U.S. Financial Regulatory Week Ahead

July 1 - 5, 2024

It is about to be the quietest week of the summer in Washington.  Independence Day is on Thursday, and everyone is taking the whole week off.   And after all the massive legal fireworks that happened last week, we (and virtually all financial regulators) badly need it.

If you haven't caught up yet, the U.S. Supreme Court handed down two pivotal decisions that significantly impacted regulators.  The more seismic of the two rulings was the dismantling of the Chevron deference, a 40-year-old doctrine that mandated federal judges to defer to regulatory agencies 'reasonable' interpretation of 'ambiguous' federal laws. 

What are the implications of Chevron's reversal?  For those celebrating the ruling, "regulatory creep" in Washington is now in check.  Hard stop.  What we are curious about is what happens next – do we see a flood of lawsuits from various business organizations challenging regulations that have been put in place over recent years due to the Chevron deference?  That could shake the financial regulatory framework to its core. 

The second case saw the Supreme Court rebuking  the Securities and Exchange Commission's use of their in-house court to resolve certain enforcement disputes.  The 6-3 decision, hailed by conservative groups, is a significant rollback of 'regulatory creep' at the SEC.  Practically, it means a defendant can compel the SEC to take their case to a jury trial – a costly, labor-intensive action that could deter the Commission from initiating a case.

Elsewhere, life does not get any easier for FDIC Chair Marty Gruenberg.  The National Treasury Employees Union (NTEU) – which represents FDIC staff – is fighting Gruenberg's efforts to get employees back into the office.  Last Friday, Gruenberg issued a new order requiring employees to show up at least two days a week, effective July 15.   The NTEU says the order is illegal, and Gruenberg had not consulted with the union, accusing Gruenberg of "bad faith bargaining."  At this point, you must think Gruenberg cannot wait to get out of the FDIC.

And there was the release of the annual stress test results from the Federal Reserve.  All 31 banks passed the test – which gave an opening to virtually all the major bank trade groups to argue this is further evidence the Fed's proposed bank capital rule is not necessary.  

Speaking of the proposed bank capital rule – the Fed began shopping around a "revised" (read: scaled back) version of the rule.  The revision has not been seen publicly yet, but the rumor is the proposal will scale back the capital increase number to 5 percent from the original 16 percent plus, but our guess is two things will happen:  Progressive Democrats in Congress will not be happy with it, and bank trade groups will not be satisfied, either, saying it was not scaled back enough.   The fight will continue.

As for what is happening this coming week, the only two events or speeches we could find scheduled among financial regulators are overseas: Fed Chair Jay Powell will attend the European Central Bank Forum in Portugal, and CFTC Commissioner Caroline Pham will participate in a conference in Zurich. 

Below is a listing of what is happening at the financial regulatory agencies this week and in Congress.  Please let us know if you have any questions.

Below is a full listing of what is happening at the financial regulatory agencies this week and in Congress.  Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

• The Senate is out of session for the July 4 holiday and returns July 8.

House of Representatives

• The House is out of session for the July 4 holiday and returns July 8.

Joint Committees

• Congress is out of session for the July 4 holiday and returns July 8.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• Tuesday, July 2, 9:30 a.m. (Portugal time) – Federal Reserve Chair Jerome H. Powell will participate in a policy panel discussion at the European Central Bank (ECB) Forum on Central Banking 2024, Sintra, Portugal.

U.S. Treasury Department

• There are no significant events scheduled at this time.

Securities and Exchange Commission

• There are no significant events scheduled at this time.

Commodities Futures Trading Commission

• Wednesday, July 3, 10:00 a.m. Zurich Time – CFTC Commissioner Caroline D. Pham will participate in a panel titled “Navigating and making sustainable the Al and DLT paradigm shift: Challenges and opportunities in the financial services market” at the Point Zero Forum in Zurich, Switzerland.   Later in the day (11:50 a.m. Zurich time) she will participate in a “Capital Meets Policy” dialogue on the global AI regulatory landscape.  And then at 1:30 p.m. Zurich time, Commissioner Pham will participate in a panel discussion entitled “Global policymakers’ dialogue on state of CBDCs and digital money regulations.”

FINRA

• There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

• There are no significant events scheduled at this time.

Office of the Comptroller of the Currency

• There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

• There are no significant events scheduled at this time.

National Credit Union Administration

• There are no significant events scheduled at this time.

Federal Trade Commission & Department of Justice Antitrust Division

• Monday, July 1, 11:00 a.m. – The FTC will hold a Closed Commission Meeting.

Farm Credit Administration

• There are no significant events scheduled at this time.

International Monetary Fund & World Bank

• There are no significant events scheduled at this time.

North American Securities Administrators Association

• There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

• Tuesday, July 2, 10:30 a.m. – The Institute for International Finance holds an online event entitled “Enhancing Debt Sustainability and the Investment Environment: The Latin American Context.”

Think Tanks and Other Events

• Monday, July 1, 1:00 p.m. – The Atlantic Council's GeoEconomics Center holds a virtual event, beginning at 1 p.m., on "marking the 80th anniversary of the opening of the Bretton Woods Conference.

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

Recommended Weekend Reads

June 28 - 30, 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 French Elections

• Emmanuel Macron, destroyer of worlds   UnHerd

  Following the recent shock EU Parliamentary elections, Europe was further shocked by French President Emmanuel Macron’s almost instantaneous decision to call snap elections. In this fascinating and quite detailed report, Macron’s closest political allies and aides seem to be the most shocked of all. What drove Macron to make the decision? This report explains a lot about Macron’s thinking and vision going forward.

• Tracking the French Election Polls and Vote Count   Politico EU

  Politico has set up a great site to allow anyone to track the latest news on the French legislative elections which begin this weekend.

Tensions in the South China Sea

• High noon at Second Thomas Shoal   The Australian Strategic Policy Institute

  China has identified the beleaguered garrison at Second Thomas Shoal as a weak link among the South China Sea features physically occupied by the Philippines and, by extension, the US-Philippines alliance.  While Manila has held its nerve against Beijing’s mounting pressure tactics and holds the moral high ground in the South China Sea, it’s not clear yet that it has a viable strategy to counter Beijing’s maritime juggernaut.  China is obviously willing to escalate. As it does, the Philippines, in trying to hang on, will probably need military support from the United States, its treaty ally. Another violent incident could invoke the US obligation to defend the Philippines against armed attack.

• Second Thomas Shoal   Asia Maritime Transparency Initiative

  What is the Second Thomas Shoal?  Where is it?  And why is China trying to claim it even though it belongs to the Philippines?  This link explains it all via excellent satellite photographs and analysis.

Russia/Ukraine

• How Russia Exports Ukrainian Grain As Its Own: An Investigation    Radio Free Europe/Radio Liberty

  Russian firms shipped tens of thousands of tons of wheat and peas out of occupied parts of Ukraine in 2023 to EU member Spain, NATO member Turkey, and Azerbaijan, the investigative unit of RFE/RL’s Ukrainian Service, Schemes, and its partners have found.  Similar amounts of barley and corn reached Moscow allies Iran and Syria, which have an established track record of buying Ukrainian grain appropriated by Russia.  In an investigation based on official Russian documents and other sources, At least 6.4 million tons of wheat alone were harvested from Russian-occupied Crimea and Russian-held parts of the Donetsk, Kherson, Luhansk, and Zaporizhzhya regions in 2023, according to satellite estimates by NASA’s Harvest program, which tracks food-security threats. SeaKrime, a nongovernmental Ukrainian project that tracks Russia’s illegal grain shipments from Ukraine, has reported that 2 million tons of that harvest were shipped abroad from Crimea’s ports.

Americas

• The U.S. EXIM Bank in an Age of Great Power Competition    Daniel Runde/Center for Strategic and International Studies

  The U.S. Export-Import Bank (EXIM), the United States’ official export credit agency (ECA), is an independent, executive branch institution that supports U.S. businesses by financing the exports of goods and services.  During the last 15 years, EXIM, once the global ECA gold standard, has been underutilized as it has struggled politically.  Over this same period the global export credit landscape has evolved significantly, with governments around the globe using their ECAs more as instruments of industrial policy and to strategically boost their manufacturing competitiveness and strategic influence in critical emerging and frontier markets. Most notable in its ascendance as a global export credit player, the People’s Republic of China (PRC) has become a much bigger player in the space. At the same time, U.S. allies (and sometimes economic competitors) have also elevated their ECAs’ competitiveness and influence by offering more flexible terms and becoming more client-oriented compared to EXIM. As a result, EXIM not only has lost its global leadership position but is now at a significant competitive disadvantage compared to its competitors, including the PRC, in the ECA space. The U.S. EXIM bank will need a new slate of board members in January 2025, as three of the four current board members’ terms end January 20, 2025, and EXIM faces a reauthorization in 2026, offering an opportunity to rethink what tools and capabilities EXIM should have.

• Mid-Year Update on Latin America’s Economies   Americas Quarterly Podcast

  World Bank Chief Economist for Latin America and the Caribbean William Maloney discusses the economic outlook for Latin America, including addressing the question of how much nearshoring is really happening.
  

• The Future of U.S.–Mexico Relations    The National Interest

  Mexico voted overwhelmingly for Claudia Sheinbaum to become its next president. She won nearly 60 percent of the popular vote—6 percent more than the incumbent President Andres Manuel Lopez Obrador (AMLO) obtained in 2018. The political coalition led by the Morena Party secured commanding majorities in both houses of Congress and obtained victories in state elections across Mexico.  With this impressive victory, however, come challenges that will send clear signals about how this new super-majority intends to govern Mexico and what kind of partner the United States can expect to deal with.

Middle East

• Biden Faces a Hard Choice to Avert Israel’s Next War   Hal Brands/American Enterprise Institute

  Israel faces several grave decisions in the coming weeks — what to do in Gaza after the fighting in Rafah concludes, how to balance the campaign against Hamas with the quest to free the hostages, and whether to move decisively toward normalization with Saudi Arabia. But Israel’s most fateful choice is whether to pivot from one war against Hamas to another against Hezbollah. That simmering conflict is approaching a moment for decision. The best way for President Joe Biden to head off a devastating Israeli war with Hezbollah in Lebanon is to demonstrate that he will back Israel to the hilt.

• Israel isn’t ending the war in Gaza – just turning its attention to Hezbollah   Vox

  Israeli Prime Minister Benjamin Netanyahu indicated in a television interview recently that he intends to move some of the country’s forces to the northern border to fight the Lebanon-based military group Hezbollah. Were it not for the war in Gaza, that conflict might have already been capturing the world’s attention. Israeli Defense Minister Yoav Gallant is also visiting Washington this week in part to discuss the implications of that escalation with US officials.

• Iran’s New Nuclear Threat: How Tehran Has Weaponized Its Threshold Status   Foreign Affairs

  Tehran has long used threats of nuclear expansion to reduce international pressure.  After Iran attacked Israel in April and the world awaited Israel’s response, Iran’s military commander in charge of Iran’s nuclear sites warned that if Israel attacked the sites, Tehran could revise its nuclear doctrine.  This is a new and dangerous evolution in Iran’s strategy, which is to use the country’s enhanced ability to build a nuclear weapon as a deterrent. Iran has gradually acquired many of the key capabilities necessary to build a nuclear weapon, becoming a so-called threshold state. Iran can now, in a matter of days, produce enough highly enriched uranium to make a bomb. By highlighting its bomb-making potential and responding to specific provocations by threatening to take the final steps to build nuclear weapons, Tehran hopes it can prevent international sanctions and a strike against its nuclear program.

Geoeconomics

• Can Trump replace income taxes with tariffs?   Peterson Institute for International Economics

  In the list of untested policy ideas from former President Donald Trump, scrapping the federal income tax and replacing it with revenues from sky-high tariffs on imports is one of the most harmful.  Trump floated this fiscal swap when he met with Congressional Republicans last week, but it’s a deeply problematic idea for several reasons. For starters, it would cost jobs, ignite inflation, increase federal deficits, and cause a recession. It would also shift the tax burden away from the well-off, substantially increasing the tax burden on the poor and middle class.

