February 1, Ambassador Tai will meet with the European Commission Executive Vice-President for the European Green Deal Maroš Šefčovič. Ambassador Tai will also meet with European Justice Commissioner Didier Reynders.

• The US House Select Committee on the Chinese Communist Party will hold a hearing entitled “The CP Cyber Threat to the American Homeland and National Security.”  FBI Director Christopher Wray, General Paul Nakasone, Commander, United States Cyber Command, Jen Easterly, Director, Cybersecurity and Infrastructure Security Agency, Harry Coker, Jr., Director, Office of the National Cyber Director, will testify.

Economic Reports/Events –

• US Federal Reserve Open Market Committee Interest Rate Decision and press conference.

• US MBA Mortgage Market Index (January 28), ADP Employment Change (January), Treasury Refunding Announcement, Chicago PMI (January), EIA Crude Oil Stocks (January 26)

• Canada GDP (November & December)

• Brazil Unemployment (December), Central Bank Interest Rate Decision, Net Payrolls (December)

• Chile Copper Production (December), Industrial Production (December), Manufacturing Production (December), Retail Sales (December), Central Bank Interest Rate Decision

• Uruguay Balance of Trade (December)

• Colombia Central Bank Interest Rate Decision, Unemployment (December), Cement Production (December)

Asia

Political/Social Events –

• In Thailand, the Constitutional Court will rule whether opposition lawmaker Pita Limjaroenrat and his Move Forward Party conspired to overthrow Thailand's system of constitutional monarchy through its signature policy of amending laws that criminalize royal insult.

• Today is Nauru Independence Day, marking when the nation declared independence in 1968.

Economic Reports/Events –

• China NBS Manufacturing PMI (January), NBS General PMI (January)

• Bank of Japan Summary of Opinions released, Industrial Production (December), Retail Sales (December), Consumer Confidence (January), Housing Starts (December), Construction Orders (December)

• India Government Budget Value, Infrastructure Output (December)

• South Korea Industrial Production (December), Retail Sales (December)

• Australia Inflation (Q4), Housing Credit (December), CPI (Q4), Private Sector Credit (December)

• Taiwan GDP (Q4)

• Hong Kong GDP (Q4)

• Philippines Full Year GDP (2023), GDP (Q4)

• Singapore Bank Lending (December), Unemployment (Q4), Business Confidence (Q4)

• Thailand Industrial Production (December), Current Account (December), Private Consumption (December), Private Investment (December)

• Sri Lanka Inflation (January)

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• ECB Bank Lending Survey

• Germany Retail Sales (December), Import Prices (December), Unemployment (January), Inflation (January)

• France Inflation (January), PPI (December)

• Italy Unemployment (December), Industrial Production (November)

• Ireland Inflation (January)

• Spain Retail Sales (December), Current Account (November)

• Hungary PPI (December)

• Switzerland Retail Sales (December), Economic Sentiment Index (January)

• Poland Full Year GDP (2023)

• Greece Retail Sales (November)

• Ukraine Current Account

• Russia Industrial Production (December), M2 Money Supply (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Saudi Arabia GDP (Q4)

• Turkey Imports/Exports (December), Tourist Revenues (Q4), Tourist Arrivals (December)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nigeria FX Reserves (January)

• South Africa Balance of Trade (December)

• Mozambique Central Bank Interest Rate Decision

Thursday, February 1, 2024

Global

• OPEC+ Ministerial Meeting to discuss oil production levels.  No decision is expected at this meeting.

• Guyana takes the chair of the UN Security Council for the month of February.

Americas

Political/Social Events –

• In Cuba, a significant increase in the price of gasoline goes into effect.  As the Center for Strategic and International Studies reported this past week, Cuba has faced a steep decline in tourism revenue following the Covid-19 pandemic, exacerbated by high global fuel prices caused by the war in Ukraine, which have contributed to years of chronic fuel shortages, resulting in frequent blackouts and long queues at gasoline pumps in what analysts have described as “the worst financial position it has been in since the collapse of the Soviet Union.” Starting in February, the regime announced that gasoline prices would increase by over 500 percent due to the government’s inability to continue sales at current subsidized prices.

Economic Reports/Events –

• US Challenger Job Cuts (January), Initial Job Cuts (January), S&P Manufacturing PMI (January), ISM Manufacturing PMI (January), Construction Spending (December), ISM Manufacturing New Orders (January), ISM Manufacturing Prices (January), EIA Natural Gas Stocks (January 26)

• Canada S&P Global Manufacturing PMI (January)

• Brazil PPI (December), S&P Global Manufacturing PMI (January), Balance of Trade (January)

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

• Chile IMACEC Economic Activity (December)

• Colombia Davivienda Manufacturing PMI (January)

• Argentina Central Bank Interest Rate Decision, Tax Revenues (January)

Asia

Political/Social Events –

• Taiwan's legislature, which is effectively a hung parliament between three parties, will open its spring session and meet to select the president and vice president of the legislature.  In the elections, the Kuomintang (KMT) won 52 seats, the Democratic Progressive Party (DPP) secured 51, and the Taiwan People’s Party (TPP) won eight.

• Indian Finance Minister Nirmala Sitharaman is set to present an interim national budget just before the country's general election in April-May.

• Today is Federal Territory Day in Malaysia, marking the day Kuala Lumpur was transferred from the state of Selangor to the Federal Government.  Financial Markets are closed.

Economic Reports/Events –

• China Caixin Manufacturing PMI (January)

• Japan Jibun Bank Manufacturing PMI (January)

• India HSBC Manufacturing PMI (January)

• Hong Kong Retail Sales (December)

• South Kora Imports/Exports/Balance of Trade (January)

• Australia Judo Bank Manufacturing PMI (January), Building Permits (December), Import & Export Prices (Q4), Private House Approvals (December), CoreLogic Dwelling Prices (January), Commodity Prices (January)

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

• Philippines S&P Global Manufacturing PMI (January)

• Thailand S&P Global Manufacturing PMI (January)

• Vietnam S&P Global Manufacturing PMI (January)

• Pakistan Consumer Confidence (December & January), Balance of Trade (January), Inflation (January), Wholesale Prices (January)

• Sri Lanka Balance of Trade (December)

• Kazakhstan Current Account (Q4), Tengri Partners Manufacturing PMI (January), Inflation (January)

Europe

Political/Social Events –

• Swedish Prime Minister Ulf Kristersson will meet Hungarian Prime Minister Viktor Orban in Brussels, Belgium, to discuss Hungary's ratification of Sweden's bid to join NATO.  Orban has been holding up Sweden’s membership in NATO.  Turkey just ratified Sweden’s accession last week.

• There will be a special meeting of the European Council in Brussels. The most pressing item on the agenda will be the approval of long-term funding for Ukraine – an estimated $54 billion financial aid package. Also, the meeting is a follow-up to the European Council meetings of December 14-15, and they will now discuss the mid-term revisions to the EU long-term budget 2021-2027.  

Economic Reports/Events –

• ECB Board Member Philip R. Lane gives remarks at an event organized by Einaudi Institute for Economics and Finance (EIEF) in Rome, Italy.

• Eurozone HCOB Manufacturing PMI (January), Inflation (January), Unemployment Rate (December), CPI (January)

• Germany HCOB Manufacturing PMI (January)

• France HCOB Manufacturing PMI (January)

• Bank of England Interest Rate Decision and Meeting Minutes, UK Nationwide Housing Prices (January), S&P Global Manufacturing PMI (January), Labor Productivity (Q3)

• Italy HCOB Manufacturing PMI (January)m Inflation (January)

• Ireland AIB Manufacturing PMI (January)

• Poland S&P Global Manufacturing PMI (January)

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

• Greece S&P Global Manufacturing PMI (January), Unemployment (December)

• Switzerland procure.ch Manufacturing PMI (January)

• Romania Unemployment (December)

• Hungary HALPIM Manufacturing PMI (January)

• Russia S&P Global Manufacturing PMI (January)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Egypt Central Bank Interest Rate Decision, M2 Money Supply (December), Overnight Lending Rights

• Turkey MPC Meeting Summary, Istanbul Chamber of Industry Manufacturing PMI (January), FX Reserves (January 26)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nigeria Stanbic IBTC Bank Nigeria PMI (January)

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

Friday, February 2, 2024

Global

• Nothing significant to report.

Americas

Political/Social Events –

• It’s Groundhog Day!  Will Punxsutawney Phil see his shadow, predicting six more weeks of winter?

Economic Reports/Events –

• US Non-Farm Payrolls (January), Participation Rate (January), Factory Orders (December), Michigan Consumer Sentiment (January), Michigan 5-Year Inflation Expectations (January), Michigan Current Conditions (January), Baker-Hughes Oil Rig Count (February 2), Total Vehicle Sales (January)

• Brazil IPC-Fipe Inflation (January), Industrial Production (December)

• Mexico FX Reserves (December)

• Paraguay Inflation (January)

• Costa Rica Unemployment (Q4)

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• India FX Reserves (January 26)

• South Kora Inflation (January), CPI (January)

• Australia Home Loans (January), Investment Lending for Homes (December), PPI (Q4)

• Singapore SIPMM Manufacturing PMI (January)

Europe

Political/Social Events –

• The EU-ASEAN Ministerial meeting will take place in Brussels. 

• There will be an informal meeting of EU Foreign Affairs Ministers in Brussels.

• The German Bundestag is expected to finalize a new budget in the wake of an unexpected ruling from the German Constitutional Court last November, forcing a massive rewrite and brief fiscal crisis for the country.

Economic Reports/Events –

• ECB Survey of Professional Forecasters

• France Industrial Production (December), Budget Balance (December), New Car Registrations (January)

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

• Switzerland Consumer Confidence (Q1)

• Romania PPI (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

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

Africa:

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Saturday, February 3, 2024

Global

• Nothing significant to report.

