Recommended Weekend Reads

July 26 -28, 2024

Please find below 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.

Latin America

• A Second Independence Day? Scenarios for Venezuela’s July 28 Election  Ryan Berg & Alexandra Winkler/Center for Strategic and International Studies

  Expectations for Venezuela’s upcoming elections on July 28 are astronomical. For many Venezuelans, the day represents something akin to a second independence day. Much is at stake: liberty, respect for fundamental human rights, economic and social prosperity, and the reunification of Venezuela’s many separated families, given that nearly 8 million have fled the Maduro regime’s authoritarian grip and unprecedented economic mismanagement.

• Meet the Candidates: Venezuela   Americas Quarterly

  Venezuela’s dictatorship is expected to hold a single-round election for president and vice president on July 28. Most observers do not expect the vote to be free or fair. The ruling PSUV party officially named President Nicolás Maduro as its candidate on January 25. After the nation’s Supreme Court barred leading opposition figure María Corina Machado from participating, Venezuela’s opposition coalition backed Edmundo González Urrutia as its candidate. We will occasionally update this page to reflect developments in the campaigns. AQ also asked a dozen nonpartisan experts on Venezuela to help us identify where each candidate stands on two spectrums: left versus right on economic matters and a more personalistic leadership style versus an emphasis on institutions. We’ve published the average response with a caveat: Platforms evolve, and so do candidates.

• What the U.S. Election Means for Latin America   Americas Quarterly

  Immigration, drug trafficking, nearshoring, and infrastructure investment are all important issues in this election—and they all touch on Latin America.  Former advisers from the Trump and Biden administrations write on the impact another term for their onetime boss would have on the region. 

Africa

• Who Speaks for Africa at COP?  Power and Politics at the UN Climate Negotiations   Carnegie Endowment for International Peace

  Although all of Africa contributes less than 4 percent to global greenhouse gases annually, many African countries are especially vulnerable to extreme weather events and are unable to adapt to long-term changes in the climate.1African countries experience an average of 5 to 15 percent GDP loss per year due to climate change.2 But when the countries who are party to the United Nations Framework Convention on Climate Change (UNFCCC) come together at their annual summit (the Conference of Parties, or COP) to discuss how to mitigate and adapt to the negative impacts of climate change, who speaks for the continent of Africa?

•   The Forgotten War in Congo   Foreign Affairs

  Last year, the conflict in the eastern Democratic Republic of the Congo turned 30. It is a grim milestone, and one that received almost no global attention. The silence isn’t a surprise. Since its inception, the war in Congo has excelled at evading international recognition. Few people noticed when the M23 Movement, the region’s biggest militia, rounded up and executed 171 civilians in November 2022. The world was quiet when Doctors Without Borders declared that they had treated 25,000 survivors of sexual violence in Congo last year. Almost no one outside Africa remembers that, in June, an armed Islamist group massacred 41 people in Congo’s northeast. Today, more than seven million Congolese are displaced, more than at any other time in history, and yet the war still barely features in global media. The New York Times has written 54 articles about Congo in the past twelve months, including ones on the environment and the country’s recent election. It has, by contrast, run 2,969 articles on Ukraine.

The Middle East

• In lawless Gaza, cigarette smuggling fuels attacks on aid trucks   Washington Post

  A black market for cigarettes is booming in the besieged Gaza Strip, a window into the lawlessness and desperation in the enclave nine months into Israel’s war against Hamas. The illicit cigarettes, one of Gaza’s last forms of currency, are hidden inside hollowed-out watermelons and boxes of diapers, smuggled on trucks through Israeli-controlled crossings, and sold for as much as $30 apiece.  Gangs lie in wait along the anarchic road in southern Gaza that runs through military zones, ransacking trucks in search of cigarettes, humanitarian officials say. Once cigarettes reach the open market, Hamas authorities try to take a cut of the sales through fines and extortion, according to traders and civilians. The black market is fueling attacks on humanitarian trucks, hampering desperately needed aid deliveries as relief officials warn of famine.

China 

• The Limits of the China Chip Ban    Foreign Affairs

  In 2022, the Biden administration rolled out export controls to prevent Beijing from obtaining advanced semiconductors and the equipment to produce them domestically. The stated objective of these restrictions was to deny China the cutting-edge AI capabilities it could use to modernize its nuclear and conventional weapons. However, these measures may also protect the United States’ technological and economic edge over China. Although leadership in AI is not officially stipulated as an aim of the restrictions, U.S. officials have regularly asserted that it is central to the country’s competitive economic advantage, which in turn advances its national security. However, the chip controls will probably fall short of achieving either outcome. They are unlikely to substantially slow Beijing’s military modernization, much of which can be accomplished using older legacy chips. Where cutting-edge AI chips are needed, the Chinese military can use previously imported chips, smuggled chips, and domestically designed and produced chips. By impeding China’s ability to develop and deploy AI throughout its economy, the export restrictions could slow China’s growth and curb its competitiveness, thereby helping the United States stay ahead.