• Sovereign Haircuts: 200 Years of Creditors Losses   Clemens M. Graf von Luckner, Josefin Meyer, Carmen M. Reinhart & Christoph Trebesch/National Bureau of Economic Research

  Abstract: We study sovereign external debt crises over the past 200 years, with a focus on creditor losses, or “haircuts”. Our sample covers 327 sovereign debt restructurings with external private creditors over 205 default spells since 1815. Creditor losses vary widely (from none to 100%), but the statistical distribution has remained remarkably stable over two centuries, with an average haircut of around 45 percent. The data also reveal that “serial restructurings”, meaning two or more debt exchanges in the same default spell, are on the rise. To account for this trend toward serial renegotiation, we introduce the “Bulow-Rogoff haircut” - a cumulative measure that captures the combined creditor loss across all restructurings during a single debt crisis. Using this measure, we show that longer debt crises deliver larger haircuts and that interim restructurings provide limited debt relief. We further examine past predictors of the size of haircuts and identify “rules of thumb” applicable to future defaults. Poorer countries, first-time debt issuers, and those that borrowed heavily from external creditors all record significantly higher haircuts in case of a default. Geopolitical shocks - such as wars, revolutions, or the break-up of empires – deliver the deepest haircuts. Sovereign debt investment disasters are often linked to (geo-)political disasters.

GeoData

Where Data and Geopolitics Intersect - and Explain Possible New Trends

June 24, 2024

US-China Decoupling in One Chart (with Two More Bonus Charts)

In the last few years, there have been a lot of discussions about the rate of decoupling between China and the US. We have noticed the discussion seems to regularly default to a month-by-month analysis or, at best, a quarterly analysis. Recently, CEIC Data published a two-year chart (2022 to 2024) showing Chinese exports not only to the US (which, indeed, have seen significant shrinkage) but also to the rest of the world. 

The only actual increase, as the chart below shows, is to Southeast Asia, Latin America, and, of course, Russia. It is probably the best single chart we have seen so far, making clear how decoupling has taken hold and, more importantly, how it is not just a US-China issue but also one impacting the EU and Japan (who counts China as their biggest trading partner). And for the other major trading partner not listed here - South Korea - the second chart below shows their plunge in trade with China versus the spike in trade with the US.

Finally, the third chart shows how increasingly dependent China is on industrial production and exports rather than encouraging consumer spending. So, exports are driving China’s economic recovery—but not to the US and EU like it used to rely on.

A Common Question From Clients: Where Has All the CHIPS Act and IRA Money Gone? The Answer: Most of It Has Not Been Distributed Yet - Meaning The Massive Fiscal Boost Has Yet to Hit the Economy

There is a lot of excitement in the markets about the power of CHIPS Act, the Infrastructure bill, and the Inflation Reduction Act (IRA) spending to turbo-charge the US economy. But the real question is when can we expect it? From the charts below (courtesy of Politico), not for a while. So far, less than 2 percent of available CHIPS funding has been awarded by the Department of Commerce. The simple reason for this is the construction of semiconductor manufacturing facilities is anything but “shovel-ready.” It takes years - our understanding is five years minimum - to construct facilities. And you can only imagine how long it takes to plan such buildings. 

The infrastructure bill and the IRA are moving along significantly faster in dispensing funds. But again, infrastructure building of any kind takes a long time to complete. 

All in all, the size and scope of the fiscal spending of three bills are going to be a significant plus for the US economy - but not in time for the 2024 elections. And, if anything, Washington politicians will be lucky if it has ramped up enough to significantly impact the economy in a major way by the 2026 midterms.

The US Election, Gasoline Prices, the Budget/Debt Crisis, and the SPR: Is the SPR Doing OK and Is It Ready for a Crisis? And Who Knew Congress has Been Using SPR Sales for Budget Funding?

The Financial Times recently had an interesting and timely piece reporting how President Biden is prepared to use oil from the US Strategic Petroleum Reserve (SPR) again in an attempt to drive down persistently high gas prices ahead of the election. We have had the opportunity to do extensive speaking engagements throughout the Midwest and South in recent months, and in talking to a broad array of voters at all sorts of economic levels, the price of gasoline is the top complaint (quickly followed by high food prices). Heading into November, it continues to be a tough challenge for the Biden Administration as various geopolitical and economic factors have whipsawed the price of oil for the last three years, especially since 2022. 

While there is little a President can actually do to drive down oil prices, one of the tools at hand is the ability to release portions of the SPR. Conceptually, added supply in the public market would seem like a smart way to push prices down. But In reality, SPR releases do little to impact prices as it just is not enough to impact the markets in a large enough way. Yet, President Biden (and previous Presidents) do it because, well, at least, they can look like they are doing something. 

President Biden has used that tool with vigor. He first announced on March 31, 2022, that the Administration would release 1 million barrels of oil per day from the reserve for the next 180 days, selling it at an average price of $96 per barrel—making it the biggest SPR sale in 40 years. This sale also lowered the SPR to its lowest levels in more than 40 years. 

So, that got us wondering: With news of a likely new Presidential mandate to release more SPR stock and ongoing - indeed, increasing - geopolitical tensions and rising shipping rates globally, we were curious about what the current SPR level stands (after all, the whole point of the SPR is have a massive oil reserve in times of crisis. And Republicans have been strong critics of the Biden Administration for allowing to get so low.

By way of background, the SPR is authorized to store  727 million barrels. Currently, according to recent Department of Energy stats, the current level is at 370.9 million barrels.

But there is another little known factor as to why the SPR is so low: Congress has figured out selling SPR reserves is a way to get additional revenue for federal budgets. For example, according to the US Energy Information Agency, “in 2018, Congress directed the sale of more than 100 million barrels of oil from the U.S. Strategic Petroleum Reserve (SPR) in U.S. government fiscal years (FY) 2022 through 2027. Based on legislated sales established in multiple acts of Congress, the SPR could decline by about 40% in the coming decade while still meeting requirements for petroleum import coverage. Assuming no other legislation over this period, the SPR could decline from 695 million barrels at the start of 2017 to about 410 million barrels at the start of 2028.” That money has gone to help fund the Highway Trust Fund and other government programs.

I guess the point of this post is to ask: Do we take the SPR seriously anymore as a critical national economic security program? Or has its time of necessity essentially passed, especially with the ability of US producers to massively increase the pumping of crude at US sites if needed?  Just looking at Permian (Texas and New Mexico) production, it seems there is more than enough oil if needed in an emergency.

And do US voters understand - as we march toward the November elections - that whatever President Biden does with SPR releases, it really is not going to impact the price of gasoline now or in the future?

U.S. Financial Regulatory Week Ahead

June 24 - 28, 2024

The Dog Days of Summer are settling into Washington, DC, and it shows this coming week.  Most federal financial regulatory agencies have little on the docket except for the Federal Reserve (see below).  The U.S. Senate is out of session until July 8 (although the House is in session this week—more on that below), and everyone is looking forward to the Fourth of July holiday.

First, we note that the Federal Reserve is scheduled to release the results of its annual stress tests on Wednesday. The results will show how 30 lenders with $100 billion in assets or more would fare under intense economic and political scenarios.

Getting back to Congress, as mentioned above, the House of Representatives is in session this week, and the House Financial Services Committee has three hearings scheduled aimed right at regulators, as their titles make clear: "Stress Testing: What's Inside the Black Box?", "Solutions in Search of a Problem: Chair Gensler's Equity Market Structure Reforms," and "Testimony of the HUD and FHFA Inspectors General" (which won't be a boring hearing and go to mismanagement claims).

We should also note that when the Senate returns the week of July 8, the Senate Banking Committee will hold a hearing on Christy Goldsmith Romero's nomination as the Chair of the Federal Deposit Insurance Corporation.  We are hearing growing opposition among Republican senators to her nomination, and our assessment at this point is that getting her confirmed will not be easy or happen quickly.

Finally, looking at the speech calendar this coming week, we will be listening closely to Federal Reserve Board Governor Michelle Bowman's speech, "Perspectives on U.S. Monetary Policy and Bank Capital Reform," at the Policy Exchange Event in London.  It will likely be another clear criticism of the Fed's proposed bank capital rules.

Below is a complete listing of what is happening at the financial regulatory agencies this week and in Congress.  Please let us know if you have any questions.

U.S. Congressional Hearings 

U.S. Senate

• The Senate is out until July 8.  But when they return, the Senate Banking Committee will hold a confirmation hearing on July 11 for Christy Goldsmith Romero to be the next Chair of the Federal Deposit Insurance Corporation.

House of Representatives

• ·Wednesday, June 26, 10:00 a.m. – The House Financial Services Housing and Insurance Subcommittee holds a hearing on "Testimony of the HUD and FHFA Inspectors General."

• Wednesday, June 26, 10:00 a.m. – The House Homeland Security Committee holds a hearing on "Finding 500,000: Addressing America's Cyber Workforce Gap."'

• Wednesday, June 26, 2:00 p.m. – The House Financial Services Financial Institutions and Monetary Policy Subcommittee holds a hearing on "Stress Testing: What's Inside the Black Box?"

• Thursday, June 27, 10:00 a.m. – The House Financial Services National Security, Illicit Finance, and International Financial Institutions Subcommittee holds a hearing entitled “The Role of the Export-Import (Ex-Im) Bank of the United States Amid Intensifying Economic Competition with China.”

• Thursday, June 27, 12:00 p.m. – The House Appropriations Transportation, Housing and Urban Development, and Related Agencies Subcommittee holds a markup of the FY2025 Transportation, Housing and Urban Development, and Related Agencies bill.

• Thursday, June 27, 2:00 p.m. – The House Financial Services Capital Markets Subcommittee holds a hearing entitled “Solutions in Search of a Problem: Chair Gensler’s Equity Market Structure Reforms.”

Joint Committees

• There are no hearings scheduled at this time.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• Monday, June 24, 3:00 p.m. – Federal Reserve Board Governor Christopher J. Waller gives opening remarks at the International Journal of Central Banking Annual Research Conference 2024, Rome, Italy.

• Tuesday, June 25, 7:00 a.m. – Federal Reserve Board Governor Michelle Bowman gives a speech entitled “Perspectives on U.S. Monetary Policy and Bank Capital Reform” at the Policy Exchange Event in London.

• Tuesday, June 25, 12:00 p.m. – Federal Reserve Board Governor Lisa D. Cook gives a speech entitled “Economic Outlook” at the Economic Club of New York  Luncheon, New York.

• Tuesday, June 25, 2:10 p.m. – Federal Reserve Board Governor Michelle W. Bowman gives pre-recorded opening remarks at the Midwest Cyber Workshop hosted by the Federal Reserve Banks of St. Louis, Chicago, and Kansas City.

• Friday, June 28, 12:00 p.m. – Federal Reserve Board  Governor Michelle W. Bowman patriciates in a conversation At the Ronald Reagan Presidential Foundation and Institute Leadership Council Conference (virtual).

U.S. Treasury Department

• There are no significant events scheduled at this time.

Department of Housing and Urban Development

• There are no significant events scheduled at this time.

Securities and Exchange Commission

• Tuesday, June 25, 2:05 p.m.: SEC Chair Gary Gensler will participate in a one-on-one interview moderated by Bloomberg Businessweek Editor Brad Stone at the Bloomberg Invest Summit in New York.

• Thursday, June 27, 2:00 p.m. – The SEC holds a Closed Meeting.

Commodities Futures Trading Commission

• There are no significant events scheduled at this time.

FINRA

• There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

• There are no significant events scheduled at this time.

Office of the Comptroller of the Currency

There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

• There are no significant events scheduled at this time.

National Credit Union Administration

• There are no significant events scheduled at this time.

Federal Trade Commission & Department of Justice Antitrust Division

• There are no significant events scheduled at this time.

Farm Credit Administration

• There are no significant events scheduled at this time.

The Federal Financial Institutions Examination Council

• There are no significant events scheduled at this time.

International Monetary Fund & World Bank

• There are no significant events scheduled at this time.

North American Securities Administrators Association

• There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

• Monday, June 24, 2:00 p.m. (East South America Time) – The Institute for International Finance holds its joint IIF-Interamerican Development Bank Tokenization Forum in São Paulo, Brazil.

• Tuesday, June 25, 8:00 a.m. – The US Chamber of Commerce hosts former SEC Chair Jay Clayton as the keynote speaker for a conference entitled “Investors and the Markets First.”

• Thursday, June 27, 8:00 a.m. – the Institute for International Finance holds its Global AI Update (virtual).

• Thursday, June 27, 11:00 a.m.  – SIFMA holds a Members Briefing (virtual) entitled “The US Economic Outlook.”

• Friday, June 28, 10:00 a.m. (Central Europe Time) – The Institute for International Finance holds its IIF/AWS Digital Resilience: Six Months to Dora in Brussels.

Think Tanks and Other Events

• Monday, June 24, 8:30 a.m. – The annual OECD USCIB Tax Conference is the premier US-based event of the year for up-to-date OECD tax policy developments and business interaction. 

• Tuesday, June 25, 9:30 a.m. – The Center for Strategic and International Studies holds a discussion on "AI (artificial intelligence) in the Field of Economic Development."