Americas

Political/Social Events –

• The Democratic Party holds its first presidential primary in South Carolina.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Sunday, February 4, 2024

Global

• Nothing significant to report.

Americas

Political/Social Events –

• El Salvador holds presidential and legislative Elections. Current President Nayib Bukele and Vice President Felix Ulloa are expected to be re-elected.

• Facebook turns 20 years old today.

• Costa Rica holds municipal elections.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• Today is National Day in Sri Lanka, celebrating the island nation’s independence from Great Britain in 1972.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• Today is Angola Independence Day, celebrating when the nation gained independence from Portugal in 1975.

Economic Reports/Events –

• Nothing significant to report.

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

Recommended Weekend Reading

January 26 - 28, 2024

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

The Americas

• “2023: A Year of Mexican Oil to Cuba”  Center for Strategic and International Studies

  Cuba is in a deep energy crisis. A steep decline in tourism revenue following the Covid-19 pandemic, exacerbated by high global fuel prices caused by the war in Ukraine, has contributed to years of chronic fuel shortages, resulting in frequent blackouts and long queues at gasoline pumps in what analysts have described as “the worst financial position it has been in since the collapse of the Soviet Union.” Starting in February, the regime announced that gasoline prices will increase by over 500 percent due to the government’s inability to continue sales at current subsidized prices.  The functioning of the Cuban economy hinges on imported petroleum. In the 1980s, Cuba depended on the USSR to supply 98 percent of its crude oil needs. Following the end of Soviet subsidies, Cuba’s so-called Special Period—a decade of widespread food rationing, mass outward migration, and paralysis of the country’s industrial and agricultural sectors—ended only after Hugo Chávez’s Venezuela agreed to barter its crude oil in exchange for Cuban doctors, teachers, and military advisors in the early 2000s.

International Economics

•   “De-dollarization reshaping central bank reserves in 2024”   OMFIF Research

  De-dollarisation has grabbed headlines as the expanded Brics bloc plans for a common currency, reducing reliance on the dollar. Though a BRICS currency is unlikely to threaten the dollar's dominance soon, it signals geopolitics will increasingly shape reserve management.  Key findings from OMFIF's Global Public Investor report, based on a survey of 75 managers controlling nearly $5tn in reserves, include: 

  • Dollar's share of reserves is expected to gradually fall five percentage points but remain above 50%

  • Renminbi likely to rise from nearly 3% now to 6% of reserves in a decade

  • Sub-Saharan Africa and Asia Pacific central banks shifting from dollar to renminbi

• “How the Fed Should Deal with Forecasting Errors”  Peterson Institute for International Economics

  Like many other central banks around the world, including the Federal Reserve, the Bank of England failed to anticipate the inflation surge of 2021 and 2022. Now Ben S. Bernanke, former chair of the Federal Reserve, has been commissioned by the Bank of England to review the Bank’s “forecasting and related processes during times of significant uncertainty.” The Financial Times reports [paywall] that, unsurprisingly, the European Central Bank and the Fed have also undertaken similar, albeit less formal, retrospective looks at what went wrong and how they might do better. The Bank of England’s move to commission a formal report prompts an interesting thought experiment: If the Federal Reserve were to request a similar outside review of its forecasting operations, what should it say?

Indo-Pacific

• “Operationalising strategic risk reduction in the Asia-Pacific Region: An Australian Perspective”   European Leadership Network

  Australia is on track to spend a historic $A50 billion on defense expenditures in 2024. A new report from the European Leadership Network (ELN) and the Asia-Pacific Leadership Network(APLN) finds that Australia’s deterrence-heavy defense strategy may, in fact, heighten the risks of inadvertent escalation rather than mitigate them and, in doing so, is creating ripe conditions for conflict in the Asia-Pacific. 

The Middle East, Israel, and the Gaza War

• “US Aid to Israel in Four Charts”  Council on Foreign Relations

  Israel, the United States closely ally in the Middle East, has been the largest cumulative recipient of U.S. foreign aid since its founding, receiving about $300 billion (adjusted for inflation) in total economic and military assistance. The United States has also provided large foreign aid packages to other Middle Eastern countries, particularly Egypt and Iraq, but Israel stands apart.

• “Israel does not want a war with Iran”  Al-Monitor Pro Podcast

  The assassination of Hamas' number two man in Beirut has deepened concerns that the conflict in Gaza will engulf neighboring Lebanon. However, Esther Solomon, the editor-in-chief of Haaretz English, dismisses the idea that Israel wants to provoke a war with Iran that would drag on the United States.

• “Were the Saudis Right About the Houthis After All?   The Atlantic

  The Houthis are a potent Iranian proxy group, and their slogan, adapted from Iranian revolutionary propaganda, is being made manifest in action. They’ve attacked Red Sea shipping lanes more than 30 times since October 17, under the implausible pretext of aiding Hamas and protesting Israeli military actions in Gaza. Washington long-held, against Saudi protestations, that the Houthis didn’t or couldn’t possibly pose a significant threat beyond Yemen. Now the United States is leading a large coalition of countries determined to restore maritime security against Houthi piracy in the Red Sea. Surely those behind Washington’s efforts are asking themselves: Were the Saudis right about the Houthis all along?

Energy

• “Winter Reliability, A Growing Not Passing Problem”  The Power Line

  The nation’s electric power grids have emerged largely unscathed from a continent-spanning snap of cold weather and winter storms this winter. This outcome stands in stark contrast to previous bulk power system failures, with grid operators resorting to load shedding in December 2021 during Winter Storm Uri and in February 2022 during Winter Storm Elliot. Though this round avoided system failures, narrow margins of error were everywhere. Across the country, winter reliability scares have now emerged as an annual tradition, one that bodes ill for the nation’s energy systems and the economic engine they power.

Map of the Week

U.S. Bases in the Middle East

As tensions grow in the Middle East – the Houthi attacks on commercial shipping in the Red Sea, Iranian proxy militias attacking U.S. troops in Syria and Iraq – we have gotten a number of questions about the size of the U.S. military presence in the region.  The American Security Project offers an excellent map detailing where known U.S. military facilities are located in the region.  As of 2022, there are more than 170,000 U.S. troops stationed outside the United States, and as of June 2023, there are more than 30,000 US troops stationed in the Middle East alone.

U.S. Financial Regulatory Week Ahead

January 28 - February 2, 2024

It is going to be another busy week next week in the financial regulatory space in Washington, D.C., coming off a week shortened by snow and cold (it is now 75 degrees outside as I write this note – it was 7 degrees five days ago), the most important event in the coming week is likely to be Acting Comptroller of the Currency Michael Hsu's speech at the University of Michigan on Monday where he will discuss banker merger policy. 

Bank merger policy has been a hot topic among bank regulators for months, notably since the Department of Justice's Assistant Attorney General for Antitrust Jonathan Kanter effectively announced the Antitrust Division would subsequently engage in bank merger reviews.  Usually, the Antitrust Division would go along with whatever the Federal Reserve decided, but no more.  And with the Antitrust Division's decision to engage effectively brings the Federal Trade Commission (FTC) into the process, too (and one of the main reasons we include activities at the Antitrust Division and FTC in our weekly Financial Regulatory Week Ahead).

Also of note this coming week, the Senate Banking Committee will hold two important hearings, one on fraud in the banking system and the other examining the role of artificial intelligence and housing. 

Over on the House side, The House Financial Services Financial Institutions and Monetary Policy Subcommittee will hold a hearing entitled "Rules Without Analysis: Federal Banking Proposals Under the Biden Administration."  This will likely be another blast at the Fed's proposed bank capital rules.

Finally, Treasury Secretary Janet Yellen will testify before the House Financial Services Committee and the Senate Banking Committee in two weeks (February 6 & 8) to present the Financial Stability Oversight Council's annual report to Congress.  You can expect some fireworks at both hearings as some members are likely to press Yellen hard on bank merger policy (making OCC Director Hsu's comments this week particularly timely), the Consumer Financial Protection Bureau's just announced proposed rule on junk fees on bank accounts (which is already getting hit with hard criticism from the banking sector), and the proposed capital rules we just alluded to above.  

Below is a listing of all the issues and events U.S. regulators are engaged in this week, along with relevant think tank and trade association events.  Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

• January 31, 10:00 a.m. – The Senate Budget Committee holds a hearing on "A Blueprint for Prosperity: Expanding Housing Affordability."

• January 31, 10:00 a.m. – The Senate Banking, Housing and Urban Affairs Housing, Transportation, and Community Development Subcommittee hold a hearing on "Artificial Intelligence and Housing: Exploring Promise and Peril.”

• February 1, 10:00 a.m. – The Senate Banking Committee holds a hearing on “Examining Scams and Fraud in the Banking System and Their Impact on Consumers”

House of Representatives

• January 30, 10:00 a.m. – The House Financial Services National Security, Illicit Finance, and International Financial Institutions Subcommittee holds a hearing on "Better Investment Barriers: Strengthening CCP (Chinese Communist Party) Sanctions and Exploring Alternatives to Bureaucratic Regimes."

• January 30, 10:30 a.m. – The House Energy and Commerce Oversight and Investigations Subcommittee holds a hearing on "Fighting the Misuse of Biden's Green Bank Giveaway."

• January 31, 10:00 a.m. – The House Budget Committee holds a hearing on "Creating a Culture of Fiscal Responsibility: Assessing the Role of the Congressional Budget Office."

• January 31, 10:00 a.m. – The House Financial Services Financial Institutions and Monetary Policy Subcommittee holds a hearing on "Rules Without Analysis: Federal Banking Proposals Under the Biden Administration."

• January 31, 11:00 a.m. – The House Select Strategic Competition Between the United States and the Chinese Communist Party Committee holds a hearing on "The CCP Cyber Threat to the American Homeland and National Security."