• China’s Global Activity: Building Grabs the Spotlight from Owning  Derek Scissors - American Enterprise Institute

  China’s documented global investment shrank modestly in the first half of 2024. Auto and parts production led. However, the dollar value of construction activity surged year over year, topped by building power plants and refineries.  The Chinese Ministry of Commerce reports only good news for investment. Its post-COVID numbers are nearing the 2015–16 peak, which saw controversy around the world. There is no new controversy, suggesting investment is different now—likely stuck in offshore financial centers.  Chinese investment in the US was tiny in the first half of 2024. There are no equivalent figures for American investment in China and no sense of how much money supported Chinese technology or supply chains. Without this knowledge, the US cannot properly compete. 

Map & Chart of the Week

More Than 650,000 Russians have Emigrated Since the Start

of the Ukraine War. Did They Go?

The Bell, an independent Russian news outlet, conducted a study into the exodus of Russian’s following the invasion of Ukraine in February 2022.  According to their work, the Bell estimates a minimum of 650,000 people have left Russia – a number which is growing and creating a significant political and economic headache for the Kremlin and the Russian Central Bank as tensions in the labor market grow.

But where did all those Russians go?  Below is a map and chart breaking it all down.

U.S. Financial Regulatory Week Ahead

July 22 - 26, 2024

The Dog Days of Summer are upon us in Washington.  There is not much happening this coming week regulatory-wise, but we would note there are some interesting congressional hearings. 

Of particular note, the Senate Permanent Subcommittee on Investigations (PSI) will hold a hearing on Zelle Fraud.  Senior executives from Bank of America, J.P. Morgan, and Wells Fargo will testify about what exactly happened.  PSI is an unusual Subcommittee in Congress with special powers to conduct deep investigations into virtually anything.  But is long has been a source of intense investigations into financial services related fraud, its hearings can and often do lead to criminal indictments down the road from the US Department of Justice.

Also, this week, the Senate Banking Committee is holding a hearing about “Advancing National Security through Export Controls, Investment Security, and the Defense Production Act.”  While a good piece of the hearing will likely focus on the national security aspects of trade with China, sanctions on Russia, and other related issues, we think there is a good chance this will quickly veer into aspects of Nippon Steel’s ongoing bid to acquire U.S. Steel.  Considering the Chair of the Banking Committee is Senator Sherrod Brown (D-Ohio), a fierce critic of the deal who is in the re-election battle of his career, we cannot see him not taking the opportunity to speak out against the deal.

Finally, we will be watching FDIC Vice Chair Travis Hill speak this week at the American Enterprise Institute on proposed changes to banking regulation and resolution policies. If President Trump is elected in November, many see Hill as the natural choice to be the next FDIC Chair, so this could be a preview of his agenda in 2025.

Below is a listing of all the other significant regulatory-related events this coming week:

U.S. Congressional Hearings 

U.S. Senate

·       Tuesday, July 23, 3:30 p.m. – The Senate Permanent Subcommittee on Investigations holds a hearing on Zelle fraud, featuring executives from JPMorgan Chase, Bank of America, and Wells Fargo. 

·       Thursday, July 25, 10:00 a.m. – The Senate Banking Committee holds a hearing entitled “Advancing National Security through Export Controls, Investment Security, and the Defense Production Act.”

House of Representatives

·       Tuesday, July 23, 10:00 a.m. – The House Agriculture Committee holds a hearing on "Financial Conditions in Farm Country."

·       Tuesday, July 23, 10:00 a.m. – The House Financial Services Committee holds a hearing entitled “AI Innovation Explored: Insights into AI Applications I Financial Services and Housing.”

·       Wednesday, July 24, 10:00 a.m. – The House Financial Services National Security, Illicit Finance, and International Financial Institutions Subcommittee holds a hearing on "Wasteful Spending and Inefficiencies: Examining DoD Platform Performance and Costs."

·       Wednesday, July 24, 10:30 a.m. – The House Financial Services Committee holds a hearing on "Housing Solutions: Cutting Through Government Red Tape."

·       Thursday, July 25, 8:30 a.m. – The House Agriculture Commodity Markets, Digital Assets, and Rural Development Subcommittee holds a hearing on "Reauthorizing the CFTC: Stakeholder Perspectives."

US Regulatory Meetings & Events

Federal Reserve Board and Federal Reserve Banks

·       There are no significant events scheduled at this time.

U.S. Treasury Department

·       There are no significant events scheduled at this time.

Securities and Exchange Commission

·       Thursday, July 25, 12:00 p.m. – The Securities and Exchange Commission Office of Minority and Women Inclusion holds a virtual discussion with SEC Chair Gary Gensler.

Commodities Futures Trading Commission

· Tuesday, July 23, 9:30 a.m. – CFTC Commissioner Kristin N. Johnson will deliver the keynote address at the USDA Advisory Committee in Tarrytown, New York.

FINRA

·       There are no significant events scheduled at this time.