• Tuesday, June 25, 11:00 a.m. – The Center for American Progress holds a virtual discussion on "Increasing Competition and Fairness in Food and Agricultural Markets."

• Tuesday, June 25, 12:30 p.m. – The Tax Foundation is hosting an online discussion with Will McBride and Chris Edwards on universal savings accounts, their track record in Canada and the United Kingdom, and how they could help Americans save more. 

• Wednesday, June 26, 4:00 p.m. – The American Enterprise Institute for Public Policy Research holds a book discussion on "Ending ESG (environmental, social and governance) and Restoring the Economic Enlightenment."

• Wednesday, June 26, 12:00 p.m. – The Federalist Society for Law and Public Policy Studies holds a virtual discussion on "The SEC and Cryptocurrency."

• Thursday, June 27, 9:00 a.m. – The Peterson Institute for International Economics holds a virtual book discussion entitled “The Green Frontier: Assessing the Economic Implication of Climate Action.”

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

The Global Week Ahead

June 23 - 30, 2024

This week, the world and the markets will be captivated by the unfolding drama of US politics. President Biden and former President Trump are scheduled to engage in a high-stakes debate on Thursday night. The outcome of this debate, a pivotal moment in the political landscape, could reshape voters' perceptions of both candidates and sway the polls. Notably, this will be their last debate until September 10, adding to the anticipation and importance of this event.

Also this week, the US Supreme Court is expected to hand down a decision on the politically explosive issue of whether former President Trump can assert immunity for his pending federal case in which he was charged with conspiring to subvert the 2020 elections. If the Court rules in Trump's favor, then his January 6 federal case – which has been held up pending the Court's decision – will either proceed or be thrown out.

On the global stage, Iran is holding its presidential elections on Friday.  With six candidates in the running, most observers are predicting a low voter turnout and the likely election of a hardliner aligned with Supreme Leader Ali Khamenei's policies.  However, there is a potential game-changer - Masoud Pezeshkian, a reformist lawmaker.  If somehow he gets elected, it could open a new avenue for improving relations with the US and other Western powers.

France begins its snap parliamentary elections this week. French President Emmanuel Macron called the elections upon seeing the results of the recent EU parliamentary elections. Since then, a coalition of right-wing candidates led by the National Rally's Marine Le Pen has surged to a lead and likely majority of the French Parliament.

Finally, the EU will hold a Conference on Ukraine's accession to become a member, a major step on the trek to joining the EU. Ukraine will be presented with a general Negotiating Framework, establishing the guidelines and principles for the accession negotiations.

Looking at the global economic radar screen this week, markets will look at inflation indicators published in the US, Japan, Germany, France, Italy, and Spain. The US PCE comes out on Friday.   Also, the Conference Board's consumer confidence gauge in the US comes out on Tuesday.

Turning to Asia, the Bank of Japan releases its summary of opinions from its June meeting. Markets will also consider the June Tokyo CPI, which comes out on Friday. 

 Below are the rest of the major geopolitical and geoeconomic events and reports we are monitoring this coming week.

Sunday, June 23, 2024 

Global

·       The Financial Action Task Force (FATF) will hold plenary and working group meetings in Singapore.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Polish President Andrzej Duda begins a five-day state visit to China.

Economic Reports/Events –

·       Thailand New Car Sales (May)

Europe

Political/Social Events –

·       German Chancellor Olaf Scholz will receive Argentina's President Javier Milei in Berlin.  The two leaders are expected to trade issues.

·       Estonia celebrates Victory Day, commemorating the post-World War I fight against Soviet-Russian troops and the Baltic-German Landeswehr Army.

Economic Reports/Events –

·       European Central Bank Board Member Isabel Schnabel gives a  speech on the occasion of the conferral of the Weltwirtschaftlicher Preis 2024 to her by the Kiel Institut für Weltwirtschaft in Kiel, Germany.

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, June 24, 2024

Global

·       The UN Security Council is scheduled to hold a briefing, followed by consultations, on Somalia. In the afternoon, the Security Council is scheduled to hold a vote linked to the. International Residual Mechanism for Criminal Tribunals (IRMCT) and a briefing on Non-proliferation. 

Americas

Political/Social Events –

·       The US Senate is out of session until July 8.  The House of Representatives is in session this week.

·       The US Supreme Court will be releasing this week five major rulings, including their decision if former President Trump can assert immunity for his pending federal case where he charged with conspiring to subvert the 2020 elections.  A second case will decide whether the US Justice Department properly charged more than 300 defendants for the January 6 uprising at the US Capitol.  A third case will decide whether the Biden Administration improperly coerce social media companies to remove false or misleading content in violation of the Constitution.  A fourth case will decide whether courts should defer to federal regulatory agencies interpretations of ambiguous laws.  And the fifth case will decide whether governments can tell social media platforms how to moderate content without running afoul of the First Amendment.

·       In New York, Genaro García Luna, former Mexican secretary of public safety, to be sentenced in a New York courtroom after his conviction of continuing criminal enterprise, conspiracy to distribute narcotics, conspiracy to import narcotics, and making false statements.

·       Peace talks between the Colombian government and the FARC dissident guerrilla group Segunda Marquetalia will begin in Caracas, Venezuela.

Economic Reports/Events –

·       The International Monetary Fund gives their formal annual “check-up” of the US economy.

·       Federal Reserve Board Governor Christopher J. Waller gives opening remarks at the International Journal of Central Banking Annual Research Conference 2024, Rome, Italy.

·       San Francisco Federal Reserve Bank President Mary Daly to speak on monetary policy and the economy before an event in partnership with the Commonwealth Club World Affairs of California and the San Francisco Press Club.

·       Bank of Canada Governor Tiff Macklem speaks before the Winnipeg Chamber of Commerce.

·       Brazil FGV Consumer Confidence (June)/ Current Account (May)/ Foreign Direct Investment (May)/ BCB Focus Market Readout

·       Mexico Mid-month Inflation Rate (June)

·       Chile PPI (May)

·       USA Dallas Fed Manufacturing Index (June)

·       Paraguay PPI (May)

·       Argentina Unemployment Rate Q1/ GDP Growth Rate Q1/ Leading Indicator (May)

Asia

Political/Social Events –

·       A new session of parliament begins in India after the ruling Bharatiya Janata Party (BJP) won a third term in power following June elections, although without the sole majority it held for a decade.

·       In Hong Kong, the Court of Final Appeal holds a hearing for Jimmy Lai, the British citizen and former newspaper owner who was arrested in 2020 for his pro-democracy activities and criticism of the Chinese Communist party.

Economic Reports/Events –

·       In Hong Kong, Chinese property developers Kaisa Group Holdings and Shimao face court proceedings over wind-up petitions, amid the country's relentless real estate crisis. Kaisa's hearing is scheduled for today, while Shimao's is set for Wednesday.

·       New Zealand Imports/Exports/Balance of Trade (May)

·       Japan BoJ Summary of Opinions

·       Malaysia Inflation Rate (May)

·       Singapore Inflation Rate (May)

·       Taiwan Industrial Production (May)/ Retail Sales (May)/ Unemployment Rate (May)/ M2 Money Supply (May)

Europe

Political/Social Events –

·       The EU Financial Affairs Council meets in Luxembourg.  The ministers are expected to talk about the situation in Ukraine, the War in Gaza, the situation in the Western Balkans, Georgia, and the Great Lakes Region.

·       The EU Agriculture and Fisheries Council meets in Luxembourg.  They are scheduled to talk about Russia’s actions in the Baltic Sea, future fisheries relations with Norway, and sustainable fishing in the EU.

·       NATO Secretary General Jens Stoltenberg travels to France for meetings with French President Emmanuel Macron.

·       The European Space Forum takes place in Brussels and runs through June 25.  The Forum seeks to encourage “discussions currently taking place around the future of the EU Space Law and other important policy initiatives, this is a crucial period for the future shape of the space sector in Europe. The conference will provide a platform for multi-stakeholder discussions around the path towards the EU Single Market for Space; as well as focusing more broadly on strategic pillars of sustainability, resilience, competitiveness, economic security and on ensuring long-term autonomous access to space.”

·       President Alexander Lukashenko hosts Russian Foreign Minister Sergei Lavrov for meetings.

Economic Reports/Events –

·       European Central Bank Board Member Claudia Buch participates in panel discussion at the ACPR Conference "Ten years of SSM banking supervision: key achievements and main challenges ahead" in Paris, France.

·       European Central Bank Board Member Edouard Fernandez-Bollo Mr. Fernandez-Bollo chairs Roundtable 1 entitled: "What are the key achievements of 10 years of SSM supervision in Europe and the main expectations for the future?" at the ACPR Conference "Ten years of SSM banking supervision: key achievements and main challenges ahead" in Paris, France.

·       European Central Bank Board Member Elizabeth McCaul participates in a Roundtable at ACPR Conference "Ten years of SSM banking supervision: key achievements and main challenges ahead" in Paris, France.

·       European Central Bank Board Member Isabel Schnabel participates in a panel "Investing in Sovereignty – How to Create a New Single Market for a New World Order?" at Tag der Industrie (TDI) 2024 in Berlin, Germany.

·       Switzerland Current Account Q1

·       Turkey Business Confidence (June)/ Capacity Utilization (June)/ Foreign Exchange Reserves (June/14)

·       Germany Ifo Business Climate/ Current Conditions/ Expectations (June)

·       Poland Retail Sales (May)/ M3 Money Supply (May)

·       Slovenia Tourist Arrivals (May)

·       Great Britain CBI Industrial Trends Orders (June)

Middle East

Political/Social Events –

·       Iran holds its third presidential debate in Tehran. The topic of the debate will be “Iran’s role in the World.”

·       The 21st Annual Herzlia Security Conference will be held in in Herzliya, Israel.  A number of senior Israeli and US officials, including US Ambassador to Israel Jacob Lew and National Security Advisor to Vice President Kamala Harris will speak.

Economic Reports/Events –

·       Saudi Arabia Imports/Exports/Balance of Trade (April)

·       Kuwait Inflation Rate (May)/ M2 Money Supply (May)

·       Oman M2 Money Supply (April)/ Total Credit (April)/ Inflation Rate (May)

·       Jordan Industrial Production (April)

Africa

Political/Social Events –

·       The Global Peace Leadership Conference begins in Nairobi, Kenya.  The event brings more than 600 delegates from 25 countries to discuss sustainable peacebuilding.

Economic Reports/Events –

·       Ivory Coast Inflation Rate (May)

Tuesday, June 25, 2024 

Global

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

·       The Wall Street Journal’s Global Food Forum begins and runs through June 26.  Business leaders from the food industry and agriculture will be speaking.

Americas

Political/Social Events –

·       Peru’s President Dina Boluarte begins a visit to China where she will meet with President Xi Jinping.  She is also expected to meet with the CEOs of Huawei and BYD, two firms winning market share in Peru. 

·       In Miami, Florida, a US Federal Court will sentence former British Virgin Islands Premier Andrew Fahie after he was convicted of conspiracy to import a controlled substance, conspiracy to commit money laundering, interstate and foreign travel in aid of racketeering, and other charges.

Economic Reports/Events –

·       Federal Reserve Board Governor Michelle Bowman gives a speech entitled “Perspectives on U.S. Monetary Policy and Bank Capital Reform” at the Policy Exchange Event in London.

·       Federal Reserve Board Governor Lisa D. Cook gives a speech entitled “Economic Outlook” at the Economic Club of New York Luncheon, New York.

·       Federal Reserve Board Governor Michelle W. Bowman gives pre-recorded opening remarks at the Midwest Cyber Workshop hosted by the Federal Reserve Banks of St. Louis, Chicago, and Kansas City.

·       Brazil BCB Copom Meeting Minutes

·       Canada Inflation Rate (May)/ CPI Median (May)

·       USA Chicago Fed National Activity Index (May)/ Redbook (June/22)/ S&P/Case-Shiller Home Price (April)/ House Price Index (April)/ CB Consumer Confidence (June)/ Richmond Fed Manufacturing Index (June)/ Richmond Fed Services Index (June)/ Dallas Fed Services Index (June)/ Money Supply (May)/ API Crude Oil Stock Change (June/21)/ Fed Cook Speech/ Fed Bowman Speech

Asia

Political/Social Events –

·       South Korea Finance Minister Choi Sang-mok and Japan Finance Minister Shunichi Suzuki will hold meetings in Seoul.  They are working on how to “take appropriate steps to stabilize excessive volatility in their currencies.”

·       The National People's Congress Standing Committee convenes in Beijing for a four-day session. China's top legislative body has 10 bills on its agenda, including one that has raised eyebrows for seeking to ban behavior and clothing that "hurts the feelings" of the Chinese people. While there are likely to be draft changes, the current changes do not specify what images or words might be considered an offence, which could lead to a fine of 5,000 yuan ($680) or up to 15 days in prison.