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• January 30 & 31:  The Federal Reserve’s Open Market Committee meets to discuss the economy and interest rates.  Fed Chair Jay Powell will hold a press conference on January 31 following the conclusion of the meetings at 2:30 p.m.

U.S. Treasury Department

• January 30, 9:00 a.m. – The Treasury Department holds a closed meeting of the Debt Management Advisory Committee for discussions and debates of the issues presented to the committee by the Secretary of the Treasury and the making of recommendations of the Committee to the Secretary.

• February 1, 2:00 p.m. – The Treasury Department holds a meeting of the Advisory Committee on Risk-Sharing Mechanisms to address topics related to the role of nongovernmental mechanisms in supporting the terrorism risk insurance market.

Office of the Comptroller of the Currency

• January 29, 11:00 a.m. – Acting Comptroller of the Currency Michael Hsu will give a speech on bank consolidation and merger policy at the University of Michigan in Ann Arbor, Michigan.

Securities and Exchange Commission

• January 31, 10:00 a.m. – The SEC holds an Open Meeting to consider new regulations around the definition of “As a Part of a Regular Business” in the Definition of Dealer and Government Securities Dealer in Connection with Certain Liquidity Providers.

• February 1, 2:00 a.m. – The SEC will hold a closed meeting.

Commodities Futures Trading Commission

• January 28 - Commissioner Kristin N. Johnson will participate in the Commodity Market Council’s Board of Directors and Executives Meeting at the 2024 State of the Industry Conference and Annual Meeting in Fort Lauderdale, Florida.

• January 28, 7:00 p.m. – CFTC Chairman Rostin Behnam will give a keynote speech at the CMC State of the Industry 2024 Annual Meeting in Fort Lauderdale, Florida.

• January 29: CFTC Commissioner Christy Goldsmith Romero will address the Commodity Market Council’s Board of Directors and Executives at the 2024 State of the Industry Conference and Annual Meeting in Fort Lauderdale, Florida.

• February 1, 9:10 a.m. – CFTC Commissioner Christy Goldsmith Romero will participate in a fireside chat at the Digital Assets at Duke conference at Duke University’s Pratt School of Engineering and the Duke Financial Economics Center, Durham, North Carolina.

Federal Deposit Insurance Corporation

• No significant events are scheduled or have been announced at this time.

The Consumer Financial Protection Bureau

• No significant events are scheduled or have been announced at this time.

National Credit Union Administration

• No significant events are scheduled or have been announced at this time.

Federal Trade Commission & Department of Justice Antitrust Division

• February 2, 8:30 – 9:00 a.m. – FTC Commissioner Alvaro Bedoya gives a keynote speech at the 13th Annual Law Leaders Global Global Conference in Miami, Florida.  Also speaking at the event will be Michael Kades, Deputy Assistant Attorney General for the Antitrust Division, U.S. Department of Justice, and Sarah Cardell, Chief Executive of the UK’s Competition and Markets Authority.

Farm Credit Administration

• No significant events are scheduled or have been announced at this time.

Trade Associations & Think Tank Events

Trade Association Events

• January 29 – February 1: The Managed Funds Association holds their MFA Network Miami 2024 Conference in Miami, Florida. 

• January 31, 8:00 a.m. – The Institute for International Finance holds an online event, “IIF Talking Policy with John Schindler, Secretary General, Financial Stability Board.”

• February 1: SIFMA hosts a conference entitled “FINRA’s 2024 Priorities” in New York.

Think Tank Events

• January 29, 1:00 p.m. – The American Enterprise Institute for Public Policy Research holds a discussion on "U.S. International Trade Policy and the Agricultural Sector in 2024 and Beyond."

• January 30, 3:00 p.m. – The Atlantic Council holds a virtual discussion, beginning at 3 p.m., on "The Future of U.S.-EU Economic Ties." US Commerce Secretary Gina Raimondo and European Commission Executive Vice President Margrethe Vestager discuss the future of trade and technology in Washington, DC.

• February 2, 9:00 – 2:00 p.m. – The Brookings Institution cohosts with the Boston University School of Law Review of Banking and Financial Law 2024 Symposium: The Politics of Financial Regulation in Boston, Massachusetts.

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

U.S. Financial Regulatory Week Ahead

It is a snowy and frigid beginning of the week here in Washington. There is only one major regulatory meeting this week: The SEC is looking to move forward with new regulations of SPACs and is holding an open meeting on Wednesday to consider several new proposals. 

It was not just the Nation's capital hit by a frigid front this past week: The Federal Reserve's Bank Capital proposal was hit with a frosty blast of opposition from several important regulatory players. As we reported in last week's Reg Week Ahead, Federal Reserve Board Governor Michelle Bowman continues to take a tough stance on the proposal at the U.S. Chamber of Commerce's Center for Capital Markets "Protect Main Street" event. Bowman was joined this past Tuesday by Federal Reserve Governor Christopher Waller, who, in a speech at the Brookings Institution, said of the proposal, "It's got to have a major overhaul, in my view, to get a reasonable product and possibly even taking it back and starting over." He also said of the portion dealing with operational risk, "The way it's calculated made absolutely no sense to me whatsoever." 

At this point, Federal Reserve Board Vice Chair Michael Barr's efforts to push forward on the proposal has run into a turbo-charged buzzsaw of opposition from all the major bank trade associations, along with the U.S. Chamber of Commerce, the Mortgage Bankers Association, the National Association of Homebuilders, and the National Association of And the Bank Policy Institute has hired former Secretary of Labor Eugene Scalia to (most assuredly) bring a federal lawsuit against the Fed if they push forward with the proposal as current written.  Scalia has a long and highly successful track record of suing financial regulators over a variety of controversial proposals. 

Another highly controversial regulatory proposal emerged this past week: The CFPB announced its intention to move forward with new regulations around overcharge fees.  The proposal immediately was hit with intense criticism from most of the banking sector and several influential members of Congress.  We expect this to be yet another set of regulatory proposals that end up being challenged in Federal Court soon. 

Also, this past week, U.S. Treasury staff traveled to China for a working group session on financial stability and capital markets.   No breakthroughs were reached. Still, the read-out was generally positive and is all part of the reproachment between Beijing and Washington set in motion as a result of President Biden's meeting with Chinese President Xi in San Francisco this past November. 

Finally, we would note a timely event being hosted by the Peterson Institute for International Economics this week: A virtual discussion on "Next steps for the Basel Committee on Banking Supervision" that will feature Neil Esho, Secretary General, Basel Committee on Banking Supervision and  Isabelle Vaillant, Director of Prudential Regulation and Supervisory Policy, European Banking Authority. This should be an informative event, considering the growing pushback on the Fed's capital rules.

Below is a listing of all the issues and events U.S. regulators are engaged in this week, along with relevant think tank and trade association events. Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

• January 15, 10:00 a.m. – The Senate Banking Committee will hold a hearing on the Reauthorization of the National Flood Insurance Program.

House of Representatives

• The House is out of session this week.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• No public events are scheduled as the Federal Reserve is in its “Blackout Period” in advance of the January 31 Federal Open Market Committee meeting on interest rates.

U.S. Treasury Department

• There are no announced scheduled events of note.

Securities and Exchange Commission

• January 24, 9:00 a.m. – The SEC will hold an open meeting to consider new rules for Special Purpose Acquisition Companies (SPACs), Shell Companies, and Projections.

• January 25, 2:00 p.m. – The SEC will hold a Closed Meeting.

• January 25, 8:00 a.m. – SEC Chair Gary Gensler, along with several senior SEC staff members, will participate in a Roundtable on Shortening the Settlement Cycle in the EU.  The event will be held in Brussels.

Commodities Futures Trading Commission

• CANCELLED - January 22, 9:00 a.m. – The CFTC had announced (and canceled on Saturday) an open meeting to consider requirements for Designated Contract Markets and Swap Execution Facilities Regarding Governance and the Mitigation of Conflicts of Interest Impacting Market Regulation Functions.

• January 26, 12:00 p.m. – CFTC Summer K. Mersinger will participate on a panel, Digital Assets: What’s in Store for the Future, at the ABA Business Law Section’s Derivatives and Futures Law Committee Winter Meeting in Naples, Florida.

• January 26, 1:15 p.m. – CFTC Chairman Rostin Behnam will keynote at the ABA Business Law Section Committee on Derivatives and Futures Law Winter Meetings in Naples, Florida.

Federal Deposit Insurance Corporation

• There are no announced scheduled events of note.

Office of the Comptroller of the Currency

• There are no announced scheduled events of note.

The Consumer Financial Protection Bureau

• There are no announced scheduled events of note.

National Credit Union Administration

• There are no announced scheduled events of note.

Federal Trade Commission & Department of Justice Antitrust Division

• January 24, 3:00 p.m. – The FTC will hold a Closed Commission meeting.

• January 25, 12:00 p.m. – 4:30 p.m. – The FTC is holding a Tech Summit in Washington, D.C. The Summit events goal is “to facilitate a dialogue amid a dynamic landscape.”  You can see the agenda and list of speakers HERE.

Farm Credit Administration

• There are no announced scheduled events of note.

Trade Associations & Think Tank Events

Trade Association Events

• January 24, 8:00 a.m. – SIFMA will host a webinar on Global Settlement Acceleration.

Think Tank Events

• January 22, 2:00 p.m. – The Brookings Institution is holding an event entitled “Investing in All of America: The Biden-Harris Administration’s place-based approach.”  White House National Economic Council Director Lael Brainard will be participating in a discussion on the issue.

• January 24, 2:00 p.m. – The Brookings Institution will hold an event entitled “SECURE 2.0 after one year and the future of retirement policy.”