Federal Deposit Insurance Corporation

·       Wednesday, July 24, 2:00 p.m. – FDIC Vice Chair Travis Hill will speak at the American Enterprise Institute for Public Policy Research discussion on "Proposed Changes in Bank Regulatory and Resolution Policies."  

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.

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

• There are no significant events scheduled at this time.

Think Tanks and Other Events

• Wednesday, July 24, 9:00 a.m. – The Peterson Institute for International Economics holds a virtual discussion on "The Evolution of European Banking Supervision. “Claudia Buch, Chair of the European Central Bank Supervisory Board, will speak.

• Wednesday, July 24, 8:00 a.m. – The Atlantic Council holds a conference entitled “The Atlantic "Shaping the Global Economy: From Food Security to Digital Transformation.”

• Wednesday, July 24, 1:00 p.m. – The Federalist Society for Law and Public Policy Studies Corporations, Securities & Antitrust Practice Group holds a virtual discussion, beginning at 1 p.m., on "FTC Negative Option, Junk Fee, and Commercial Surveillance Rulemakings - Weighing Costs, Benefits and Litigation Risk in a Post-Chevron Environment."

• Wednesday, July 24, 2:00 p.m. – The American Enterprise Institute for Public Policy Research holds a discussion on "Proposed Changes in Bank Regulatory and Resolution Policies."  FDIC Vice Chair Travis Hill will speak.

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

The Global Week Ahead

July 21 - 28, 2024

The coming week will likely be the decisive week for the political future of President Joseph Biden.  Following weeks of growing calls from Democratic members of Congress and other Party leaders for him to withdraw from the 2024 presidential election, it appears the make-or-break moment is upon him and the nation.   Reports in recent days have swung wildly from “He’s going to announce today and endorse Vice President Kamala Harris” to “He’s going to withdraw and let there be an open process” to “He’s not getting out no matter what – he’s in this to win.”  No one seems to know exactly what the President is thinking or intends to do.   The Democratic Presidential Convention begins in Chicago on August 19, so pressure literally grows by the day on the President to withdraw as more and more Democrats demand he stand down.

Elsewhere around the world this week, Venezuela holds presidential elections.  Current autocratic President Nicholas Maduro has been badly harassing his political opponents – arresting many of them in the weeks leading up to the election on Saturday.  And widespread fraud and vote rigging by Maduro is expected.  Nevertheless, Maduro is trailing in the polls as the country has seen massive rallies in support of opposition candidate Edmundo Gonzalez Urrutia, who is the proxy candidate for Maria Corina Machado whom Maduro banned from running.

In Beijing this week, Chinese officials are going to try to hammer out a deal between the long-competing Palestinian Hamas and Fatah factions to help broker a deal in Gaza.  While the odds of an actual rapprochement between the two groups is unlikely, it is considered a small step in the right direction and shows China’s determination to increasingly play a global role. 

Meanwhile, in Paris this week the Summer Olympics begin as the French Parliament continues to argue how to form a new working government following elections earlier this week. 

Looking at the global economic radar screen this week, the G20 Finance and Central Bank Governors will gather in Rio de Janeiro, Brazil.  Not much is expected to come from the meetings as there is too much disagreement on issues such as Ukraine, Gaza, the seizing of Russian assets, and other hot-button issues.

Also this week, the People’s Central Bank of China meets on rates as does the Bank of Canada.  The US Federal Reserve goes quiet in advance of the Federal Markets Open Committee meeting the week after next.   Markets are watching the Q1 GDP figures being released on Thursday and the PCE inflation release on Friday, both which will be influential on the Fed’s decision to begin cutting or not.

In Europe, Germany, Italy, and the Eurozone consumer confidence numbers are released.

Below are all the other major political and economic events and reports we are tracking this week:

Sunday, July 21, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Maldives Foreign Minister Moosa Zameer visits Beijing for high-level talks.  China is seeking to broaden their relations with the Maldives in an effort to counter US relations in the region.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Officials from Palestinian Fatah, Hamas factions visit Beijing for talks moderated by the Chinese government.  The two competing factions will seek to bridge the gap between them to help bring peace to the Gaza Strip.

·       Israel will begin drafting ultra-Orthodox Jews for military service.  The highly controversial order comes after the Israeli Supreme Court recently ruled, they could be drafted. Traditionally, ultra-orthodox Jews do not serve, and it is expected many draftees will resist.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Monday, July 22, 2024

Global

·       The UN Security Council, chaired by Russia this week, is scheduled to hold a briefing on Middle East, followed by consultations on the Middle East (Syria).  

Americas

Political/Social Events –

·       Israeli Prime Minister Benjamin Netanyahu may meet with President Biden at the White House if the President tests negative for COVID (which he tested positive for last week).

·       U.S. Secret Service director Kimberly Cheatle appears before the House Oversight Committee on Trump assassination attempt.