·       In Dalian, China, the World Economic Forum’s 15th Annual Meeting of the New Champions starts and runs through June 27.  More than 1,500 corporate and political leaders are expected to attend.

·       China's Chang'e 6 lunar probe is due to return to Earth carrying the first samples ever collected from the far side of the moon.

Economic Reports/Events –

·       South Korea Consumer Confidence (June)

·       Australia Westpac Consumer Confidence Change & Index (June)

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

·       Malaysia Coincident Index (April)/ Leading Index (April)

·       Japan Coincident Index Final (April)/ Leading Economic Index Final (April)

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

Europe

Political/Social Events –

·       In France, Prime Minister Gabriel Attal, National Rally president Jordan Bardella, and left-wing alliance leader Manuel Bompard will debate on national television ahead of the parliamentary elections which begin later this week.

·       The EU will hold a Conference on the Accession of Ukraine to becoming a member of the EU as well as a Conference of Accession for Moldova to the European Union will be held in Luxembourg.  Both countries will be presented with a general Negotiating Framework, which establishes the guidelines and principles for the accession negotiations.

·       The EU General Affairs Council will meet in Luxembourg.  Ministers are expected to discuss preparations for the European Council meeting on June 27/28, including discussing the situation in Ukraine, the Middle East, EU security and defense, and EU competitiveness.

·       Today is Croatia Independence Day, commemorating the day in 1991 when the country broke away from Yugoslavia.

·       Slovenia celebrates Statehood Day, commemorating when it broke away from Yugoslavia in 1991.
Economic Reports/Events –

·       Spain GDP Growth Rate YoY Final Q1/ PPI (May)

·       Poland Unemployment Rate (May)

·       Turkey Tourist Arrivals (May)

Middle East

Political/Social Events –

·       Iran holds its fourth and final presidential debate in advance of the June 28 election.  The topic of this debate will be “The Economy.”

Economic Reports/Events –

·       Israel Manufacturing Production (April)

Africa

Political/Social Events –

·       President of the Republic of Congo Denis Sassou Nguesso will meet Russian President Vladimir Putin during a trip to Moscow.  Russia has been focusing on building their sphere of influence throughout Africa and, following a meeting between Putin and Nguesso during the Russia-Africa Summit last year, trade between the two countries has increased 85 percent.

·       Kenya’s Parliament will meet to vote on proposed changes to the 2024 finance law which has led to massive public protests around the country.

·       The Global Peace Leadership Conference will begin in Nairobi, Kenya.  The event brings more than 600 delegates from 25 countries to discuss sustainable peacebuilding.

·       Also in Nairobi, The Enhancing the Sustainability of Investment for Vaccine Manufacturing in Africa conference will begin and run through June 27.  The event is funded by the German Federal Ministry for Economic Cooperation and Development. Kenyan President William Ruto will be the keynote speaker.

·       Today is Mozambique Independence Day, commemorating when the country declared its independence from Portugal after a bloody insurgency in 1975.

Economic Reports/Events –

·       South Africa Leading Business Cycle Indicator (April)

Wednesday, June 26, 2024 

Global

·       The UN Security Council is scheduled to hold an open debate on children and armed conflict.

Americas

Political/Social Events –

·       US Secretary of Commerce Gina Raimondo hosts in Washington, D.C. South Korean Ahn Duk-geun and Japanese Ken Saito to discuss stable supply chains and how to mutually address China trade policy.

·       Mexico City’s Cutzamala water system could run dry.

Economic Reports/Events –

·       The Federal Reserve publishes its annual bank stress test results.

·       USA MBA Mortgage Market Index (June/21)/ MBA Purchase Index (June/21)/ New Home Sales (May)/ EIA Crude Oil Stocks Change (June/21)/ Bank Stress Tests/ Building Permits Final (May)

·       Brazil Bank Lending (May)/ IPCA mid-month CPI (June)

·       Canada Wholesale Sales (May)/ Manufacturing Sales (May)

·       Argentina Current Account Q1

Asia

Political/Social Events –

·       The US will commence Rim of the Pacific 2024 (Rimpac 24) military exercise, with 40 surface ships, three submarines, 14 national land forces, more than 150 aircraft and over 25,000 personnel taking part in the biennial exercise, this year hosted in Honolulu, Hawaii. It will run until August 2.

Economic Reports/Events –

·       Australia Westpac Leading Index (May)/ Monthly CPI Indicator (May)

·       Singapore Industrial Production (May)

·       India M3 Money Supply (June/14)

Europe

Political/Social Events –

·       The trial of Wall Street Journal reporter Evan Gershkovich on charges of espionage begins in Moscow.

·       British Prime Minister Rishi Sunak and opposition leader Keir Starmer square off in a BBC debate ahead of elections on July 4.

·       The sixteenth meeting of the EU Accession Conference with Montenegro at ministerial level will be held in Brussels. The meeting will take stock of Montenegro’s progress in meeting the interim benchmarks of the rule of law chapters – Chapter 23 on Judiciary and Fundamental rights, and Chapter 24 on Justice, Freedom and Security – and provide guidance for the work ahead.

Economic Reports/Events –

·       European Central Bank Board Member Philip R. Lane gives the keynote speech at the Bank of Finland's 3rd International Monetary Policy Conference on monetary policy in low and high inflation environments in Helsinki, Finland.

·       Germany GfK Consumer Confidence JUL

·       Hungary Current Account Q1

·       France Consumer Confidence (June)/ Unemployment Benefit Claims (May)/ Jobseekers Total (May)

·       Switzerland Economic Sentiment Index (June)

·       Great Britain CBI Distributive Trades (June)

·       Russia Corporate Profits (April)

·       Euro Area European Council

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Composite Economic Index (May)

Africa

Political/Social Events –

·       Madagascar Independence Day is celebrated, commemorating when the country was given its independence in 1960 from France.

·       Somalia Independence Day is observed today, marking the day the country was given its independence by the UK.

Economic Reports/Events –

·       Zimbabwe Inflation Rate (June)

Thursday, June 27, 2024

Global

·       The G7 Education Ministers meet in Trieste, Italy.

·       The UN Security Council is scheduled to hold a vote linked to the United Nations Disengagement Observer Force (UNDOF), to the Democratic Republic of the Congo sanctions, as well as to the African Transition Mission in Somalia (ATMIS). Also, this morning, the Security Council is scheduled to hold a briefing, followed by consultations, on the United Nations Multidimensional Integrated Stabilization Mission in the Central African Republic (MINUSCA).

Americas

Political/Social Events –

·       President Biden will debate former President Trump in their first presidential debate in Atlanta, Georgia.  CNN is hosting the debate.

Economic Reports/Events –

·       Brazil IGP-M Inflation (June)/ PPI (May)

·       Mexico Balance of Trade (May)/ Unemployment Rate (May)/ Interest Rate Decision

·       Canada Average Weekly Earnings (April)

·       USA Durable Goods Orders (May)/ GDP Growth Rate Final Q1/ Goods Trade Balance Adv (May)/ Initial Jobless Claims (June/22)/ Continuing Jobless Claims (June/15)/ PCE Prices Final Q1/ Real Consumer Spending Final Q1/ Pending Home Sales (May)/ EIA Natural Gas Stocks Change (June/21)/ Kansas Fed Composite Index (June)/ Kansas Fed Manufacturing Index (June)

·       Argentina Consumer Confidence (June)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea Business Confidence (June)

·       New Zealand ANZ Roy Morgan Consumer Confidence (June)/ ANZ Business Confidence (June)

·       Japan Foreign Bond Investment (June/22)/ Stock Investment by Foreigners (June/22)

·       Australia Consumer Inflation Expectations (June)

·       China Industrial Profits (YTD) (May)

·       Taiwan Consumer Confidence (June)

·       Malaysia PPI (May)

·       Philippines Interest Rate Decision

Europe

Political/Social Events –

·       The European Council will meet in Brussels through June 28.  The EU leaders will seek to come to an agreement on who the next President of the European Commission will be.  Tensions have emerged between Italian Prime Minister Georgia Meloni and French President Emmanual Macron and German Chancellor Olaf Scholz after they left her out of informal consultations on who should be the next president.  The leaders are also expected to discuss the situation in Ukraine, the Middle East, EU security and defense, and EU competitiveness.

·       In the UK, junior doctors in England begin a five-day strike in the British Medical Association’s ongoing dispute with the government over pay.

Economic Reports/Events –

·       European Central Bank Board Member Frank Elderson gives a speech on banking supervision at a conference hosted by Allen & Overy in NeuIsenburg, Germany.

·       The Bank of England publishes their annual report on the British financial system stability.

·       Slovakia Business/ Consumer Confidence (June)

·       Spain Retail Sales (May)/ Business Confidence (June)

·       Turkey Economic Confidence Index (June)/ TCMB Interest Rate Decision/ Overnight Lending & Borrowing Rate (June)/ Foreign Exchange Reserves (June/21)

·       Euro Area Loans to Companies & Households (May)/ M3 Money Supply (May)/ Economic Sentiment (June)/ Consumer Confidence Final (June)/ Consumer Inflation Expectations (June)/ Industrial Sentiment (June)/ Selling Price Expectations (June)/ Services Sentiment (June)

·       Italy Business/ Consumer Confidence (June)/ PPI (May)

·       Slovenia Retail Sales (May)

·       Greece Total Credit (May)

Middle East

Political/Social Events –

·       Iran’s Presidential Election

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       The UN-sponsored Africa CEO Summit begins in Nairobi, Kenya.  The event brings together business leaders and policymakers from Africa to discuss the future of Africa.

·       Eco t. nomic Reports/Events –

·       South Africa PPI (May) 

Friday, June 28, 2024 

Global

·       The Global Interdependence Center holds its Central Banking Series in Paris.  Among the speakers are Bank of France Governor François Villeroy de Galhau and Federal Reserve Bank of Richmond President Thomas Barkin.

Americas

Political/Social Events –

·       Peru’s President Dina Boluarte begins a visit to China where she will meet with President Xi Jinping.  She is also expected to meet with the CEOs of Huawei and BYD, two firms winning market share in Peru.  China is Peru’s largest trading partner and is trying to build a $4 billion deep-water port in in Chancay, Peru which is raising concerns in the US and elsewhere in South America.  But the Peruvian government is disputing the terms of the deal and, for now, the venture is on hold.

Economic Reports/Events –

·       Federal Reserve Board Governor Michelle W. Bowman patriciates in a conversation At the Ronald Reagan Presidential Foundation and Institute Leadership Council Conference (virtual).

·       Richmond Federal Reserve Bank President Thomas Barkin to speak before the Global Interdependence Center/Banque de France" Central Banking Series: Paris" conference.

·       USA Fed Barkin Speech/ Core PCE Price Index (May)/ PCE Price Index (May)/ Personal Income & Spending (May)/ Chicago PMI (June)/ Michigan Consumer Sentiment Final (June)/ Quarterly Grain Stocks – Corn/Soy/Wheat (June)/ Baker Hughes Total Rigs Count (June/28)

·       Canada CFIB Business Barometer (June)/ GDP (April)

·       Brazil Gross Debt to GDP (May)/ Nominal Budget Balance (May)/ Unemployment Rate (May)/ Net Payrolls (May)

·       Chile Copper Production (May)/ Industrial Production (May)/ Manufacturing Production (May)/ Retail Sales (May)/ Unemployment Rate (May)

·       Costa Rica GDP Growth Rate Q1/ Current Account Q1

·       Colombia Unemployment Rate (May)/ Interest Rate Decision/ Cement Production (May)

·       Paraguay GDP Growth Rate Q1/ Current Account Q1

·       Uruguay Balance of Trade (May)/ Current Account Q1

·       Argentina Economic Activity (April)

·       Panama Current Account Q4

·       Mexico Fiscal Balance (May)

Asia

Political/Social Events –

·       Mongolia holds parliamentary elections.

Economic Reports/Events –

·       South Korea Industrial Production (May)/ Retail Sales (May)

·       Japan Unemployment Rate (May)/ Jobs/applications ratio (May)/ Tokyo CPI (June)/ Retail Sales (May)/ Industrial Production (May)/ Housing Starts (May)/ Construction Orders (May)

·       Australia Housing Credit (May)/ Private Sector Credit (May)

·       Vietnam Foreign Direct Investment (June)

·       Philippines Budget Balance (May)

·       Singapore Export Prices (May)/ Import Prices (May)/ PPI (May)

·       Thailand Current Account (May)/ Private Consumption & Investment (May)

·       Malaysia M3 Money Supply (May)

·       China Current Account Final Q1

·       Sri Lanka Inflation Rate (June)/ PPI (May)/ Balance of Trade (May)

·       India Government Budget Value (May)/ Foreign Exchange Reserves (June/21)/ Infrastructure Output (May)/ Current Account Q1/ External Debt Q1

·       Pakistan Consumer Confidence (June)

Europe

Political/Social Events –

·       Ukraine celebrates Constitution Day, celebrates the date of the adoption of a new constitution in the Ukraine in 1996.