• January 24, 1:15 p.m. – The American Enterprise Institute for Public Policy Research holds a virtual discussion on "Soft Landing, Hard Landing, or Financial Crisis?"  Participating on the panel will be Julia Coronado, President of MacroPolicy, Perspectives; Steven Kamin, AEI senior fellow; former Council of Economic Advisers Chair Jason Furman , Professor of the practice of economic policy at Harvard Kennedy School; Desmond Lachman, AEI senior fellow; and Nathan Sheet, Global chief economist at Citibank.

• January 25, 9:00 a.m. – The Peterson Institute for International Economics holds a virtual discussion on "Next steps for the Basel Committee on Banking Supervision."  Speakers will include Neil Esho, Secretary General, Basel Committee on Banking Supervision, and Isabelle Vaillant, Director of Prudential Regulation and Supervisory Policy, European Banking Authority.

• January 28 – The American Bankers Association holds its Insurance Risk Management Forum in Amelia Island, Florida.

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

The Global Week Ahead

January 21 - 28, 2024

Greetings from a frigid, snowy Washington, DC!  Central bank interest rate decisions will dominate the news in the coming week as the Bank of Japan, the European Central Bank, and the Bank of Canada all meet this coming week (with the Federal Reserve meeting the following week on January 30-31).   

For now, geopolitical events this week are at a minimum, with perhaps the most significant global event being India's 75th Republic Day, celebrating the nation's constitution and independence. Foreign leaders, led by French President Emmanuel Macron, will arrive to help celebrate and meet with Prime Minister Narendra Modi. The Macron and Modi meeting is particularly important for Macron, as he is seeking to sign sizeable defense and energy agreements with India.

All eyes will be on New Hampshire in the US as the state holds the Republican Presidential Primary. While it is only the first primary after last week's Iowa caucus, it might be the last Republican primary for former South Carolina Governor Nikki Hailey. With the surprise withdrawal from Florida Governor Ron DeSantis' presidential campaign (and his endorsement of former President Donald Trump), Haley faces a do-or-die moment in the race. 

Looking at Europe, we will be watching this week as the European Commission debate and likely approve the European Economic Security Package (EESP).  Notably, the package will likely include new trade and investment restrictions aimed at China while seeking to bolster the economic national security of the EU. The EESP is closely watched in the US Congress as similar restrictive legislation is being considered this year.

Also in Europe this week, NATO begins its biggest training exercise, Steadfast Defender 2024, since the end of the Cold War.   More than 90,000 NATO member soldiers will participate in the event that lasts until late May.

Back to the global economic outlook this week: Beyond the big central bank meetings, markets will watch several US data releases, particularly Q4 GDP figures and the PCE print.  Germany’s always influential Ifo Survey comes out Thursday along with key consumer confidence gauges in the UK, France, and Germany.   

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

Sunday, January 21, 2024

Global

• The 3rd South Summit of the G77 takes place in Kampala, Uganda.  UN Secretary-General António Guterres is expected to address the summit.

Americas

Political/Social Events –

• US Secretary of State Antony Blinken begins a tour of African nations, including Cape Verde, the Ivory Coast, Lagos, and Angola.  Blinken’s chief goal for the trip is to dissuade these nations from joining economic and security partnerships with Russia.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Italian Prime Minister Giorgi Meloni travels to Turkey for meetings with President Recep  Tayyip Erdogan.  Italy has just taken over the chair of the G7 for 2024, and this is Meloni’s first consultation meeting as chair.

• NATO launches Steadfast Defender 2024, the largest NATO military exercise since the end of the Cold War. The training goes until May 31.  More than 90,000 troops from NATO members will participate.  

• German Chancellor Olaf Scholtz will host French President Emmanuel Macron in Berlin for talks.

• Truck drivers and farmers are expected to protest in Bucharest, Romania as part of a week-long demonstration against the price of diesel fuel, insurance rates, and EU environmental rules.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Monday, January 22, 2024

Global

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

Americas

Political/Social Events –

• The US House of Representatives is out of session this week. The Senate is in session.

• A large group of US business leaders is expected to travel to Taiwan for meetings with the incoming President, Lai Ching-te.

Economic Reports/Events –

• US CB Leading Index (December)

• Brazil BCB Focus Market Readout

• Costa Rica Balance of Trade (December)

• Colombia Imports/Exports/Balance of Trade (November)

Asia

Political/Social Events –

• The opening ceremony of the Ram Temple in Ayodha, India, will take place. Considered one of the holiest temples of the Hindu faith. It is believed to have been built over the birthplace of Lord Ram, a sacred Hindu deity.  Previously, a mosque had been on the site, but a Hindu mob razed it, and in 2019, the Indian Supreme Court awarded the site to the Hindus, fulfilling a major campaign promise of Indian Prime Minister Narendra Modi.

Economic Reports/Events –

• China Loan Prime Rate 1Y, Loan Rate 5Y, M2 Money Supply (December)

• Taiwan Export Orders (December), Unemployment Rate (December)

• Hong Kong Consumer Price Index (December), Inflation (December)

• Sri Lanka Central Bank Interest Rate Decision

Europe

Political/Social Events –

• The European Commission will likely endorse a new European Economic Security Package (EESP).  The aim of the package is to strengthen the bloc’s collective foreign policy, economic, and security capabilities; in this case, it is reducing dependence on third-country trade, investment, and supply chains. China and the US are an implicit focus of the strategic autonomy policy.

• German Chancellor Olaf Scholz will meet German Farmers' Association President Joachim Rukwied in Berlin to discuss a dispute concerning government plans to phase out agricultural subsidies.  Germany’s farmers have been holding a series of protests around the country in recent weeks.

• The EU Foreign Affairs Council meets in Brussels.  The agenda includes a discussion and update on the Russian War on Ukraine and the situation in the Middle East.

• There will be an informal meeting of EU Trade Ministers through January 23 in Brussels.  They are expected to discuss the upcoming 13th World Trade Organization Ministerial Conference. An exchange on the theme of Open Strategic Autonomy is also planned.

Economic Reports/Events –

• ECB President Christine Lagarde Christine Lagarde participates in the state memorial ceremony in remembrance of former President of the Bundestag Wolfgang Schäuble in Berlin, Germany.

• Poland Corporate Sector Wages (December), Employment Growth (December), Industrial Production (December), Retail Sales (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Israel Manufacturing Production (November)

• Turkey Central Government Debt (December)

• Lebanon Inflation (December)

• Qatar GDP (Q3), M2 Money Supply (December), Total Credit Growth (December)

• Kuwait Inflation (December)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Tuesday, January 23, 2024

Global

• The UN Security Council is scheduled to hold an open debate on the Middle East. UN Secretary-General António Guterres is expected to deliver remarks.  

Americas

Political/Social Events –

• The New Hampshire Republican Presidential Primary is held today, with the town of Dixville Notch being the first town to report results.

• The 96th Academy Award nominations are announced.  The award ceremony will be held on March 10, which gives us all enough time to see all those movies they are going to nominate that none of us have ever heard of before.

Economic Reports/Events –

• US Redbook (January 20), Richmond Fed Manufacturing Index (January), Richmond Fed Services Index (January), API Crude Oil Stock Change (January 19)

• Canada New Housing Price Index (December)

• Argentina Economic Activity (November)

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Bank of Japan Interest Rate Decision and Quarterly Outlook Report

• South Korea PPI (December)

• Taiwan Industrial Production (December), Retail Sales (December)

• Australia NAB Business Confidence (December)

• Singapore Inflation (December), CPI (December), Inflation (December)

Europe

Political/Social Events –

• The EU-Egypt Association meets in Brussels.  Egyptian Foreign Minister Sameh Shoukry will attend.  The agenda includes a focus on bilateral relations, including cooperation to enhance stability in Egypt and in the EU – including human rights, security, counter-terrorism, and migration – as well as cooperation in economic and social issues – ranging from The Association Council will also address foreign policy matters, including a number of regional crises.

• Russian Foreign Minister Sergei Lavrov travels to the UN in New York for consultations.

• The EU Agriculture and Fisheries Council meets in Brussels. They are expected to discuss trade issues and the future of agriculture in Europe.

Economic Reports/Events –

• Eurozone Consumer Confidence (January)

• UK Public Sector Net Borrowing (December)

• Hungary Gross Wage (November)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Turkey Consumer Confidence (January)

Africa

Political/Social Events –

• Joseph Boakai will be sworn in as President of Liberia.

Economic Reports/Events –

• South Africa Leading Business Cycle Indicator (November) 

Wednesday, January 24, 2024

Global

• The UN Security Council is scheduled to hold consultations on the Middle East (Syria). 

• The Tenth Coordination Committee meeting of the United Nations Global Counter-Terrorism Coordination Compact (Counter-Terrorism Compact) will take place in a hybrid format through January 25.  The event will focus on "Strategic Coordination of Counter-Terrorism Initiatives in Africa: Challenges and Opportunities."

Americas

Political/Social Events –

• Argentinian labor unions are expected to go on strike in protest over newly elected President Javier Milei’s economic policies. Milei has threatened to dock the pay of government workers who participate in the protests.

• Today is the 40th anniversary of the launch of the first Apple Macintosh computers.

Economic Reports/Events –

• US Global Manufacturing & Services & Composite PMIs (January), MBA Mortgage Market Index (January 19), EIA Crude Oil Stocks Change (January 19)

• Bank of Canada Interest Rate Decision and Monetary Policy Report

• Brazil Federal Tax Revenues (December)

• Mexico Economic Activity (November), Mid-month Inflation (January)

• Argentina Unemployment (December), Retail Sales (November)

Asia

Political/Social Events –

• Thailand’s Constitutional Court will rule on whether the leader of the Move Forward Party, Pita Limjaroenrat, violated election law.  Limjaroenrat was the surprise first-place winner in the 2023 elections but was blocked from taking on the role of Prime Minister.  If found guilty, he will be banned from politics for years.

