USFor the past eight weeks, the economic fallout from bad weather has dominated the headlines, raising questions and doubts about the economy’s natural momentum. Curiously, federal tax receipts paint a brighter picture of the underlying growth dynamic.
EuropeWith an economic recovery starting to take shape and major macroeconomic adjustments underway, Greece has made progress in recent years. But fierce political opposition to bailouts and the possibility of early elections present important risks, in our view.
AsiaChinese authorities caught the market off guard when they let the renminbi’s fixing rate decline last week. We believe this was a tactical move aimed at clearing out some market positions amid rampant speculation of a one-way rise in the renminbi—not a signal for a wholesale change in the currency policy.
Latin AmericaIn 2014, Brazil’s economy will likely post another year of slack growth and stubbornly high inflation. Monetary tightening coupled with the announcement of a spending freeze will likely help stabilize inflation expectations, but that’s probably not enough to turn the tide on the country’s growing economic imbalances.
AustralasiaA very weak capital spending expectations survey—a key barometer of investment plans—suggests that the rebalancing of the Australian economy from mining to non-mining remains a hope, not a reality.
USContinuity. That’s the main message from January’s Federal Open Market Committee (FOMC) meeting. Even with four new Federal Reserve Bank president voting members and with the new chair, Janet Yellen, taking over in February, policymakers show no signs of deviating from the previously announced script.
EuropeEven before taking office, Matteo Renzi has kindled high hopes of a new era of political and economic reform in Italy. We agree that there are grounds for cautious optimism, but think Renzi must deliver quick results in order to sustain investor confidence.
AsiaDespite a recent rise in money supply, we see no evidence of an overheating in the Philippine economy. Corporate capital spending remains restrained, while neither capital markets nor real estate markets are showing signs of a bubble. Speculations of an imminent monetary tightening are premature, in our view.