Economic Reports/Events –

·       Germany Retail Sales (May)/ Import Prices (May)/ Unemployment Rate (June)

·       Great Britain Current Account Q1/ GDP Growth Rate Final Q1/ Business Investment Final Q1

·       Hungary PPI (May)/ Unemployment Rate (May)

·       France Inflation Rate (June)/ Household Consumption (May)/ PPI (May)

·       Spain Inflation Rate (June)

·       Switzerland KOF Leading Indicators (June)

·       Turkey Imports/Exports/Balance of Trade Final (May)

·       Italy Industrial Sales (April)/ Inflation Rate (June)

·       Poland Inflation Rate (June)

·       Slovenia Inflation Rate (June)

·       Greece PPI (May)/ Retail Sales (April)

·       Ireland Retail Sales (May)

·       Russia Balance of Trade (May)/ Industrial Production (May)/ Retail Sales (May)/ Industrial Production (May)/ M2 Money Supply (May)

·       Ukraine Current Account (May)

Middle East

Political/Social Events –

·       Iran holds elections to select a new president after President Raisi died in a helicopter crash. Iran's Guardian Council, which oversees elections and decides who allowed to run for elected office, have approved six candidates.  They include Mohammad Baqer Qalibaf, Iran's hardline parliament speaker and former Revolutionary Guards commander, Saeed Jalili, a conservative, who was former chief nuclear negotiator and ran Supreme Leader Ayatollah Ali Khamenei's office for four years and Tehran's conservative mayor Alireza Zakani.  Also approved to run are Masoud Pezeshkian, a reformist lawmaker, Mostafa Pourmohammadi, a hardliner and a former interior minister, and Amir-Hossein Ghazizadeh Hashemi a conservative politician.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Djibouti’s Independence Day is celebrated today, marking the day in 1977 when it gained independence from France.

Economic Reports/Events –

·       South Africa M3 Money Supply (May)/ Private Sector Credit (May)/ Consumer Confidence Q2/ Balance of Trade (May)/ Budget Balance (May)

·       Nigeria Foreign Exchange Reserves (June)

·       Kenya Inflation Rate (June)

Saturday, June 29, 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 –

·       Vietnam Balance of Trade (June)/ GDP Growth Rate Q2/ Industrial Production (June)/ Inflation Rate (June)/ Retail Sales (June)/ Tourist Arrivals (June)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       European Central Bank Board Member Isabel Schnabel participates in the Petersberger Sommer-Dialog in Königswinter (Bonn), Germany.

·       France Legislative Election 1st Round

Middle East

Political/Social Events –

·       The 2024 Egypt-European Union Investment Conference will take place in Cairo, Egypt and runs through June 30.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Mauritania holds presidential elections.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, June 29, 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 –

·       China NBS Manufacturing PMI (June)/ NBS Non-Manufacturing PMI (June)/ NBS General PMI (June)

Europe

Political/Social Events –

·       The First Round of parliamentary voting begins in France.

·       Belgium’s six-month presidency of the Council of the European Union ends.  Hungary takes over the Presidency tomorrow, June 30.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Saudi Arabia Unemployment Rate Q1/ M3 Money Supply (May)/ Private Bank Lending (May)

Africa

Political/Social Events –

·       The Congo celebrates its Independence Day today, commemorating when the country gained its independence from Belgium in 1960.

·       Today is Independence Day in the Seychelles, celebrating the day in 1975 when it gained its independence from the UK.

Economic Reports/Events –

·       Nothing significant to report.

Recommended Weekend Reads

June 21 - 23, 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.   

Global

• Reuters Institute Digital News Report 2024

  The Oxford University-based Reuters Institute research center offers its annual assessment of how the news industry is doing globally, breaking it down by major national markets.  Overall, the study finds the news media increasingly challenged on many fronts and makes the point that the report is “filled with examples of layoffs, closures, and other cuts due to a combination of rising costs, falling advertising revenues, and sharp declines in traffic from social media.”  The report goes on to detail that “In many countries, especially outside Europe and the United States, we find a significant further decline in the use of Facebook for news and a growing reliance on a range of alternatives including private messaging apps and video networks. Facebook news consumption is down 4 percentage points across all countries in the last year.  News use across online platforms is fragmenting, with six networks now reaching at least 10% of our respondents, compared with just two a decade ago. YouTube is used for news by almost a third (31%) of our global sample each week, WhatsApp by around a fifth (21%), while TikTok (13%) has overtaken Twitter (10%), now rebranded X, for the first time.”

Americas

• The U.S. Counterweight in Mexico   Ryan Berg/Connor Pfeiffer Americas Quarterly

  The sweeping victory of Claudia Sheinbaum and the political coalition of her mentor, Mexican President Andrés Manuel López Obrador (AMLO), on June 2 leaves Mexico’s opposition in shambles. Sheinbaum’s political opponents will control less than a third of the nation’s Chamber of Deputies and are only a few defections away from the same fate in the Senate. Mexico would become the fifth Latin American country with a legislative supermajority.   Facing this qualified majority, the opposition would likely be powerless to stop a suite of 18 constitutional changes introduced in February, including proposals to target the Supreme Court and National Electoral Institute (INE), two of the country’s strongest independent institutions.   Domestic checks on power will likely evaporate. This would likely leave Washington as the main counterweight capable of protecting Mexico’s democratic institutions, the rule of law, and liberalized economy.  As Mexico’s largest trading partner, Mexico’s biggest investor, and the external actor most invested in stemming the country’s dual security and migration crisis, the U.S. must take this role seriously and have a credible Mexico policy that preserves its interests and seeks cooperation, where possible.

• Feeling the Stones: Chinese Development Finance To Latin America and the Caribbean 2023  The Dialogue

  The Latin American/Caribbean (LAC) region continues to receive relatively few loans from China’s development finance institutions (DFIs) despite high rates of lending in previous years.   In 2023, just two loans were recorded to Brazil total of $1.3 billion, slightly up from 2022 when the Chinese DFIs loaned $863 billion.   There are many reasons for the decline over time to the LAC, including China’s own domestic economic challenges as well as the China National Financial Regulatory Administration implemented sector-specific measures to strengthen the supervision of the financial industry. 

• Investing in Science and Technology: The United States Needs to Up Its Game   Center for Strategic and International Studies

  The United States is facing a challenge to its global leadership in science and technology that is more serious than any it has confronted since gaining that position after World War II. Within the relatively short span of two decades, China has emerged as a formidable rival. The limited appreciation of the nature of this rivalry with China was recently underscored by the failure of the U.S. Congress to appropriate the funds previously authorized for the largest part of the CHIPS and Science Act of 2022 while simultaneously cutting the budgets of key federal science and technology agencies for fiscal year 2024. This is all the more disappointing given that the same week, China announced a 10 percent increase in its already significant levels of public spending on research and development (R&D). The U.S.-China technology rivalry has strategic implications that can ultimately determine the outcome of a potential military confrontation, should one come about. Moreover, as U.S. technology leadership declines, the risks of economic and military challenges will rise.
  

China

• Leveraging Killed China’s Bid for Leadership  Derek Scissors/American Enterprise Institute

  China’s debt performance over the past 15 years, including the entirety of President Xi’s rule, has been historically awful – far worse than America’s, even while the US has been fiscally irresponsible.  Monetary indicators suggest that China’s debt situation will continue to slowly deteriorate for the next few years.   The author argues that even if America’s debt situation deteriorates as well, the size gap between the two economies indicates China cannot catch up while carrying so much debt.

• How China’s Overcapacity Holds Back Emerging Economies   the Rhodium Group

  Since 2019, weak domestic demand and expanding industrial capacity have combined to balloon China’s manufacturing trade surplus. While growing Chinese exports benefit developing countries to some extent by providing inputs for their local industries, they also contribute to China’s rising market power, creating new vulnerabilities for the developing world. It has long been assumed that China’s rise up the value chain would create a growing market for labor-intensive manufactured goods from other emerging markets. These hopes will be dashed if Beijing cannot restart the engines of its own domestic growth and absorb more of what it currently exports. Unless Beijing implements serious demand reforms, developing nations will be crowded out of manufacturing by Chinese overcapacity, leaving them dependent and without export opportunities.

BRICS & the U.S. Dollar

• Xi, Putin Score Wins as More Asia Leaders Aim to Join BRICS   Bloomberg

  As Russian President Vladimir Putin and Chinese Premier Li Qiang wrapped up separate meetings in Southeast Asia this week, the two partners in the BRICS economic bloc encountered a region keen to join a group seen as a hedge against Western-led institutions.

• Top Dollar: Why the Dominance of America’s Currency is Harder Than Ever to Overturn    Foreign Affairs

  The U.S. economy is no longer the colossus it once was. Its public debt is gargantuan and rising, and policymaking in Washington is erratic and unpredictable. Persistent threats of debt defaults undercut the perception that U.S. government bonds are safe.  Therefore, it would be no surprise, then, if the dollar were rapidly losing its power. But in fact the opposite is happening: the trends that would be expected to weaken the dollar, many of them driven by U.S. policy, are only strengthening its global dominance. The dollar remains on top in part because of the U.S. economy’s size and dynamism relative to other major economies. But more than that, although American institutions are fraying, those in other parts of the world are in no better shape, with populism and authoritarianism on the rise. Moreover, economic and geopolitical turmoil serves only to intensify the quest for safe investments, usually leading investors back to the dollar, which remains the most trusted currency. The United States financial markets are much larger than those of other countries, making dollar assets easier and cheaper to buy and sell.
  

• The World After the West: Zarokol on Turkey   Re-Order Podcast/European Council on Foreign Relations

  The growth in membership to organizations such as BRICS+, the New Development Bank, and the Shanghai Cooperation Organization demonstrates the continued rise of ‘middle powers’ – countries that belong to neither the West nor the global south but play a significant role in the developing world order. This week, ECFR director Mark Leonard talks with Ayşe Zarakol, professor of international relations at the University of Cambridge and author of “Before the West: the Rise and Fall of Eastern World Order” (2022), to discuss the framework of global order beyond its Western conceptions. How do middle-power institutions leverage their membership to develop an identity separate from the historically dominant blocs? What can non-Western institutions such as BRICS+ offer dissatisfied ‘middle’ countries? And how is Turkey using these in the context of a new global order?

Africa

• Africa and the Economic Struggle of Great Power Politics   Arsenal of Democracy Podcast/The Hudson Institute

  Hudson Nonresident Fellow James Barnett joins the show from Nigeria to paint a picture of Africa’s economic and political landscape. France, the United States, Russia, China, and Saudi Arabia are all involved with the continent through either foreign direct investment, humanitarian aid, military support, and/or peacekeeping operations. Barnett gives his outlook on how the West is perceived regionally and whether Chinese and Russian initiatives in Africa will have a long-lasting impact.  

Geoeconomics & Finance

• Trademarks in Banking   Federal Reserve Board Finance and Economics Discussion Series

  Abstract: One in five banks in the United States share a similar name. This can increase the likelihood of confusion among customers in the event of an idiosyncratic shock to a similarly named bank. We find that banks that share their name with a failed bank experience a half percent drop in transaction deposits relative to banks with similar characteristics but different names. This effect doubles for failures that are covered in media. We rationalize our findings via a model of financial contagion without fundamental linkages. Our model explains that when distinguishing banks is more costly due to similar trademarks, depositors are more likely to confuse their banks’ condition resulting in financial contagion.

Chart of the Week

Who Is Turning to TikTok for News?

We noted in our lead Weekend Read above how the Reuters Institute has released its annual report on how the media industry is doing globally.  Coupled with the banning of TikTok in the U.S., India, and other nations, Statista breaks it down in a great chart showing the power of TikTok as a news provider.  In Thailand, 39 percent use TikTok as their source of news, Kenya comes in at 36 percent, Malaysia comes in at 31 percent, and Indonesia comes in at 39.  Only 9 percent of Americans use TikTok as their primary news source.

The Global Week Ahead

June 16 - 23, 2024

Last week was a busy week with the G7 Leaders' Summit and the Ukraine Peace Conference in Switzerland. This week will be less busy, but several important geopolitical events are worthwhile for the markets to watch closely. 