• The Asian Financial Forum will be held in Hong Kong through January 25.  Financial regulators from the Indo-Pacific will attend and speak, as well as CEOs of some leading financial firms.  The Forum is hoping to help spark a revival of the city as the leading financial city in the region.

Economic Reports/Events –

• Japan Imports/Exports/Balance of Trade (December), Jibun Bank Manufacturing & Services & Composite PMIs (January)

• India M2 Money Supply (January 8)

• South Korea Consumer Confidence (January)

• Taiwan fM2 Money Supply (December)

• Australia Judo Bank Manufacturing & Services & Composite PMIs (January), Westpac Leading Index (December)

• Thailand Imports/Exports/Balance of Trade (December), New Car Sales (December)

Europe

Political/Social Events –

• Russia invaded Ukraine 700 days ago.

• There will be an informal meeting through January 26 of EU Justice and Home Affairs Ministers in Brussels. 

• Romania celebrates Unification Day, marking the day in 1859 when Moldavia and Wallachia came together to form the Union of the Romanian Principalities.

Economic Reports/Events –

• Eurozone HCOB Manufacturing & Services & Composite PMIs (January)

• Germany HCOB Manufacturing & Services & Composite PMIs (January)

• France HCOB Manufacturing & Services & Composite PMIs (January)

• UK S&P Global Manufacturing & Services & Composite PMIs (January), CBI Business Optimism (November)

• Ireland Residential Property Prices (November)

• Poland Unemployment Rate (December)

• Russia PPI (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Jordan Industrial Production (November)

Africa

Political/Social Events –

• Today is UNESCO World Day for African and Afrodescendant Culture.

Economic Reports/Events –

• South Africa Inflation (December)  

Thursday, January 25, 2024

Global

• The UN Security Council is scheduled to hold a briefing, followed by consultations, on Haiti. 

Americas

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• US GDP (Q4), Durable Goods Orders (December), Chicago Fed National Activity Index (December), Durable Goods Orders (December), Goods Trade Balance (December), Initial Jobless Claims (January 20), Retail Inventories (December), Wholesale Inventories (December), Real Consumer Spending (Q4), New Home Sales (December) EIA Natural Gas Stocks Change (January 19), Kansas Fed composite Index (January), Kansas Manufacturing Index (January), Building Permits (December)

• Canada CFIB Business Barometer (January), Average Weekly Earnings (November), Manufacturing Sales (December)

• Mexico Unemployment Rate (December)

• Brazil FGV Consumer Confidence (January), Current Account (December), FDI (December)

• Paraguay PPI (December)

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• South Korea Business Confidence (January), GDP (Q4)

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

• Australia Reserve Bank of Australia Bulletin

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• European Central Bank  (ECB) Interest Rate Decision and Press Conference

• ECB President Christine Lagarde will give remarks on the occasion of International Holocaust Remembrance Day in Frankfurt, Germany

• Bank of England Director for Banking, Payments, and Innovation Victoria Cleland speaks at the City & Financial Global Payments Regulation and Innovation Summit in London.

• Germany Ifo Business Climate (January), Ifo Current Conditions (January)

• France Business Confidence (January), Business Climate Indicator (January), Unemployment Benefit Claims (December)

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

• Spain PPI (December)

• Ukraine Central Bank Interest Rate Decision

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Turkey Business Confidence (January), Capacity Utilization (January), Central Bank Interest Rate Decision, FX Reserves (January 19)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• South Africa PPI (December), Central Bank Interest Rate Decision

Friday, January 26, 2024

Global

• Nothing significant to report.

Americas

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• US PCE Price Index (December), Personal Income (December), Pending Home Sales (December), Baker Hughes Oil Rig Count (January 26)

• Canada Wholesale Sales (December), Budget Balance (November)

• Brazil Bank Lending (December), IPCA mid-month CPI (January)

• Mexico Balance of Trade (December)

• El Salvador Balance of Trade (December)

• Argentina Consumer Confidence (January)

Asia

Political/Social Events –

• Japan’s Diet (parliament) convenes.  They are expected to focus on a growing political fundraising scandal that has engulfed Prime Minister Fumio Kishida and the Liberal Democratic Party.

• Today is the 75th Republic Day in India, celebrating the day the country’s constitution was formed.  French President Emmanuel Macron visits India and meets Indian Prime Minister Narendra Modi. Financial markets in India are closed for the holiday.

• Today is Australia Day, celebrating the country’s settlement in 1788.

• Samsung Electronics Chairman Lee Jae-yong will learn his fate in a Seoul, South Korean court over charges of accounting fraud and stock manipulation. He faces five years in prison if convicted by the Court.

Economic Reports/Events –

• Japan Bank of Japan Monetary Policy Meeting Minutes, CPI (January), Coincident Index (November), Leading Economic Index (November)

• India Bank Lending (January 12), Bank Loan Growth (January 12), FX Reserves (January 19)

• Singapore URA Property Index (Q4), Industrial Production (December)

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

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

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

• Germany GfK Consumer Confidence (February)

• France Consumer Confidence (January)

• UK Gfk Consumer Confidence (January)

• Ireland Consumer Confidence (January)

• Spain Unemployment (Q4)

• Hungary Unemployment (December)

• Greece Total Credit (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Israel Composite Economic Index (December)

Africa:

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Saturday, January 27, 2024

Global

• Today is International Holocaust Remembrance Day.

Americas

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• ASEAN Foreign Ministers will meet in Luang Prabang, Laos, through January 28.   They are expected to discuss tensions in the South China Sea, the ongoing violence and suppression in Myanmar, and a number of other issues.

Economic Reports/Events –

• China Industrial Profits (December)

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Jordan PPI (November)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Zimbabwe Inflation (January)

Sunday, January 28, 2024

 Global

• Nothing significant to report.

Americas

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Finland holds presidential elections.  Center-Right candidate Alexander Stubb is leading slightly in polls against Green Party leader Pekka Haavisto.   If there is a need for a run-off, it will be held on February 11.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

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

Recommended Weekend Reads

January 19 - 21, 2024

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

China/Taiwan Tensions

• “Why China Would Struggle to Invade Taiwan”  Council on Foreign Relations

  This interactive report makes the case that while China’s ambition to gain control of Taiwan is clear, doing so through force would prove to be enormously difficult and costly.  The maps in the report explaining the tough coastline and limited deep water ports alone are worth the read.

Ukraine

• “The War in Ukraine Has Become a Peripheral Concern for the West”  Carnegie Endowment for International Peace

  What seemed at first to be the start of a Third World War has turned out to be more akin to a Second Yugoslav War: a local conflict on the edge of Europe triggered by a slow-motion imperial collapse. 

Latin America

• “Plunging fertility rates are creating problems for Latin America”  The Economist

  Latin America’s fertility rate fell below the 2.1 births per woman required to maintain a stable population in 2016; the region is home to some of the fastest-falling fertility rates in the world. Together with rising life expectancy and high levels of emigration, mostly of working-age people, this is creating a problem for Latin America: the region is getting old very quickly, and this will leave societies struggling to afford pensions and healthcare.

Energy

• “Geopolitics – Not Just Summits – Will Shape the Transition to Clean Energy”  Foreign Affairs

  In late 2023, a consensus was reached at the UN on reducing greenhouse gas emissions at COP28, held in Dubai.  While the deal was hailed for calling for a transition away from fossil fuels. The deal broadly holds some promise for the transition away from fossil fuels—if not necessarily in the ways advertised. A closer look at the language of the official agreement suggests that some of what was agreed to is less significant than meets the eye. Much of the real work needed to advance the energy transition falls outside the realm of the UN climate negotiating mechanism.  The reality is, according to the authors, a fracturing geopolitical landscape—as much as the growth in climate finance or even advancements in climate technology—will determine just how quickly (or how slowly) the transition to net-zero emissions proceeds.

Global Finance & Trade

• “Geopolitics and the geometry of global trade”   McKinsey Global Institute

  Global trade patterns are reconfiguring. More shifts are likely, and businesses need to be aware of the potential trade-offs of different paths ahead. In this new study, the McKinsey Institute argues five points: 1) Trade in concentrated products binds geopolitically distant economies, 2) Trade reconfiguration is underway, 3) Increased investment into a range of developing economies suggests further trade reconfiguration in coming years, 4) The future of global trade will involve trade-offs—reducing geopolitical distance comes with increasing trade concentration, and vice versa, and 5) Business leaders need to position their organizations for uncertainty. 

• “Jobs, National Security, and the Future of Trade”  Bain Consulting

  As the global economy adjusts to persistent economic and geopolitical pressures and disruptions, the familiar routes that define the world trade map are being redrawn, and trade blocs are playing a greater role. In addition, overall global trade is growing at a slower rate than the world economy, a fundamental shift away from the trend of trade-led globalism that has been prevalent since the end of the Cold War. (See “BCG’s Global Trade Model Methodology.”) World trade in goods is forecast to grow at 2.8% per year, on average, through 2032, compared with an estimated 3.1% growth rate for global GDP in the same period, according to a new BCG analysis.

• “Why Debt Relief Matters to the Wealthy West” Carnegie Endowment for International Peace

  As many low- and middle-income countries (LMICs) grapple with a sharp rise in payments on their sovereign debt in the wake of the COVID-19 pandemic and the war in Ukraine, leaders across the world are calling for urgent debt restructuring and reforms to the development financing system. Their calls are often framed in humanitarian and ethical terms. These ethical arguments are compelling. However, reducing the burden of loan servicing and expanding development financing for LMICs are not just ethical responsibilities for wealthy Western nations—they are also strategic imperatives. The impacts of debt distress are not confined to the borders of indebted nations. High debt servicing costs increase poverty and fragility in developing countries, contributing to political instability. They also reduce those countries’ capacity to combat climate change, the effects of which are felt globally, including in the form of mass migration to Europe and North America.