Economic Reports/Events –

·       Mexico Economic Activity (May)/ Retail Sales (May)

·       USA Chicago Fed National Activity Index (June)

·       Paraguay Interest Rate Decision

·       Chile Inflation Rate (June)

·       Brazil BCB Focus Market Readout

·       Costa Rica Balance of Trade (June)

Asia

Political/Social Events –

·       Taiwan begins its annual military drills, the first under the new administration of President Lai Ching-te. His defense minister, Wellington Koo, has emphasized making the exercises more practical and less performative, amid growing concern over Chinese pressure and the threat of an invasion. The exercise will run for five days through Friday.

·       Philippine President Ferdinand Marcos, Jr. will give his 3rd State of the Nation Address to the country.  He is expected to heavily focus on growing tensions with China.

Economic Reports/Events –

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

·       China People’s Central Bank decision on Loan Prime Rate 1Y/ 5Y (July)/ FDI (YTD) (June)

·       Indonesia M2 Money Supply (June)/ Foreign Direct Investment (Q2)

·       Taiwan Export Orders (June)

·       Hong Kong Inflation Rate (June)

·       India Union Budget 2024

Europe

Political/Social Events –

·       The EU Foreign Affairs Council meets in Brussels.  Ministers are expected to discuss the war in Ukraine and hear from the Ukrainian Foreign Minister, Dmytro Kuleba via videoconference. They will also discussion the situation in the Middle East, particularly in Gaza.

·       There will be an informal meeting of EU Justice and Home Affairs Ministers in Budapest, Hungary through July 23.

·       The Farnborough International Airshow begins in England and runs through July 26.

Economic Reports/Events –

·       Euro Area ECB Survey of Monetary Analysts

·       Bank of England Executive Director for Markets Victoria Saporta gives a speech at the AFME seminar entitled “The Future Bank of England Balance Sheet – Managing Its Transition Towards a New System for Supplying Reserves” in London.

·       Greece Current Account (May)

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

·       Ireland Wholesale Prices (June)

·       Spain Consumer Confidence (June)

·       Slovenia Unemployment Rate (May)

·       Turkey Central Government Debt (June)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Manufacturing Production (May)/ Inflation Expectations (July)/ Manufacturing PMI (June)

·       Lebanon Inflation Rate (June)

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

·       Qatar Inflation Rate (June)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Tuesday, July 23, 2024

 Global

·       The UN Security Council is scheduled to hold a briefing on Middle East, followed by consultations on the Middle East (Yemen). In the afternoon, the Security Council is scheduled to hold consultations on the United Nations Regional Centre for Preventive Diplomacy for Central Asia (UNRCCA). 

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       USA Redbook (July/20)/ Existing Home Sales (June)/ Richmond Fed Services & Manufacturing Index (July)/ Money Supply (June)/ API Crude Oil Stock Change (July/19)

Asia

Political/Social Events –

·       India’s new government delivers its new annual budget to Parliament.  It is expected there will be significant new welfare programs for the poor and more funding requests for infrastructure.

·        

Economic Reports/Events –

·       South Korea PPI (June)

·       Singapore Inflation Rate (June)

·       Taiwan Industrial Production (June)/ Retail Sales (June)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       European Central Bank Board Member Phillip Lane gives  opening remarks at the joint conference of the European Central Bank, International Monetary Fund, and IMF Economic Review "Global Challenges and Channels for Fiscal and Monetary Policy" in Frankfurt, Germany.

·       Ireland Consumer Confidence (July)

·       Euro Area ECB Lane Speech/ Consumer Confidence Flash (July)

·       Turkey Consumer Confidence (July)/ Overnight Borrowing Rate (July)/ Overnight Lending Rate (July)/ TCMB Interest Rate Decision

·       Poland Unemployment Rate (June)

·       Slovenia Consumer Confidence (July)

·       Hungary Deposit Interest Rate (July)/ Interest Rate Decision

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel M1 Money Supply (June)/ Composite Economic Index (June)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Leading Business Cycle Indicator (May)

·       Nigeria Interest Rate Decision

Wednesday, July 24, 2024

Global

·       The UN  Security Council is scheduled to hold consultations on the 1701 report (the UN Mission to Lebanon).

Americas

Political/Social Events –

Israel PM Benjamin Netanyahu gives joint address to Congress.   A large number of Democratic members of Congress are expected to skip the speech in protest over the situation in Gaza.