Of particular note, Russian President Vladimir Putin is embarking on two rare international trips, a deviation from his usual schedule since the International Criminal Court issued a warrant for his arrest.  His first stop is North Korea, marking his first visit since 2000, to discuss ongoing arms deals.  North Korea, in a show of support for Russia's War on Ukraine, is reportedly selling large quantities of ammunition to Russia, estimated to be more than 5 million artillery shells.  From there, Putin will travel to Vietnam for trade discussions and, potentially, another weapons deal.

Also this week, US National Security Advisor Jake Sullivan and Deputy Secretary of State Kurt Campbell travel to India for the first meetings between US and Indian officials since India's recent election.  They are expected to discuss further advanced security technology cooperation between the two nations.

Meanwhile, German Economics Minister Robert Holbeck travels to China to discuss China-EU trade issues.  Last week, the EU slapped 28 percent tariffs on Chinese electric vehicle (EV) imports and is looking to apply similar tough tariffs on Chinese wind and solar exports, moves that have enraged Beijing.

Looking at the global economic radar screen this week, markets are likely to be most focused on economic data releases coming from the US and China. The US releases retail sales and industrial production data. There are also quite a few Federal Reserve Presidents speaking this week. China will announce its 1-year MLF rate decision and other key data releases later in the week.

Elsewhere, the Bank of England, the Reserve Bank of Australia, and the Swiss National Bank all meet on interest rates.

Below are all the other major political and economic events taking place around the world we are watching this week:

Sunday, June 16, 2024

Global

·        The Muslim holiday of Eid al-Adha (one of the two main holidays celebrated in Islam) is celebrated through June 20.  Financial markets are closed in most Muslim countries.

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 –

·       China PBoC 1-Year MLF Announcement

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 –

·       Saudi Arabia Inflation Rate (May)/ Wholesale Prices (May)

·       Israel GDP Growth Annualized 2nd Est Q1

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Monday, June 17, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       President Biden will host NATO Secretary General Jens Stoltenberg.  The Secretary General is visiting Washington through June 20 and will also meet with Secretary of State Antony Blinken and House and Senate leaders.  He will then travel to Canada to meet

·       The US Department of Agriculture’s agribusiness conducts its first trade mission on Native Nations agricultural products takes place in Vancouver, Canada.

·       The House of Representatives is out of session this week in observation of Juneteenth federal holiday.  House Speaker Mike Johnson (R-LA) and other senior Republican Party figures will travel to Florida to meet former President Donald Trump.

·       In Bolivia, protesters are expected to march against shortages of fuel and U.S. dollars, blocking roads and creating border closures.

·       The Russian Naval fleet that conducted military drills in Cuba will conclude its activities.

·       In Argentina, today is the Commemoration of General Don Martín Miguel De Güemes Day, a public holiday. De Güemes is considered a hero of freedom and “the hero of the Gauchos.”

Economic Reports/Events –

·       Federal Reserve Board Governor Lisa D. Cook gives acceptance remarks at the 2024 Marshall Medal Forum: A US-UK Strategic and Economic Dialogue in Chicago.

·       Philadelphia Federal Reserve Bank President Patrick Harker gives a speech at the Global Interdependence Center’s 42nd Annual Monetary and Trade Conference

·       Canada Housing Starts (May)/ Foreign Securities Purchases (April)

·       USA NY Empire State Manufacturing Index (June)/ NOPA Crush Report/

·       Paraguay Consumer Confidence (May)

·       Brazil BCB Focus Market Readout

Asia

Political/Social Events –

·       Australian Prime Minister Anthony Albanese and Chinese Premier Li Qiang make joint remarks to the media after a signing ceremony in Canberra.  Li’s visit concludes tomorrow.

·       New Zealand Prime Minister Christopher Luxon will visit Japan to meet with Prime Minister Fumio Kishida. This is Luxon's first visit to Japan since he took the job in November. The two leaders are expected to discuss expanding trade ties and business cooperation, and exchange views on the increasingly contested geopolitical situation in the Indo-Pacific region.

·       China and South Korea hold a 2+2 Security Talks in Seoul.  

·       Pakistan's government will observe a three-day public holiday through June 19 for the Muslim holiday Eid al-Adha.

Economic Reports/Events –

·       New Zealand Composite & Services NZ PCI (May)

·       Japan Machinery Orders (April)

·       Singapore Non-Oil Exports (May)

·       Australia Consumer Inflation Expectations (June)

·       China House Price Index (May)/ Industrial Production (May)/ Fixed Asset Investment (YTD) (May)/ Unemployment Rate (May)/ NBS Press Conference

·       Philippines Cash Remittances (April)

Europe

Political/Social Events –

·       France begins the first official day of the parliamentary election campaign.

·       There will be an informal leader meeting of the European Council.  EU leaders will discuss the next institutional cycle. The European Council is central in designating the next high-profile EU-level roles, namely: electing the President of the European Council, nominating the President of the European Commission, and appointing the High Representative of the Union for Foreign Affairs and Security Policy.

·       The EU Environmental Council meets.  They are scheduled to reach a general agreement on the approach for the waste framework directive and also try to reach a general approach on the Green Claims Directive.

·       Today is Iceland Independence Day, marking the day in 1944 the country gained its independence from Denmark.

Economic Reports/Events –

·       European Central Bank Vice President Luis de Guindos gives remarks followed by Q&A at a seminar organized by the Universidad Internacional Menendez Pelayo and Asociación de Periodistas de Information Econónomica (APIE) in Santander, Spain.

·       European Central Bank Board Member Philip R. Lane participates in an on-stage conversation and Q&A at Reuters Newsmakers event in London, United Kingdom.

·       Switzerland SECO Economic Forecasts

·       Italy Inflation Rate Final (May)

·       Spain Balance of Trade (April)

·       Euro Area Labour Cost Index Final Q1/ Wage Growth Q1/ Consumer Inflation Expectations (April)

·       Ireland Balance of Trade (April)

·       Poland Core Inflation Rate (May)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Current Account Q1/ M1 Money Supply (May)

·       Kazakhstan Industrial Production (May)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Angola Foreign Exchange Reserves (May)/ M3 Money Supply (May)

Tuesday, June 18, 2024

Global

·       The UN Security Council is scheduled to hold a briefing, followed by consultations, on Sudan. In the afternoon, the Security Council is scheduled to hold a briefing on Ukraine.  

Americas

Political/Social Events –

·       US Deputy Secretary of State Kurt Campbell and National Security Advisor Jake Sullivan travel to New Delhi, India for meetings with India’s National Security Advisor Ajit Doval.  They are expected to discuss technology cooperation and the U.S.-India Initiative on Critical Emerging Technology (iCET) launched in January 2023.

·       Argentine President Javier Milei will visit Prague, Czech Republic.

Economic Reports/Events –

·       Federal Reserve Board Governor Adriana D. Kugler give a speech on  “The Economic Outlook and Monetary Policy” at the Peterson Institute for International Economics in Washington, D.C.

·       Richmond Federal Reserve Bank President Thomas Barkin to participate in an MNI Webcast discussion.

·       Chicago Federal Reserve Bank President Austan Goolsbee to participate in"Economic and Monetary Policy" panel before hybrid 2024 Marshall Forum.

·       St. Louis Federal Reserve Bank President Alberto Musalem to speak at CFA Society St. Louis luncheon.

·       Dallas Federal Reserve Bank President Lorie Logan to participate in moderated question-and-answer session before the Headliners Club Speaker Series in Austin, Texas.

·       Mexico Aggregate Demand Q1/ Private Spending Q1

·       USA Retail Sales (May)/ Redbook (June/15)/ Capacity Utilization (May)/ Industrial Production (May)/ Manufacturing Production (May)/ Manufacturing Production (May)/ NY Fed Treasury Purchases 0 to 1 yrs/Net Long-term TIC Flows (April)/ Foreign Bond Investment (April)/ Overall Net Capital Flows (April)/ API Crude Oil Stock Change (June/14)

·       Colombia ISE Economic Activity (April)

·       Chile Interest Rate Decision

Asia

Political/Social Events –

·       Russian President Vladimir Putin travels to North Korea for meetings with Kim Jong-un in Pyongyang.  The two leaders are expected to discuss additional military arms deals (North Korea is selling significant amounts of ammunition to Russia to assist them in their war on Ukraine).

·       Thailand is quickly moving toward a political crisis as the government is expected to indict former Prime Minister Thaksin Shinawatra for allegedly violating the country's law against insulting the monarchy and for a computer crime.  Additionally, the Constitutional Court will hear a case to dissolve the country’s main opposition party, the Move Forward Party and hear a case seeking the ouster of Prime Minister Srettha Thavisin for appointing a convicted felon to his Cabinet.

·       China will officially mark its 618 online Shopping Festival, though early shopping is already ongoing.

·       South Korean doctors will strike to protest medical school admittance reforms.

Economic Reports/Events –

·       Australia Reserve Bank Governor Connolly Speech/ Reserve Bank’s Interest Rate Decision/ RBA Press Conference

·       Singapore Balance of Trade (May)

·       China FDI (YTD) (May)

·       Sri Lanka Manufacturing & Services PMI (May)

·       New Zealand Global Dairy Trade Price Index (June/18)

Europe

Political/Social Events –

·       The EU General Affairs Council (Cohesion) will meet in Brussels. Ministers will exchange views on the link between cohesion policy and the EU strategic agenda for 2024-2029, set to be adopted by the European Council at its meeting on 27 and 28 June 2024.

·       The EU Transport, Telecommunications and Energy Council (Transport) will meet in Brussels.  They are expected to agree the Council’s position (‘general approach’) on the following legislative files concerning maritime safety and inland waterways, respectively:  the new regulation on the European Maritime Safety Agency (EMSA) and the revised directive on river information services (RIS).

Economic Reports/Events –

·       There is a non-monetary policy meeting (virtual) of the Governing Council of the European Central Bank.

·       European Central Bank Vice President Luis de Guindo speaks at a joint conference of the European Commission and the European Central Bank on European Financial Integration in Frankfurt, Germany.

·       European Central Bank Board Member Piero Cipollone chairs Session 2  -"A single EU financial markets supervision - Approaches and potential benefits" at the joint conference of the European Commission and the European Central Bank on European Financial Integration in Frankfurt, Germany.

·       Slovakia Harmonized Inflation Rate (May)

·       Euro Area Inflation Rate Final (May)/ ZEW Economic Sentiment Index (June)/ CPI Final (May)

·       Germany ZEW Economic Sentiment Index (June)/ ZEW Current Conditions (June)

·       Hungary Deposit Interest Rate (June)/ Inflation Report/ Interest Rate Decision

·       Belarus GDP (May)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Today is Seychelles Constitution Day, marking the day in 1993 when a referendum was held making the country a multi-party democracy.

Economic Reports/Events –

·       Nothing significant to report.

Wednesday, June 19, 2024

Global

·       The UN Security Council is scheduled to hold a briefing, followed by consultations, on the United Nations Support Mission in Libya (UNSMIL) and Libya sanctions.

Americas

Political/Social Events –

·       The US celebrates Juneteenth National Independence Day, marking the day when enslaved people in Galveston, Texas, finally learned they were free two years after the Emancipation Proclamation had been issued.  It is a national holiday.  Banks and financial markets are closed.

·       Today is Artigas Day in Uruguay, a national holiday.  It marks the birthday of José Gervasio Artigas, who is considered the father of Uruguayan nationhood.

Economic Reports/Events –

·       USA NAHB Housing Market Index (June)/ International Monetary Market (IMM) Date

·       Canada BoC Summary of Deliberations

·       Argentina Unemployment Rate Q1/ Balance of Trade (May)/ Retail Sales (April)

·       Brazil Interest Rate Decision

Asia

Political/Social Events –

·       Chinese Premier Li Qiang arrives in Malaysia on the next stage of an eight-day visit to the region.

·       Russian President Vladimir Putin will visit Vietnam.  The US Government has rebuked Vietnam for visit.  Putin and Vietnamese leaders are expected to discuss trade, energy, and weapons deals.

Economic Reports/Events –

·       Japan BoJ Monetary Policy Meeting Minutes/ Reuters Tankan Index (June)/ Imports/ Exports/ Balance of Trade (May)

·       Australia RBA Chart Pack

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

·       New Zealand Current Account Q1

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Great Britain Inflation Rate (May)/ PPI Input & Output (May)/ Retail Price Index (May)

·       Euro Area ECB Non-Monetary Policy Meeting/ Current Account (April)/ Construction Output (April)/ Eurogroup Meeting

·       Italy Current Account (April)

·       Ireland Residential Property Prices (April)

·       Russia PPI (May)

·       Spain Consumer Confidence (May)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Oman M2 Money Supply (April)/ Total Credit (April)

·       Israel Inflation Expectations (June)

Africa

Political/Social Events –

·       South African President Cyril Ramaphosa will be inaugurated for a second term.  Ramaphosa gained the seat after striking a deal with the opposition parties following a weak electoral outcome.