• “Why global commerce is now in the crossfire” Good Authority

  Modern globalization, dependent on bulk shipping via open seas, is under fire – the real live kind. Most recently, the spillover of the Israel-Hamas conflict has emboldened Houthi rebels from Yemen to attack shipping in the Red Sea. Shipping companies are coping with major new costs as insuring their vessels in dangerous waters becomes more and more difficult.  While the Red Sea developments – and their potential to escalate – are big news, it’s not the first time that territorial or geopolitical conflicts have spilled into the seas. We are watching in real-time as other major powers and their proxies challenge the West’s dominance in sea power – threatening the maritime commerce that makes the global economy run. And what’s happening today won’t be the last time we see this type of threat.

Map of the Week

Russia’s War is Increasingly Spilling Over Onto NATO Soil

As the war in Ukraine continues, Russia’s aerial attacks (missiles, drones, and rockets) are increasingly hitting outside of Ukraine’s border and landing in Romania, Bulgaria, and Turkey – all NATO members.  All of these incidents are not only violations of the national sovereignty of the respective country but a violation of NATO’s mandate – meaning, technically, NATO could invoke Article 5 (the principle that an attack on one member is an attack on all members) and move to defend these member states from Russian attack. 

With the extraordinary warning from German Defense Minister Boris Pistorius this week that Germany believes Russia could attack the NATO military alliance in the next five to eight years, these “accidents” take on new and much more grave significance.

The Global Week Ahead

January 14 - 21, 2024

Political events will dominate the week as the US presidential primary season officially begins with the Republican Iowa Caucus on Monday.  Despite an expected negative 9-degree Fahrenheit temperature and days of near-blizzard conditions, Iowans will bravely venture out to schools, fire stations, and neighbors' living rooms to debate who should be the Republican presidential candidate.  And then, in a fascinating tradition, they hand out pieces of paper, and everyone votes for whom they want.  Results then are called into a central counting center.  Former President Donald Trump is leading by a massive margin in the latest polls.  But if Iowa does anything, it surprises with whom they choose.  So, Monday night could be a night of surprises.

The other significant political event is the annual World Economic Forum in Davos, Switzerland.   While the world's leading CEOs (estimated at close to 1,600) continue to descend in droves on the little village nestled in the Alps, it will also draw an estimated 60 heads of state and senior government leaders.  In particular, we will be watching US Secretary of State Antony Blinken and French President Emmanuel Macron using the forum to intensify their support for Ukraine.  Indeed, the situation in the Red Sea and its impact on supply chains (coupled with the ongoing drought in Panama, which has dramatically slowed commercial travel through the Panama Canal) will be a significant point of discussion.

While this is happening, and despite it being a federal holiday on Monday, the US Congress will likely (hopefully) pass another funding extension to keep the federal government running as they continue to work on getting appropriations finished.  Additionally, this coming week, we will likely see the unveiling of an estimated $70 billion bipartisan tax policy agreement.  We may also see the outlines of a bipartisan border security deal that would unlock a vote on Ukraine and Israeli defense aid. 

On the global economic radar screen this week, markets will look closely at China's GDP numbers and industrial production figures for any sign of economic improvement.  Markets will also look at the Fed's Beige Book released this week, US retail sales, industrial production figures, and the University of Michigan survey.   Looking at Europe, the Eurogroup will meet in Brussels, and ECB President Christine Lagarde will speak on multiple occasions in Davos.  Finally, everyone will be observing oil prices as the Red Sea situation is highly likely to escalate in some way.  

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

Sunday, January 14, 2024

Global

• Nothing significant to report.

Americas

Political/Social Events –

• Guatemala will inaugurate its new president, Bernardo Arévalo, who campaigned as an anticorruption candidate.  He was elected six months ago, and his election is seen as a possible sea-change in the governance of the country, moving away from the traditional center-right policies.

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

•  A delegation selected by President Biden will visit Taiwan following the presidential elections on Saturday.  Former President George W. Bush National Security Advisor Stephen Hadley and former Obama Deputy Secretary of State James Steinberg will accompany A

• Comoros holds presidential elections.

• Indonesian President Joko "Jokowi" Widodo finishes a significant Southeast Asia tour by visiting Brunei, following visits to the Philippines and Vietnam.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

• Denmark’s Queen Margrethe II will formally abdicate, allowing Crown Prince Frederik to become the King.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Indian External Affairs Minister Dr. S. Jaishankar travels to Tehran, Iran for two-days of meetings with Iranian Foreign Minister Hossein Amir-Abdollahian.  They are expected to discuss bilateral, regional, and global issues.

Economic Reports/Events –

• Israel Imports/Exports/Balance of Trade (December)

Africa

Political/Social Events –

• China’s foreign minister Wang Yi is on a four-nation African tour in his first overseas trip of the year. He will visit Egypt, Tunisia, Togo, and Cote d’Ivoire.

Economic Reports/Events –

• Nothing significant to report.

Monday, January 15, 2024 

Global

• The World Economic Forum Annual Meeting begins in Davos, Switzerland.  Attendees will include Chinese Premier Li Qiang, Ukraine President Volodymyr Zelensky, and US National Security Advisor Jake Sullivan.  While there, Sullivan will meet with Zelensky and is expected together are expected to push other world leaders to ramp up aid to Ukraine.  

• The UN Office for the Coordination of Humanitarian Affairs and the Office of the UN High Commissioner for Refugees will jointly launch the Ukraine Humanitarian Needs and the Response Plan and Regional Refugee Response Plan for Ukraine for 2024.

Americas

Political/Social Events –

• The Iowa Republican Caucus is held the first event in the presidential primary cycle.  For a run-down on what to expect and to watch for, the Cook Political Report’s Amy Walter wrote a superb overview, which you can read HERE.

• The Colombian government’s cease-fire with FARC-EMC rebels is due to end if it is not extended.

Economic Reports/Events –

• Canada Manufacturing Sales (November), New Motor Vehicle Sales (November), Wholesale Sales (November), Bank of Canada Business Outlook Survey

• Brazil Business Confidence (January), BCB Focus Market Readout

• Peru GDP (November), Unemployment (December)

• Paraguay Current Account (Q2)

Asia

Political/Social Events –

• Nawaz Sharif, Pakistan's former prime minister and leader of the Pakistan Muslim League-Nawaz party, will launch his election campaign for the premiership.  Sharif is seen as gaining ground on former Prime Minister Imran Khan’s campaign.  Elections are being held on February 8.

Economic Reports/Events –

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

• Japan Machine Tool Orders (December’

• India WPI Food Index (December), WPI Fuel Index (December), WPI Manufacturing (December), Imports/Exports/Balance of Trade (December)

• Australia ANZ-Indeed Job Ads (December)

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

• Philippines Cash Remittances (November)

• Pakistan Consumer Confidence (December)

Europe

Political/Social Events –

• The Eurogroup meets in Brussels.  They are scheduled to discuss draft recommendations on the economic policy of the Euro Area for 2024 as well as the external competitiveness of the Euro Area. 

• There will be an informal meeting of EU Environmental Ministers through January 16 in Brussels.

• Russia formally launches “Ruviki”, the Russian analog of Wikipedia.  It is seen as “Putin-friendly” and compliant with the Kremlin’s view of history.

Economic Reports/Events –

• Eurozone Balance of Trade (November), Industrial Production (November)

• Germany Wholesale Prices (December), Full Year GDP (2023)

• Italy Balance of Trade (November)

• Ireland Construction PMI (December), Balance of Trade (November)

• Hungary Construction Output (November)

• Poland Inflation (December)

• Ukraine Balance of Trade (November)

• Russia FX Reserves (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

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

• Turkey Budget Balance (December)

• Israel Unemployment (December), Inflation (December)

• Qatar GDP (Q3)

Africa

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Tuesday, January 16, 2024

Global

• The UN Security Council will hold consultations on the Middle East (Yemen).

• The UN will host regional launches of the World Economic Situation and Prospects 2024, which will be organized by the UN Department of Economic and Social Affairs (DESA). The United Nations Information Center in Moscow will hold a WESP briefing on the regional outlook for the Commonwealth of Independent States and South-Eastern Europe. The United Nations Information Center in Mexico will hold a WESP briefing on the global outlook and the regional outlook for Latin America and the Caribbean.

Americas

Political/Social Events –

• Hundreds of US federal government employees are expected to stage a walk-out in protest over President Biden’s handling of the Gaza War.

• A civil defamation jury trial begins in Manhattan federal court against Trump over his 2019 denial of journalist Jean Carroll’s claim that he raped her.

Economic Reports/Events –

• Federal Reserve Board Governor Christopher Waller will give an Economic Outlook at the Brookings Institution in Washington, D.C.

• US NY Empire State Manufacturing Index (January), NOPA Crush Report

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

Asia

Political/Social Events –

• Nothing significant to report.  

Economic Reports/Events –

• Japan PPI (December)

• South Korea Import/Export Prices (December)

• Australia Westpac Consumer Confidence Index (January), TD-MI Inflation Gauge (December), Building Permits (November), Private House Approvals (November)

Europe

Political/Social Events –

• The EU Economic and Financial Affairs Council meets in Brussels.  They are scheduled to discuss the state of the Ukrainian War and its economic impact on the EU. As well as providing guidance for further work in advance of the G20 meeting of finance ministers and central bank governors in Saõ Paulo, Brazil on February 26-29.'

• EU President Ursula von der Leyen will give a Special Address at the World Economic Forum in Davos, Switzerland.

• Slovakia's Prime Minister Robert Fico will meet with Hungarian Prime Minister Viktor Orban in Budapest, Hungary. They are expected to discuss reviving the Visegrad Four Group (Czech Republic, Hungary, Poland, and Slovakia).

• A French court gives its verdict on cement maker Lafarge’s appeal against its indictment regarding subsidiary Lafarge Cement Syria. The company faces charges for endangering its Syrian employees.