Economic Reports/Events –

·       U S Federal Reserve Board Governor Michelle W. Bowman will give pre-recorded video opening remarks at the Advance Together: Celebrating the Achievements of Texas Community Partnerships, Federal Reserve Bank of Dallas, Dallas, Texas

·       USA MBA Mortgage Market Index (July/19)/ Goods Trade Balance Adv (June)/ Retail Inventories Ex Autos Adv (June)/ Wholesale Inventories Adv (June)/ S&P Global Services/ Composite/ Manufacturing PMI Flash (July)/ New Home Sales (June)/ EIA Crude Oil Stocks Change (July/19)/ Building Permits Final (June)

·       Mexico Mid-month Inflation Rate (July)

·       Bank of Canada Interest Rate Decision and Monetary Policy Report and Press Conference

·       Canada New Housing Price Index (June)/ Manufacturing Sales Prel (June)/

·       Chile PPI (June)

·       Paraguay PPI (June)

·       Argentina Retail Sales (May)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Korea Consumer Confidence (July)

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

·       Japan Jibun Bank Services/ Composite/ Manufacturing PMI Flash (July)

·       Singapore URA Property Index Final (Q2)

·       Sri Lanka Interest Rate Decision

·       Malaysia Inflation Rate (June)

·       India HSBC Services/ Composite/ Manufacturing PMI Flash (July)/ M3 Money Supply (July/12)

·       Philippines Budget Balance (June)

·       Taiwan Unemployment Rate (June)/ M2 Money Supply (June)

Europe

Political/Social Events –

·       There will be an informal meeting of EU Health Ministers in Budapest, Hungary through July 25.

Economic Reports/Events -

·       European Central Bank Board Vice President  Luis de Guindos chairs Session 5 at joint conference of the European Central Bank, International Monetary Fund, and IMF Economic Review "Global Challenges and Channels for Fiscal and Monetary Policy" in Frankfurt, Germany.

·       European Central Bank Board Member Philip R. Lane participates in a policy panel "The global 'new normal': fragmentation, tensions, and uncertainty" at joint conference of the European Central Bank, International Monetary Fund, and IMF Economic Review "Global Challenges and Channels for Fiscal and Monetary Policy" in Frankfurt, Germany.

·       European Central Bank Board Member Claudia Buch participates in an  online conversation with Nicolas Véron at Financial statements series organized by the Peterson Institute for International Economics.

·       Germany GfK Consumer Confidence (August)/ HCOB Services/ Composite/ Manufacturing PMI Flash (July)

·       Hungary Gross Wage (May)

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

·       Spain PPI (June)

·       France HCOB Services/ Composite/ Manufacturing PMI Flash (July)

·       Great Britain S&P Global Services/ Composite/ Manufacturing PMI Flash (July)

·       Russia Corporate Profits (May)/ Industrial Production (June)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

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

Africa

Political/Social Events –

·       The United States will host the Africa Trade and Economic Cooperation Forum in Washington, D.C., through July 26.

Economic Reports/Events –

·       South Africa Inflation Rate (June)

·       Zimbabwe Inflation Rate (July)

Thursday, July 25, 2024

Global

·       The G20 Finance Ministers and Central Bank Governors gather in Rio de Janeiro, Brazil to meet through July 26.  Ahead of the meeting, Brazil – which is chairing the G20 this year – announced a short joint statement was hammered out by the attending countries focusing on alignment on inequality, poverty, and climate change.  Beyond that, there is expected to be not much agreement among the attendees.

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

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Brazil FGV Consumer Confidence (July)/ Current Account (June)/ Foreign Direct Investment (July)/ IPCA mid-month CPI (July)/ Federal Tax Revenues (June)

·       Canada Average Weekly Earnings (May)

·       USA Durable Goods Orders (June)/ Initial Jobless Claims (July/20)/ GDP Growth Rate (Q2)/ GDP Price Index (Q2)/ Core PCE Prices (Q2)/ Jobless Claims 4-week Average (July/20)/ Real Consumer Spending (Q2)/ EIA Natural Gas Stocks Change (July/19)/ Kansas Fed Manufacturing & Composite Index (July)/ Fed Balance Sheet (July/24)

·       Argentina Consumer Confidence (July)

·       Colombia Business Confidence (June)

Asia

Political/Social Events –

·       ASEAN Foreign Ministers will meet in Vientiane, Laos.  They are expected to discuss growing tensions with China as well as the situation in Myanmar.

Economic Reports/Events –

·       South Korea Business Confidence (July)/ GDP Growth Rate (Q2)

·       Japan Foreign Bond Investment (July/20)/ Stock Investment by Foreigners (July/20)

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

·       Thailand Imports/ Exports/ Balance of Trade (June)/ New Car Sales (June)

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

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       European Central Bank President Christine Lagarde attends the Paris Summit 2024 Sport for Sustainable Development (S4SD) "Faster, Higher, Stronger – Together For a Better Future" in Paris, France.

·       Great Britain Car Production (June)/ CBI Business Optimism Index (Q3)/ CBI Industrial Trends Orders (July)

·       France Business Confidence (July)/ Business Climate Indicator (July)/ Unemployment Benefit Claims (June)/ Jobseekers Total (June)

·       Turkey Business Confidence (July)/ Capacity Utilization (July)/ Foreign Exchange Reserves (July/19)

·       Euro Area Loans to Companies & Households (June)/ M3 Money Supply (June)

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

·       Slovenia Business Confidence (July)/ Tourist Arrivals (June)

·       Greece Total Credit (June)

·       Ukraine Interest Rate Decision

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 –

·       South Africa PPI (June)

Friday, July 26, 2024

Global

·       The G20 Finance and Central Bank Governors Meeting being held in Rio de Janeiro, Brazil concludes.