Economic Reports/Events –

·       South Africa Inflation Rate (May)/ Retail Sales (April)

·       Mozambique GDP Growth Rate Q1

Thursday, June 20, 2024

Global

·       Today is the Summer Solstice, the longest day of the year in the northern hemisphere, is also considered the first day of summer for that half of the world.

·       In the morning, the UN Security Council is scheduled to hold an open debate on the Maintenance of international peace and security: Cybersecurity. The Secretary-General António Guterres is expected to deliver remarks. 

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Richmond Federal Reserve Bank President Thomas Barkin to speak before the Risk Management Association in Richmond, Virginia.

·       USA MBA Mortgage Market Index (June/14)/ MBA Purchase Index (June/14)/ Current Account Q1/ Initial Jobless Claims (June/15)/ Philadelphia Fed Manufacturing Index (June)/ Philly Fed Business Conditions (June)/Philly Fed CAPEX Index (June)/ EIA Crude Oil Stocks Change (June/14)

·       Mexico Retail Sales (April)

·       Canada New Housing Price Index (May)

·       Colombia Imports/ Balance of Trade (April)

·       Paraguay Interest Rate Decision

·       El Salvador Balance of Trade (May)

Asia

Political/Social Events –

·       In Tokyo, the campaign to become the next governor of Tokyo (which is the world’s biggest city) begins.

Economic Reports/Events –

·       New Zealand Westpac Consumer Confidence Q2/ GDP Growth Rate Q1

·       Japan Foreign Bond Investment (June/15)/ Stock Investment by Foreigners (June/15)

·       China Loan Prime Rate 1Y & 5Y (June)

·       Singapore Unemployment Rate Final Q1

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

·       Indonesia Lending Facility Rate (June)/ Interest Rate Decision/ Deposit Facility Rate (June)

·       Taiwan Export Orders (May)

·       Hong Kong Unemployment Rate (May)

Europe

Political/Social Events –

·       The Eurogroup (EU finance ministers and central bankers) will meet in Luxembourg.  They are expected to discuss IMF Article IV review of euro area policies, the international role of the euro with regard to stocktaking, and various other issues.

·       Arnold Schwarzenegger hosts his annual climate conference, the Austrian World Summit, in Vienna.  Speakers include European Commission president Ursula von der Leyen and UN secretary-general António Guterres.

·       The EU Employment, Social Policy, Health and Consumer Affairs Council (Social Policy) meets in Brussels.  The Council will seek to agree its negotiating position on a proposed directive amending the existing rules on European Works Councils, which represent workers in large multinational companies operating in at least two EU or European Economic Area (EEA) countries.

Economic Reports/Events –

·       Germany PPI (May)

·       Switzerland Balance of Trade (May)/ SNB Interest Rate Decision

·       Euro Area ECB General Council Meeting/ Consumer Confidence Flash (June)/ Ecofin Meeting

·       Turkey Consumer Confidence (June)/ Auto Production & Sales (May)/ Budget Balance (May)/ Central Government Debt (May)

·       Greece Current Account (April)

·       Italy Construction Output (April)

·       Poland Corporate Sector Wages (May)/ Employment Growth (May)/ Industrial Production (May)/ PPI (May)

·       Slovenia Consumer Confidence (June)

·       Serbia Current Account (April)

·       Great Britain BoE Interest Rate Decision/ BoE MPC Vote Cut/ BoE MPC Vote Hike/ BoE MPC Vote Unchanged/ MPC Meeting Minutes

·       Belarus Industrial Production (May)

·       Slovakia Unemployment Rate (May)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Unemployment Rate (May)/ Manufacturing PMI (May)

·       Oman Inflation Rate (May)

·       Jordan Industrial Production (April)

·       Qatar Inflation Rate (May)

Africa

Political/Social Events –

·       Today is Martyrs’ Day in Eritrea, commemorating those who died in fighting for freedom between 1961 and 1991 when the country finally gained its independence from Ethiopia.

Economic Reports/Events –

·       South Africa Building Permits (April) 

Friday, June 21, 2024

Global

·       The UN Security Council is scheduled to hold a briefing, followed by consultations, on the United Nations Assistance Mission in Afghanistan (UNAMA).  

Americas

Political/Social Events –

·       Argentine President Javier Milei will receive an award from the Juan Mariana Institute in Madrid, Spain.

Economic Reports/Events –

·       Mexico Economic Activity (April)

·       Canada PPI (May)/ Retail Sales (April)/ Raw Materials Prices (May)

·       USA S&P Global Composite/ Services/ Manufacturing PMI Flash (June)/ Existing Home Sales (May)/ EIA Natural Gas Stocks Change (June/14)/ Baker Hughes Total Rigs Count (June/21)

·       Brazil Federal Tax Revenues (May)

·       Costa Rica Balance of Trade (May)

Asia

Political/Social Events –

·       Taiwan's opposition-controlled legislature is scheduled to hold another vote on a controversial bill that would strengthen parliamentary powers and, critics say, undermine President Lai Ching-te. The bill was already passed by the Kuomintang-Taiwan People's Party alliance, but Lai's Democratic Progressive Party government sent it back to parliament for reconsideration.

Economic Reports/Events –

·       South Korea PPI (May)

·       Australia Judo Bank Composite/ Services/ Manufacturing PMI Flash (June)

·       Japan Inflation Rate (May)/ Jibun Bank Composite/ Services/ Manufacturing PMI Flash (June)

·       Indonesia M2 Money Supply (May)/ HSBC Bank Composite/ Services/ Manufacturing PMI Flash (June)/ Monetary Policy Meeting Minutes/ Bank Loan Growth (June/07)/ Deposit Growth (June/07)/ Foreign Exchange Reserves (June/14)

·       New Zealand Credit Card Spending (May)

·       Hong Kong Current Account Q1/ Inflation Rate (May)

Europe

Political/Social Events –

·       Germany's Economy Minister Robert Habeck will travel to Beijing, Shanghai and Hangzhou, China, through June 23.  Habeck is expected to discuss the EU’s tough new 38.1 percent tariffs on Electric Vehicles (EVs) and other trade measures the EU has taken against China.

·       The EU Economic and Financial Affairs Council meets in Luxembourg.  The Ministers will exchange views on the state of play of the implementation of the Recovery and Resilience Facility (RRF), Russia’s war on Ukraine, tax policy, and an update on various financial services issues.

·       The EU Employment, Social Policy, Health and Consumer Affairs Council (Health) meets in Luxembourg.  The ministers are expected to discuss ways forward for the regulatory incentives set out in the revision of the EU’s pharmaceutical legislation. The package aims to ensure the quality, safety and efficacy of medicines for EU patients and to harmonies the internal market.  They will also adopt a recommendation for setting out new measures on vaccine-preventable cancers.

Economic Reports/Events –

·       European Central Bank Board Member Isabel Schnabel on the occasion of the conferral of the Weltwirtschaftlicher Preis 2024 to her by the Kiel Institut für Weltwirtschaft in Kiel, Germany.

·       Great Britain Gfk Consumer Confidence (June)/ Retail Sales (May)/ Public Sector Net Borrowing (May)/ S&P Global Composite/ Services/ Manufacturing PMI Flash (June)

·       Hungary Gross Wage (April)

·       France Business Confidence (June)/ HCOB Bank Composite/ Services/ Manufacturing PMI Flash (June)

·       Germany HCOB Bank Composite/ Services/ Manufacturing PMI Flash (June)

·       Euro Area HCOB Bank Composite/ Services/ Manufacturing PMI Flash (June)

·       Slovenia Business Confidence (June)/ PPI (May)/ Unemployment Rate (April)

·       Ireland Wholesale Prices (May)

·       Slovakia Current Account (April)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Kuwait Private Bank Lending (May)

·       Lebanon Inflation Rate (May)

·       Qatar M2 Money Supply (May)/ Total Credit Growth (May)

·       Kazakhstan GDP (May)

Africa

Political/Social Events –

·       Today is Martyr’s Day in Toga, commemorating those who died fighting for the countries freedom which the country won in throwing off a dictatorship in 2005.

Economic Reports/Events –

·       Ghana GDP Growth Rate Q1/ PPI (May)

Saturday, June 22, 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 –

·       Japanese Emperor Naruhito and Empress Masako arrive in the UK ahead of a state visit running into next week.

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 –

·       Chad holds phase 2 of the presidential elections.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, June 23, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       The 10th SelectUSA Investment Summit takes place in Washington, D.C.  The Summit is the highest-profile event encouraging foreign direct investment into the US.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Thailand New Car Sales (May)

Europe

Political/Social Events –

·       Italy holds run-off municipal elections.

·       Today is the 8th anniversary of the Brexit vote in the UK.

·       Today is Luxembourg National Day, celebrating the official birthday of the ruler of Luxembourg.

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.

The U.S. Financial Regulatory Week Ahead

June 17 - 21, 2024

This week, Washington is experiencing a notable lull, primarily due to the Juneteenth holiday falling in the middle of the week.  The House of Representatives is on a break, and the Senate, although in session except on Wednesday, has a very light schedule.  This quiet period provides an opportunity to reflect on the recent activities and events in the financial regulatory sector.

Most federal regulators have little to no public events or meetings scheduled for this week, either.  CFTC Chair Rostin Behnam will be in Salzburg, Austria, to speak at the 2024 Salzburg Global Seminar Finance Forum.  SEC Chair Gary Gensler will give a keynote speech virtually at the Accelerated Settlement in the UK Conference, which will be held in person in London.

Last week was very active, highlighted by the House Financial Services Committee and the Senate Banking Committee, each holding their semiannual Consumer Financial Protection Bureau (CFPB) review hearings.  Republicans on both committees took hard swings at CFPB Director Rohit Chopra’s agenda.   This came as Republicans introduced new legislation that would give Congress direct funding approval and oversight of the CFPB (currently, the agency draws its budget from the Federal Reserve). 

Also last week, the House Financial Services Committee held a tough oversight hearing into the scandals tainting the Federal Deposit Insurance Corporation (FDIC) and its Chair, Marty Gruenberg.  The two partners from the law firm Cleary Gottlieb, who conducted an independent investigation into the scandals, testified.  Also testifying were Acting Comptroller of the Currency Michael Hsu and Johnathan McKernan, both directors of the FDIC.   It was a tough hearing and showed the political split on the board.  Hsu said it would be better for Gruenberg to stay until a replacement was named and confirmed by the Senate, and McKernan (a Republican) said Gruenberg should leave now.

However, these headlines were overtaken by the White House announcement of President Biden’s intention to nominate CFTC Commissioner Christy Goldsmith Romero to replace Gruenberg.  But that will not quiet the calls for Gruenberg to leave now – mainly because the political odd makers do not see Romero getting confirmed anytime soon – if ever.  Senator Elizabeth Warren (D-MA) cheered her nomination and called her “my kind of gal.”  That is enough of a warning bell for Senate Republicans who were already aware that Romero had been strongly anti-bank during her tenure at the CFTC, usually siding with progressive groups on various policy issues.  Considering it is an election year – meaning the Senate calendar is pretty short between now and November, and traditionally, little gets done anyway – we think it is a long shot for Romero to get confirmed this year.

Below is a complete listing of what is happening at the financial regulatory agencies this week and in Congress.  Please let us know if you have any questions.

U.S. Congressional Hearings

 U.S. Senate

·       There are no financial/regulatory-related hearings scheduled at this time.

House of Representatives

·       The House is not in session this week.

Joint Committees

·       There are no hearings scheduled at this time.

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

• ·Tuesday, June 18, 9:00 a.m. – Richmond Federal Reserve Bank President Thomas Barkin to participate in an MNI Webcast discussion.

• Tuesday, June 18, 12:30 p.m. Central Time: St. Louis Federal Reserve Bank President Alberto Musalem will speak at the CFA Society St. Louis luncheon.

• Tuesday, June 18, 12:00 p.m. Central Time: Dallas Federal Reserve Bank President Lorie Logan will participate in a moderated question-and-answer session before the Headliners Club Speaker Series in Austin, Texas.

• Tuesday, June 18, 1:00 p.m. – Federal Reserve Board Governor Adriana D. Kugler gives a speech on  “The Economic Outlook and Monetary Policy” at the Peterson Institute for International Economics in Washington, D.C.