Economic Reports/Events –

• Bank of England Governor Andrew Bailey will testify before the House of Lords Economic Affairs Committee.

• Eurozone Consumer Inflation Expectations (November), ZEW Economic Sentiment Index (January)

• Germany Inflation (December), CPI (December), Inflation (December), ZEW Economic Sentiment Index (January), ZEW Current Conditions (January)

• UK Employment (November),

• Italy Inflation (December), CPI (December)

• Ireland CPI (December), Inflation (December)

• Belarus Industrial Production (December)

• Poland Inflation (December)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Israel GDP (Q3)

• Qatar Inflation (December)

• Turkey Auto Production (December)

Africa

Political/Social Events –

• The IMF’s executive board meets to approve a deal with Kenya unveiled last November that will grant it $938mn in new funds.

Economic Reports/Events –

• Nigeria Food Inflation (December)

Wednesday, January 17, 2024

Global

• The OPEC Monthly Report is released.

• The UN Security Council will hold consultations on the United Nations Peacekeeping Force in Cyprus (UNFICYP).

Americas

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Federal Reserve Board Governor Michelle Bowman will participate in a fireside chat with the US Chamber of Commerce’s Senior Vice President Bill Hulse at the Chamber’s “Protect Main Street Lending” conference to discuss the Basel III ‘Endgame’” in Washington, D.C.

• Federal Reserve Vice Chair for Supervision Michael S. Barr will give opening remarks at the 2nd Annual Massachusetts Institute of Technology/Federal Reserve System Conference on Measuring Cyber Risk in the Financial Services Sector in Cambridge, Massachusetts. He will be followed by Federal Reserve Deputy Director for Policy, Supervision, and Regulation Arthur Lindo, who will give a keynote speech on Cyber Risk.

• New York Federal Reserve Bank President John Williams will give opening remarks before the hybrid event, "An Economy that Works for All: Measurement Matters," at the Federal Reserve Bank of New York.

• US MBA Mortgage Market Index (January 12), Retail Sales (December), Export & Import Prices (December), Redbook (January 13), Industrial Production (December), Capacity Utilization (December), Manufacturing Production (December), NAHB Housing Market Index (January), Retail Inventories Ex-Autos (November), Fed Beige Book, API Crude Oil Stock Change (January 12)

• Canada PPI (December), Raw Materials Prices (December)

• Brazil Retail Sales (November)

• Colombia Industrial Production (November), Retail Sales (November)

Asia

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• China GDP (Q4), Industrial Production (December), Retail Sales (December), Unemployment (December), Industrial Capacity Utilization (Q4), House Price Index (December)

• Japan Reuters Tankan Index (January)

• Singapore Non-Oil Exports (December)

• Indonesia Loan Growth (December), Central Bank Interest Rate Decision

• Sri Lanka Manufacturing PMI (December), Services PMI (December)

Europe

Political/Social Events –

• The European Parliament will outline its expectations for the 1 February special European Council.  They will also discuss Hungary and frozen EU funds with Presidents Charles Michel and Ursula von der Leyen. A resolution on Hungary will be put to a vote on January 18.

Economic Reports/Events –

• ECB President Christine Lagarde participates in the Stakeholder Dialogue "Town Hall: How to Trust Economics" during the World Economic Forum in Davos, Switzerland.

• ECB Board Member Piero Cipollone gives welcoming remarks at a meeting of the Euro Cyber Resilience Board for pan-European Financial Infrastructures in Frankfurt, Germany

• Eurozone Inflation Rate (December), CPI (December)

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

• France Budget Balance (November)

• Russia Current Account (Q4)

• Belarus GDP (December)

Middle East

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Jordan Inflation (December)

Africa

Political/Social Events –

• Former Sierra Leone President Ernest Bai Koroma goes to court on charges of treason in connection with a failed coup in November 2023.

Economic Reports/Events –

• South Africa Retail Sales (November)

Thursday, January 18, 2024

Global

• Nothing significant to report. 

Americas

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Atlanta Federal Reserve Bank President Raphael Bostic to give brief remarks on the economic outlook before the Metro Atlanta Chamber board of directors meeting.  At Noon, Bostic will speak on the 2024 economic outlook before the Atlanta Business Chronicle 2024 Economic Outlook lunch.

• US Jobless Claims (January 13), Philadelphia Fed Manufacturing Index (January), Philly Fed Business Conditions (January), Philly Fed CAPEX Index (January), Building Permits (December), Housing Starts (December), EIA Natural Gas Stocks (January 12), EIA Crude Oil Stocks (January 12)

• Brazil IBC-BR Economic Activity (November)

• Argentina Balance of Trade (December), Central Bank Interest Rate Decision

Asia

Political/Social Events –

• China's Foreign Minister Wang Yi will visit Brazil and Jamaica through Jan. 22.

Economic Reports/Events –

China FDI (December)

• Japan Machinery Orders (November)

• Australia Employment Change (December), Capacity Utilization (November), Industrial Production (November)

• Kazakhstan Industrial Production (December)

Europe

Political/Social Events –

• NATO Chiefs of Defense will meet in Brussels through January 18.  They are expected to discuss the situation in Ukraine, Israel/Gaza, and the Red Sea.

• Today is the deadline for restoring power-sharing in Northern Ireland (Stormont Agreement), following an 11-month extension by the UK government put in place in February 2023. This target date has already been pushed back and could be relaunched anew.

Economic Reports/Events –

• ECB President Christine Lagarde participates in the Stakeholder Dialogue "Uniting Europe's Markets" during the World Economic Forum in Davos, Switzerland.

• ECB Monetary Policy Meeting Minutes

• Eurozone Current Account (November), Construction Output (November), New Car Registrations (December)

• UK RICs House Price Balance (December)

• Spain Balance of Trade (November)

• Italy Current Account (November)

• Russia Balance of Trade (November)

Middle East

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Turkey FX Reserves (January 12)

Africa

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• South Africa Gold Production (November), Mining Production (November), Building Permits (November)

Friday, January 19, 2024 

Global

• Nothing significant to report. 

Americas

Political/Social Events –

• The US Congress faces a deadline at midnight to pass a short-term funding resolution that will keep the government open.  Over the past weekend, Democratic and Republican leaders agreed on a short-term funding vehicle – which will meet Speaker of the House Michael Johnson’s (R-LA) demand that the funding be “laddered” and keep the government open until March 1.

Economic Reports/Events –

• Federal Reserve Vice Chair for Supervision Michael Barr to participate in discussion on "Bank Regulation" before the Responsible AI Symposium: Advancing a Blueprint for Tech Equity" hosted by the National Fair Housing Alliance.

• San Francisco Federal Reserve Bank President Mary Daly to participate in a fireside chat before the hybrid event, "A Future Outlook: Innovation & Economic Growth in San Diego"

• US Michigan Consumer Sentiment (January), Michigan Consumer Expectations (January), Banker Hughes Oil Rig Count (January 19), Existing Home Sales (December)

• Canada Retail Sales (November)

• Mexico Retail Sales (November)

• Paraguay Central Bank Interest Rate Decision

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Japan Inflation (December), Tertiary Industry Index (November)

• India FX Reserves (January 12)

• Australia Consumer Inflation Expectations (January)

• Hong Kong Business Confidence (Q1)

• Kazakhstan Central Bank Interest Rate Decision

Europe

Political/Social Events –

• Peter Pellegrini, the leader of Slovakia's Hlas party and an ally of Slovakian Prime Minister Robert Fico, will announce his candidacy for Slovakia's presidential election in March 2025.

Economic Reports/Events –

• ECB President Christine Lagarde participates in a Stakeholder Dialogue "The Global Economic Outlook" during World Economic Forum in Davos, Switzerland.

• ECB Board Member Elizabeth McCaul participates on a panel at the 12th Institute for Law and Finance (ILF) Conference on the Future of the Financial Sector “Navigating higher rates, volatility, and liquidity crises: Finance and Regulation in the New Monetary Order” in Frankfurt, Germany

• Germany PPI (December)

• UK Retail Sales (December)

• Switzerland Producer & Import Prices (December)

• Greece Current Account (November)

• Italy Construction Output (November)

• Poland PPI (December)

• Spain Consumer Confidence (December)

Middle East

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Israel Manufacturing PMI (December), Inflation Expectations (January), Leading Indicator (December)

Africa:

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Ethiopia Inflation (December)

Saturday, January 20, 2024

Global

• Nothing significant to report. 

Americas

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• Japan’s Smart Lander for Investigating the Moon (SLIM) spacecraft will attempt a lunar landing.  This would make Japan the fifth nation to successfully land a space vehicle on the Moon.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• Uganda will host the 3rd South Summit of the G77.  This is a summit that includes 130 developing and non-aligned countries that are seeking greater economic development.

Economic Reports/Events –

• Nothing significant to report.

Sunday, January 21, 2024

Global

• Nothing significant to report. 

Americas

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Nothing significant to report.

Asia

Political/Social Events –

• Nothing significant to report.

Economic Reports/Events –

• Nothing significant to report.

Europe

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Nothing significant to report.

Middle East

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Nothing significant to report.

Africa

Political/Social Events –

• Nothing significant to report. 

Economic Reports/Events –

• Nothing significant to report.

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

U.S. Financial Regulatory Week Ahead

January 15 - 19, 2024

It may be a federal holiday on Monday, but the remaining four days of the week will be busy and quite interesting for the Washington regulatory world.  

First, we would highlight the battle outside and inside the Federal Reserve on the proposed bank capital rule, which intensifies this week as Federal Reserve Board Governor Michelle Bowman participates in a U.S. Chamber of Commerce-sponsored conference critical of the proposal.   Bowman has intensified her criticism of the 1,087-page plan quarterbacked by Fed Vice Chairman for Supervision Michael Barr.  Barr has been barnstorming the speaking circuit lately, defending the plan, the most recent being a talk he gave in Washington last week (which, interestingly and oddly, was never added to the official Federal Reserve Board calendar of speaking events). 