·       The 2024 Summer Olympics begin in Paris, France.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Canada CFIB Business Barometer (July)/ Wholesale Sales Prel (June)/ Budget Balance (May)

·       Brazil Bank Lending (June)/ Net Payrolls (June)

·       Mexico Balance of Trade (June)

·       USA Core PCE Price Index (June)/ Personal Income & Spending (June)/ PCE Price Index (June)/ Michigan Consumer Sentiment Final (July)/ Baker Hughes Oil Rig Count (July/26)

·       Venezuela Presidential Elections

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       New Zealand ANZ Roy Morgan Consumer Confidence (July)

·       Japan Tokyo Core CPI (July)/ Tokyo CPI Ex Food and Energy (July)/ Coincident Index Final (May)/ Leading Economic Index Final (May)

·       Singapore Unemployment Rate Prel (Q2)/ Industrial Production (June)

·       Thailand Industrial Production (June)

·       India Bank Loan Growth (July/12)/ Deposit Growth (July/12)/ Foreign Exchange Reserves (July/19)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Hungary Unemployment Rate (June)

·       France Consumer Confidence (July)

·       Spain Unemployment Rate (Q2)/ Retail Sales (June)

·       Euro Area Consumer Inflation Expectations (June)

·       Italy Business Confidence (July)/ Consumer Confidence (July)

·       Russia Interest Rate Decision/ CBR Press Conference

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Kuwait Private Bank Lending (June)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Saturday, July 27, 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 Industrial Profits (YTD) (June)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, July 28, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Venezuela holds presidential elections.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Iranian President-elect Masoud Pezashkian will be sworn into office.

Economic Reports/Events –

·       Saudi Arabia M3 Money Supply (June)/ Private Bank Lending (June)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

The Global Week Ahead

July 14 - 21, 2024

It will be an extraordinary week ahead.  As the US and the rest of the world struggle to understand the attempted assassination attempt on former President Trump, the Republican Presidential Convention begins Monday, and we will learn in the next day or two who will be Trump's Vice-Presidential running mate.  Meanwhile, we expect that US Democratic leaders will continue to discuss and pressure President Biden to withdraw from running for President – something the President has made clear he has no intention of doing.  Polling data will be poured over perhaps more intensely than ever before, mainly to see the downstream implications for House, Senate, and gubernatorial races.   We will be writing separately about all of this over the week as the event develops.

Meanwhile, in Beijing, the Chinese Communist Party convenes for their long-awaited Third Plenum meetings.  Markets will mainly focus on what is said and decide how to further stabilize the Chinese economy in the wake of the ongoing real estate crisis and economic challenges.   Also, in Asia this week, the 10th Pacific Islands Leaders Meeting will be held in Tokyo, Japan.  Leaders will participate in the three-day summit-level meeting to discuss climate change and fisheries, but China's growing military presence in the region and impact on security and trade will be addressed.

In Europe, the new EU Parliament gets underway, formally organizes itself, and officially names Ursula von der Leyden as President for a second term.  In London, King Charles gives the King's Speech to Parliament, laying out the legislative agenda of newly elected Prime Minister Kier Starmer and the Labor Party majority.  And in Paris, the French National Assembly meets for the first time since the elections to attempt to hammer out some sort of coalition arrangement and pick a new prime minister.  It is likely to be a prolonged and messy effort.

Looking at the global radar screen this week, markets are watching the European Central Bank meeting to see if the central bank moves to lower rates again—which most economists are not expecting.  Also, in Europe, the UK releases inflation figures, Germany publishes PPI figures, and as mentioned above, King Charles' speech will lay out the UK's economic agenda going forward.

Looking to Asia, China releases its Second-Quarter GDP, and Japan publishes its CPI print.   In the US, Fed Chair Jay Powell participates in a fireside chat with Carlyle Group Founder and Chair David Rubinstein (a terrific interviewer!) to discuss the economy and likely shed more light on when the Fed will begin to move on cutting rates.

Below is our comprehensive weekly laying out all the other key geopolitical and geoeconomic events we are watching in the coming week:

Sunday, July 14, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       China and Russia hold joint naval exercises code-named “Exercise Joint Sea-2024” at the military port of Zhanjiang in South China’s Guangdong Province.

Economic Reports/Events –

·       China Communist Party of China Third Plenum/ PBoC 1-Year MLF Announcement

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Euro Area Eurogroup Meeting

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Imports/ Exports/ Balance of Trade (June)/ M1 Money Supply (June)

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Monday, July 15, 2024

Global

·       The Olympic flame arrives in Paris in advance of the Summer Olympics.

Americas

Political/Social Events –

·       The U.S. Republican Party National Convention begins in Milwaukee, Wisconsin through July 18.