• Thursday, June 20, 6;30 p.m. – Richmond Federal Reserve Bank President Thomas Barkin to speak before the Risk Management Association in Richmond, Virginia.

U.S. Treasury Department

• There are no significant events scheduled at this time.

Department of Housing and Urban Development

• There are no significant events scheduled at this time.

Securities and Exchange Commission

• Thursday, June 20 – 9:30 a.m. – SEC Chair Gary Gensler will give a virtual keynote followed by Q&A at the Accelerated Settlement in the UK Conference, which is being held in London.

Commodities Futures Trading Commission

• Tuesday, June 18, 9:00 a.m. (Austria) – CFTC Chairman Rostin Behnam will participate in a fireside chat at the 2024 Salzburg Global Seminar Finance Forum being held in Salzburg, Austria.

FINRA

• There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

• There are no significant events scheduled at this time.

Office of the Comptroller of the Currency

• There are no significant events scheduled at this time.

The Consumer Financial Protection Bureau

• There are no significant events scheduled at this time.

National Credit Union Administration

• There are no significant events scheduled at this time.

Federal Trade Commission & Department of Justice Antitrust Division

• Thursday, June 20, 12:30 p.m. – The Federal Trade Commission holds a Closed Meeting.

Farm Credit Administration

• There are no significant events scheduled at this time.

The Federal Financial Institutions Examination Council

• There are no significant events scheduled at this time.

International Monetary Fund & World Bank

• There are no significant events scheduled at this time.

North American Securities Administrators Association

• There are no significant events scheduled at this time.

Trade Associations & Think Tank Events

Trade Associations

Thursday, June 20 – SIFMA co-hosts with E&A their annual Broker-Deal Symposium in New York.

Think Tanks and Other Events

• Monday and Tuesday, June 17 & 18 – The American Enterprise Institute for Public Policy Research, and the University of Florida College of Law hold a discussion on "Complexities, Discontinuities, and Unintended Consequences of U.S. International Tax Rules: Options for Change.”  On Tuesday, they will hold two panels of particular interest to market participants entitled “Foreign-Derived Intangible Income Benefit" followed by one entitled "Taxation of Income from Controlled Foreign Corporations Stock: Sections 1248 and 245A"

• Tuesday, June 18, 9:00 a.m. – The Brookings Institution holds an event entitled “Outcomes-based financing: Possibility and promise in global health.”   They will discuss the use of impact bonds and other forms of outcomes-based financing.

• Tuesday, June 18, 12:00 p.m. – The Exchequer Club of Washington will host Jo Ann Barefoot, CEO and Co-Founder of the Alliance for Innovate Regulation.

• Wednesday, June 19, 6:00 p.m. – The Federalist Society for Law and Public Policy Studies holds a debate on "Is the Wealth Tax Constitutional?"

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

Iowa Farm Bureau 2024 Economic Summit

Des Moines, Iowa

June 14 - It was a tremendous pleasure to address the Iowa Farm Bureau’s 2024 Economic Summit in Des Moines, Iowa. The Farm Bureau put together a powerhouse slate of speakers and panels addressing the global economic, geopolitical, and market challenges farmers face today. Chicago Federal Reserve Bank President Austin Goolsbee was the keynote, offering some fascinating insights into what is going on with the U.S. economy and his views on when rates will be coming down.

You can access my presentation HERE. Let me know if you have any questions.

Recommended Weekend Reads

June 14 - 16, 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.   

Post-Election Mexico

• The Long Shadow of Violence in Mexico’s Elections   35 West Podcast/Center for Strategic and International Studies

  On June 2, nearly 60 million people cast their votes for the next president of Mexico, making it the largest election in Mexico’s history. However, the race was also marred by electoral violence, with more than three dozen candidates or prospective candidates murdered over the electoral season. Intimidation, coercion, and threats to family members further compelled many prospective candidates to withdraw from the race, illustrating the corrosive impact of violence and impunity for democratic institutions.  In this episode, Ryan C. Berg sits down with Chris Dalby, Director of World of Crime and author of the new book CJNG – A Quick Guide to Mexico’s Deadliest Cartel. Together, they discuss Mexico's evolving criminal landscape, the causes and consequences of electoral violence in Mexico, and what to expect from the new Sheinbaum administration's security policy. They also delve into the ways the United States and Mexico can reset security cooperation which has deteriorated in recent years.
  

• Populism’s Grip on Mexico: A Conversation with Denise Dresser   Foreign Affairs Podcast

  Earlier this month, Claudia Sheinbaum won a sweeping victory in Mexico’s presidential election. Although a lot of the coverage framed the results as a win for women and progressive politics, the story is far more complicated.  Mexico’s democracy is in trouble, warns Denise Dresser, a political analyst in Mexico. For years, Dresser has watched Sheinbaum’s party—and its previous leader, Andrés Manuel López Obrador—govern through polarization and the erosion of democratic institutions, even as the country struggles with violence, corruption, and persistent inequality. Dresser is a professor of political science at the Autonomous Technological Institute of Mexico. There is a chance that Sheinbaum will chart a different course. But if not, Dresser worries that Mexico could face an autocratic future.
  

• Inside Mexico’s anti-avocado militias   The Guardian

  The spread of the avocado is a story of greed, ambition, corruption, water shortages, cartel battles and, in a number of towns and villages, a fierce fightback.
  

• Latin America’s Big Opportunity   Shannon O’Neil/Council on Foreign Relations

  Over the last three decades, economic growth in Central Europe, East and Central Asia, Southeast Asia, and Sub-Saharan Africa has outpaced growth in Latin America, where most economies have actually become less sophisticated and diversified.  But now, current global trends are creating an opportunity for a long-delayed takeoff across Latin America.

The UK Elections

• Who’s Ahead in the British Polls?  A Day by Day UK Election Tracker   The Economist

  With the UK general election being held on July 4, here is a link to The Economist’s special election website showing where the UK political parties stand in the polls. As of June 13th, Labour is leading the ruling Conservatives by more than 20 percentage points. The other parties include the Liberal Democrats, Scottish National Party, Reform Party, and several smaller fringe parties) stand in the polls. 

• How Nigel Farage Blew up the UK Election  Politico EU

  Two weeks ago, Nigel Farage, the leader of the Brexit movement, was looking at his latest vanity project looked as a likely busted flush. Now it has the potential to upend the U.K. election — and reshape the future of British politics for good. For the first time on Thursday evening, an opinion poll from one of Britain’s most respected pollsters put Farage’s startup venture, Reform UK, ahead of its long-standing mainstream rival, the Conservative Party.

NATO Policy

• Developing An Economic Security Agenda for NATO   War on the Rocks

  As the NATO Summit in Washington DC approaches in July, the authors argue he assembled leaders should therefore initiate a NATO Economic Deterrence Initiative aimed at fortifying economic resilience and deterrence capabilities across the alliance. This initiative should include proposals to revitalize consultations, intelligence sharing, and policy coordination on economic security, adapting the alliance to a changing global landscape and sustaining the cohesion and unity that underpin collective defense. By reintegrating economic security into its strategic considerations, NATO can ensure a more comprehensive and resilient deterrent posture for the future.

U.S. Elections

• 2024 Election Outlook (June 2024)  The Tiber Creek Group

  Leading Washington lobbying firm Tiber Creek offers a superb overview of the state of the 2024U.S. elections, analyzing the Presidential, House, Senate, and Gubernatorial races and all the many nuances that is making this election season like no other in recent U.S. history.
  

• RFK Jr. on Polluters, Falconry, and Assassinations   The MeatEater Podcast

  If you not familiar with the MeatEater Show or MeatEater Podcast, they are the wildly popular outdoors hunting television show and podcast hosted by Steven Rinella.  Rinella is an American outdoorsman, conservationist, writer, and chef.  In this podcast, he talks with independent presidential candidate Robert F. Kennedy Jr.  Among the topics discussed: Brain worms (which Kennedy has suffered from) and bonding over parasites; getting mercury poisoning from eating all the fish you harvest; How Kennedy raised homing pigeons at age 7 and going on to become a master falconer; fighting polluters to keep water clean; making a list of every bad thing you ever did; focusing on what matters to people; government-subsidized vs. free market energy sources; Secret Service security; and more. 

Geoeconomics

• The Big Threat to Dollar Dominance is American Dysfunction   Steven Kamin &Mark Sobel/Financial Times

  In the 1960s, French finance minister Valéry Giscard d’Estaing lamented the dollar’s “exorbitant privilege”, longing for an international monetary system less reliant on the dollar and the shackles of US economic policy. In 2009, Governor Zhou Xiaochuan of the People’s Bank of China called for de-dollarization and a multipolar regime with an internationalized renminbi. Emerging markets joined the chorus, criticizing the spillovers from Fed monetary policy. But the wistful yearnings from seemingly every quarter of the world for the emergence of a non-dollar alternative system miss the point. Instead of reimagining the international monetary system, the focus should be on strengthening the underlying drivers and dynamics of the global economy.
  

• Food Policy in a Warming World   Allan Hsiao, Jacob Moscono & Karthik Sastry/NBER

  Do governments systematically intervene in agricultural markets in response to climate shocks? If so, what are the aggregate and distributional consequences? We construct a global dataset of agricultural policies and extreme heat exposure by country and crop since 1980. We find that extreme heat shocks to domestic production led to increased consumer assistance. This effect is persistent, primarily implemented via border policies, and stronger in election years when politicians are particularly responsive to constituent demands. Shocks to foreign production led to increased producer assistance, consistent with policymakers' targeting redistribution rather than price stabilization. Interpreted via a model, the estimates imply that policy responses almost fully stabilize prices in shocked markets, reducing losses to domestic consumers by 97% while increasing those to domestic producers and foreign consumers by 55% and 105%, respectively. Responsive policy exacerbates overall welfare losses from projected end-of-century climate shocks by 14%.

• Sleep: Educational Impact and Habit Formation National Bureau of Economic Research

  Abstract: There is growing evidence on the importance of sleep for productivity, but little is known about the impact of interventions targeting sleep.  In a field experiment among U.S. university students, we show that incentives for sleep increase both sleep and academic performance.  Motivated by theories of cue-based habit formation, our primary intervention couples personalized bedtime reminders with morning feedback and immediate rewards for sleeping at least seven hours on weeknights. Our results demonstrate that incentives to sleep can be a cost-effective tool for improving educational outcomes.

Technology

• The Big-Tech Clean Energy Crunch Is Here Wired

  As the world’s biggest companies race to build the infrastructure necessary to enable artificial intelligence, even remote Scottish wind farms are becoming indispensable. In Europe last year, $79.4 million was spent on new data center projects, according to research firm Global Data. Already in 2024, there are signs that demand is accelerating. Today Microsoft announced a $3.2 billion bet on Sweden data centers. Earlier this year, the company also said it would double its data center footprint in Germany, while also pledging a $4.3 billion data center investment for AI infrastructure in France. Amazon announced a network of data centers in the state of Brandenburg as part of a $8.5 billion investment in Germany, later dedicating another $17.1 billion to Spain. Google said it would spend $1.1 billion on its data center in Finland to drive AI growth.
  

• Catalyzing Crisis: A Primer on Artificial Intelligence, Catastrophes, and National Security  Center for a New American Security

  The arrival of ChatGPT in November 2022 initiated both great excitement and fear around the world about the potential and risks of artificial intelligence (AI). In response, several AI labs, national governments, and international bodies have launched new research and policy efforts to mitigate large-scale AI risks. However, growing efforts to mitigate these risks have also produced a divisive and often confusing debate about how to define, distinguish, and prioritize severe AI hazards. This categorical confusion could complicate policymakers’ efforts to discern the unique features and national security implications of the threats AI poses—and hinder efforts to address them. This report aims to: Demonstrate the growing importance of mitigating AI’s catastrophic risks for national security practitioners, clarify what AI’s catastrophic risks are (and are not), and introduce the dimensions of AI safety that will most shape catastrophic risks.
  

Leadership and Psychology

• CIA Clinical Psychologist Ursula Wilder on Profiling World Leaders   Intelligence Matters Podcast

  In this episode of Intelligence Matters, host and former CIA Director Michael Morell speaks with Ursula Wilder, a clinical psychologist at the Central Intelligence Agency, about why intelligence agencies conduct psychological profiles of world leaders, and how past policymakers have used what they have learned to make strategic decisions. Wilder, who also worked in CIA's counterterrorism center and Medical and Psychological Assessments unit, explains the "dark tetrad" of personality -- narcissism, paranoia, Machiavellianism and sadism -- and how those traits can influence how leaders make decisions and engage in negotiations. She and Morell also discuss how policymakers respond to psychological profiles compiled by government agencies.