At that event, Barr seemed to relent a bit on the outcome of the proposal, saying the Fed is taking the comment period very seriously and that “it will help us, I think, shape a better rule – make sure we get the calibration right for mortgage products, for credit card products, for consumer products.”

The Fed (and Barr) will co-host a conference this week with MIT (at MIT) on cybersecurity and banking, which should prove informative of where the Fed plans to go on tightening bank cyber requirements.

Also, this coming week, SEC Chair Gary Gensler will do a fireside chat at the left-of-center consumer rights organization Public Citizen on the future of AI in finance and how it might be regulated.

Meanwhile, the SEC’s proposed climate disclosure rules come under the microscope at a House Financial Services Subcommittee hearing.  House Republicans have made pushing back on ESG in general in finance – and the regulations regulators are contemplating around it – a top priority in 2024.

Below is a listing of all the issues and events U.S. regulators are engaged in this week, along with relevant think tank and trade association events.   Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

• January 17, 2:30 p.m. – The Joint Economic Committee holds a hearing on "Rebuilding the American Dream: Policy Approaches to Increasing the Supply of Affordable Housing."

• January 18, 10:00 a.m. – The Senate Banking Committee will hold a hearing entitled “National Security Challenges: Outpacing China in Emerging Technology.”  The witness will be Emily Kilcrease, Senior Fellow and Director of the Energy, Economics, and Security Program at the Center for a New American Security.

House of Representatives

• January 17, 10:00 a.m. – The House Financial Services Committee’s  National Security, Illicit Finance, and International Financial Institutions Subcommittee will hold a hearing on the International Financing of Nuclear Energy.

• January 18, 10:00 a.m. – the House Financial Services Committee’s Subcommittee on Oversight and Investigations will hold a hearing entitled “ The SEC’s Proposed Climate Disclosure Rule: A Future of Legal Hurdles.”

• January 18, 10:00 a.m. – The House Small Business Committee will hold a hearing entitled “Unleashing Main Street’s Potential: Examining Avenues to Capital Access.”

U.S Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• January 16, 11:00 a.m. – Federal Reserve Board Governor Christopher Waller will give an Economic Outlook at the Brookings Institution in Washington, D.C.

• January 17, 9:00 a.m. – Federal Reserve Board Governor Michelle Bowman will participate in a fireside chat with the US Chamber of Commerce’s Senior Vice President Bill Hulse at the Chamber’s “Protect Main Street Lending” conference to discuss the Basel III ‘Endgame’” in Washington, D.C.

• January 17, 9:30 a.m. – Federal Reserve Vice Chair for Supervision Michael S. Barr will give opening remarks at the 2nd Annual Massachusetts Institute of Technology/Federal Reserve System Conference on Measuring Cyber Risk in the Financial Services Sector in Cambridge, Massachusetts. He will be followed by Federal Reserve Deputy Director for Policy, Supervision, and Regulation Arthur Lindo, who will give a keynote speech on Cyber Risk.

U.S. Treasury Department

• No significant events are scheduled at this time.

Securities and Exchange Commission

• January 18, 2024, 2:00 p.m. – The SEC will hold a Closed Meeting.

• January 17, 1:00 p.m. – SEC Chair Gary Gensler will participate in a fireside chat with Robert Weissman, President of Public Citizen on “AI and Financial Services Policy.”  This will be followed by a Q&A session with the audience.

Commodities Futures Trading Commission

• 9:30 a.m. EST/2:30 p.m. GMT+1 – CFTC Commissioner Caroline D. Pham will participate in a fireside chat on U.S. innovation and regulation at GBBC’s 7th Annual Blockchain Central Davos in Davos, Switzerland.

• 10:30 a.m. EST/4:30 GMT+1 – CFTC Commissioner Caroline D. Pham will be recognized at “Women Who Lead” and participate in a panel discussion, “Crypto at a Crossroads: Future-proofing Digital Assets” at Bloomberg House Davos, in Davos, Switzerland.

Federal Deposit Insurance Corporation

• No significant events are scheduled at this time.

Office of the Comptroller of the Currency

• January 18, 9:30 a.m. – Acting Comptroller of the Currency Michael Hsu will offer remarks on bank liquidity at Columbia Law School in New York City. A question-and-answer session will follow his remarks.

The Consumer Financial Protection Bureau

• No significant events are scheduled at this time.

National Credit Union Administration

• January 18, 10:00 a.m. – The NCUA Board will hold a meeting.  The agenda has not yet been released.

Federal Trade Commission & Department of Justice Antitrust Division

• No significant events are scheduled at this time.

Farm Credit Administration

• No significant events are scheduled at this time.

Trade Associations & Think Tank Events

Trade Association Events

• January 17, 8:00 a.m. – The U.S. Chamber of Commerce Center for Capital Markets holds a discussion on "Protect Main Street Lending," focusing on Basel III regulations that would increase the amount of capital that large banks must hold. Representative Andy Barr (R-KY-6), Chairman of the Subcommittee on Financial Institutions and Monetary Policy, and Representative Bill Foster (D-IL-11), Ranking Member of the Subcommittee on Financial Institutions and Monetary Policy, will both speak in the morning.  In the afternoon, Federal Reserve Board Governor Michelle Bowman will participate in a fireside chat on the subject.

• January 17, 12:00 p.m. – Federal Housing Finance Agency Director Sandra Thompson will speak at the Exchequer Club in Washington, D.C.

Think Tanks/Academic Events

• January 16-17: The MIT Internet Policy Research Initiative will host the 2nd MIT/Federal Reserve Board of Governors Conference on Measuring Cyber Risk in the Financial Services Sector in Cambridge, Massachusetts.  A number of regulators will speak, including Federal Reserve Board Vice Chair Michael Barr.

• January 16, 9:30 a.m. – The Institute for International Finance will hold an online event (in Spanish) entitled “Argentina’s Economic and Policy Outlook.”

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Recommended Weekend Reading

January 12 - 14, 2024

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

Global

• “Top Ten Global Risks for 2024”  The Stimson Center

  In the 7th edition of their annual “Top Ten Global Risks,” the Stimson Center conducted an exercise in foresight drawn from their forecasting experience at the U.S. intelligence community’s National Intelligence Council. In their previous forecast, they focused on the proliferation of small wars, food insecurity, developing-country debt, and growing climate-change impacts — an ongoing polycrisis, entangled events and developments linked to and cascading off each other — is emblematic of our times: The post-World War II global system that the U.S. engineered is unraveling. Amidst this disorder and strife, even more signs of distress will surface in 2024.

Taiwan/China

• “The Taiwan that China wants is vanishing”  BBC

  In Taiwan, there are also 600,000 or so indigenous peoples who trace their ancestry back thousands of years to China. And then there is a younger, ambivalent generation that is wary of questions about identity. They feel Taiwanese but see no need for Taiwan to declare independence.  They want peace with China, they want to do business with it, but they have no desire to ever be part of it.

• “Taiwan’s Status Quo Election”  Foreign Affairs

  Why the Result Won’t Have Much Effect on Cross-Strait Relations—or U.S.-Chinese Tensions.

• “China’s Global Energy Interconnection: Exploring the Security Implications of a Power Grid Developed and Governed by China”  Rand Corporation

  In 2015, Chinese President Xi Jinping endorsed a new initiative, known as the Global Energy Interconnection (GEI), that could help solve humanity's pressing energy and climate dilemmas through the development of a global power grid. The GEI would connect remote renewable sources of energy to global consumption centers using ultra-high-voltage power transmission lines spanning continents and smart technologies. This way, peak demand for electricity in the evening in eastern China, for example, could be met using solar power at noon in central Asia, matching supply and demand across countries and continents more efficiently.  On paper, the proposal presents many benefits. However, concerns about China's intentions and the political, security, and economic implications of a China-led GEI also exist.

The United States

• “National Defense Industrial Strategy”  US Department of Defense

  The National Defense Industrial Strategy (NDIS) – the first of its type to be produced by the Department of Defense – provides a path that builds on recent progress while remedying remaining gaps and potential shortfalls in the US Industrial base and workforce.  The report also seeks to answer the question: How does the Defense Department prioritize and optimize defense needs in a competitive landscape undergirded by geopolitical, economic, and technological tensions?

• “Empire or Republic? The Choice in ‘24”  GoodFellows Podcast/Hoover Institution

  Hoover senior fellows Niall Ferguson, H.R. McMaster, and John Cochrane also discuss the odds of Cold War 2 morphing into World War III; whether economic conditions will overshadow fearmongering in a grim Trump-Biden referendum (in Niall’s words: the choice of “empire or republic”); the best use of this leap year’s spare day; plus why King Charles III would choose to break with tradition by spending a “dry” January in a very wet Scotland.

Russia

• “Challenges of Export Control Enforcement: How Russia Continues to Import Components for its Military Production”  Yermak-McFaul International Working Group on Russian Sanctions and the KSE Institute

  This analysis shows that, while export controls have had some effect on trade flows, Russia continues to be able to import large amounts of goods needed for military production.  Since the imposition of restrictions, supply chains have adapted, and most of the items in question now reach Russia via intermediaries in third countries, including China.  Almost half of the imports in the first ten months of 2023 consisted of goods that were produced on behalf of companies from coalition countries, including major enforcement challenges.

Yemen 

• “Houthi anti-ship missile systems: getting better all the time”   International Institute for Strategic Studies

  Over just a few years, Houthi rebels in Yemen have amassed a remarkably diverse array of anti-ship weaponry, incorporating both cruise and ballistic missiles, which they have recently used to threaten shipping in the Red Sea. The critical role that Iran has played in this build-up raises broader questions about Tehran’s regional strategy.