Economic Reports/Events –

·       Federal Reserve Board Jay Powell participates in a conversation with David M. Rubenstein, Chairman of the Economic Club of Washington, D.C.

·       San Francisco Federal Reserve Bank President Mary Daly to participate in session, “The Bull, the Bear, and the Banker" before the Fortune Brainstorm Tech 2024.

·       Brazil IBC-BR Economic Activity (May)/ BCB Focus Market Readout

·       Canada Manufacturing Sales Final (May)/ Wholesale Sales Final (May)/ BoC Business Outlook Survey

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

·       Colombia Consumer Confidence (June)/ Industrial Production (May)/ Retail Sales (May)

·       Peru GDP Growth Rate (May)/ Unemployment Rate (June)

Asia

Political/Social Events –

·       The Chinese Communist Party Central Committee gathers to hold the Third Plenum meeting.  The four-day event will offer a window on how Beijing plans to address the country's persistent property crisis, weak consumer demand and fading growth prospects. This particular meeting has a history of launching major economic initiatives -- including Deng Xiaoping's "reform and opening up" in 1978 -- but many analysts are tempering expectations.  The meeting is expected to outline key policy initiatives to revitalize both consumer and business confidence and address the continued large drag from the property sector. 

Economic Reports/Events –

·       New Zealand Composite & Services NZ PCI (June)

·       China House Price Index (June)/ GDP Growth Rate Q2/ Industrial Production (June)/ Retail Sales (June)/ Fixed Asset Investment (YTD) (June)/ Unemployment Rate (June)/ Industrial Capacity Utilization Q2/ NBS Press Conference/ Communist Party of China Third Plenum

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

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

·       Kazakhstan Business Confidence Q2

·       Sri Lanka Manufacturing & Services PMI (June)

Europe

Political/Social Events –

·       The Eurogroup meets in Brussels. Ministers will discuss the economic and budgetary situation in the euro area and the fiscal policy stance for 2025.  The chairman of the European Fiscal Board (EFB) Niels Thygesen is expected to present the recent EFB report on the fiscal stance of the euro area. The Eurogroup is also expected to adopt a statement on the fiscal stance for the euro area for 2025 ahead of the preparation of national budgets for next year.

·       The 15th Meeting of the EU-Jordan Association Council takes place in Brussels.  The session will be devoted to discussing bilateral relations, focusing on the implementation of the Association Agreement and the EU-Jordan new Partnership Priorities (2021-2027), which the Association Council adopted in 2022. During an informal lunch discussion, the Association Council will discuss political matters and notably regional and international issues.

·       The EU Agriculture and Fisheries Council meets in Brussels. The ministers will hold a targeted discussion on ways to improve the long-term viability of rural areas, with a focus on generational renewal and demographic aspects. Among the 'other business' items on the agenda, the Hungarian presidency will publicly provide the Council with information on the outcome of the BIOEAST policy forum on advancing research and innovation in Central and Eastern Europe held in Brussels on 4 July 2024.

·       There will be an informal meeting of EU Energy Ministers through July 16 in Brussels. The meeting will concentrate on the decarbonization of the energy system. Related to this, the discussions will focus on issues such as the role of geothermal energy, the implementation of the 2030 energy policy framework and the role of the national energy and climate plans, a resilient, flexible, and integrated electricity system, and the contribution of the energy sector to the new competitiveness deal.

Economic Reports/Events –

·       Germany Retail Sales (May)

·       Hungary Construction Output (May)

·       Switzerland Producer & Import Prices (June)

·       Slovakia Inflation Rate (June)

·       Romania Current Account (May)

·       Poland Inflation Rate Final (June)/ Balance of Trade (May)/ Current Account (May)

·       Euro Area Industrial Production (May)/ Ecofin Meeting

·       Ireland Balance of Trade (May)

·       Russia Building Permits (May)

·       Turkey Auto Production & Sales (June)

Middle East

Political/Social Events –

·       Syria holds parliamentary elections.

Economic Reports/Events –

·       Israel Unemployment Rate (June)/ Inflation Rate (June)

·       Jordan Inflation Rate (June)

·       Qatar Inflation Rate (June)

Africa

Political/Social Events –

·       Rwanda holds presidential and parliamentary elections. Incumbent President Paul Kagame will likely secure a fourth term, with the ruling Rwandan Patriotic Front (RPF) likely to retain its majority in parliament.

Economic Reports/Events –

·       Nigeria Food Inflation (June)/ Inflation Rate (June)

Tuesday, July 16, 2024

Global

·       G7 Trade Ministers meet in Reggio Calabria, Italy, through Wednesday.  The main themes will be responding to the tensions and frictions which interfere with global trade and potential economic growth, and to streamline international trade through reform of the World Trade Organization. The session with non-member countries and business leaders will also be held to pay attention to the crisis in the Red Sea, which affects international trading routes and supply chains around the world, including the Indo-Pacific region.

· The UN Security Council, chaired by Russian Foreign Minister Sergey Lavrov, is scheduled to hold an open debate on the Maintenance of international peace and security: Multilateral cooperation in the interest of a more just, democratic, and sustainable world order. 

·       The IMF releases an updated World Economic Outlook with updated growth forecasts.

Americas

Political/Social Events –

·       The four-day Aspen Security Forum begins in Colorado.

·       Today is Amazon Prime Day, one of the largest online shopping events in the world. 

Economic Reports/Events –

·       Federal Reserve Board Governor Adriana Kugler gives as speech entitled “Challenges Facing Economic Measurement and Creative Solutions” at the Economic Measurement Seminar hosted by the National Association for Business Economics in Washington, D.C.

·       Canada Housing Starts (June)/ Inflation Rate (June)/ CPI Median (June)/ CPI Trimmed-Mean (June)

·       USA Retail Sales (June) / Export Prices (June) / Import Prices (June)/ Redbook (July/13)/ Business Inventories (May)/ NAHB Housing Market Index (July)/API Crude Oil Stock Change (July/12)

·       Uruguay Interest Rate Decision

Asia

Political/Social Events –

·       The 10th Pacific Islands Leaders Meeting gets underway in Tokyo, Japan.  Leaders will participate in the three-day summit-level meeting to discuss climate change and fisheries.  Additionally, leaders will discuss the release of treated wastewater from Japan's Fukushima Daiichi nuclear plant.

·       Pakistan will observe a two-day public holiday for Ashura through July 17.

Economic Reports/Events –

·       South Korea Export Prices (June)/ Import Prices (June)

·       Japan Tertiary Industry Index (May)

·       New Zealand Global Dairy Trade Price Index (July/16)

·       China Communist Party of China Third Plenum

Europe

Political/Social Events –

·       The first session of the new EU Parliament will begin. The constitution of the Parliament will be ratified, and a new President will be elected. Parliament’s first act after its constitution is to elect its President for the next two-and-a-half years (half the legislature). Eight members of parliament will be selected as tellers to oversee the election, held by secret paper ballot. To be elected, a candidate must win an absolute majority of the valid votes cast, i.e. 50% plus one. After the election of the President, MEPs will elect the rest of the members of Parliament’s Bureau: 14 Vice-Presidents and five Quaestors.

Economic Reports/Events –

·       Euro Area ECB Bank Lending Survey/ Balance of Trade (May)/ ZEW Economic Sentiment Index (July)

·       Italy Inflation Rate (June)/ Balance of Trade (May)

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

·       Poland Core Inflation Rate (June)

·       Turkey Budget Balance (June)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

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

·       Israel GDP Growth Annualized 3rd Est Q1

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Wednesday, July 17, 2024

Global

·       The UN Security Council is scheduled to hold an open debate on the Middle East. 

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Federal Reserve Board Governor Christopher J. Waller gives a speech entitled “Economic Outlook” at a Federal Reserve Bank of Kansas City Event with Governor Waller, Kansas City, Missouri.

·       Richmond Federal Reserve Bank President Thomas Barkin to give informal remarks on the economy before the Greater Prince George's Business Roundtable.

·       USA MBA Mortgage Market Index (July/12)/ MBA Purchase Index (July/12)/ Building Permits Prel (June / Capacity Utilization (June)/ Industrial Production (June)/ Manufacturing Production (June)/ EIA Crude Oil Stocks Change (July/12)/ Fed Beige Book/ Housing Starts (June)

·       Canada Foreign Securities Purchases (May)/ New Motor Vehicle Sales (May)

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       The Asia Development Bank releases its economic outlook report.

·       Japan Reuters Tankan Index (July)

·       Singapore Non-Oil Exports (June)/ Balance of Trade (June)

·       Australia Westpac Leading Index (June)/ RBA Simon Speech

·       Philippines Cash Remittances (May)

·       Indonesia Loan Growth (June)/ Interest Rate Decision/ Lending & Deposit Facility Rate (July)

·       Kazakhstan Industrial Production (June)

·       China Communist Party of China Third Plenum

Europe

Political/Social Events –

·       Workers at Charles de Gaulle and Orly airports strike over Olympic bonuses, staffing.  The strike is expected to snarl the travel plans of an expected 350,000 travelers coming to Paris for the Olympics.

·       King Charles gives the King’s Speech at the Opening of the new parliament, laying out the new legislative agenda of new Prime Minister Keir Starmer’s Labor Party majority.  

Economic Reports/Events –

·       Great Britain Core Inflation Rate (June)/ PPI Output (June)/ PPI Input (June)/ Retail Price Index (June)

·       Slovakia Harmonized Inflation Rate (June)

·       Euro Area Inflation Rate Final (June)/ CPI Final (June)

·       Ireland Residential Property Prices (May)

·       Russia PPI (June)

·       Belarus GDP (June)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

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

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       South Africa Retail Sales (May)

Thursday, July 18, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Federal Reserve Board Governor Michelle W. Bowman gives a speech entitled “Accountability and Reform” at the Exploring Conventional Bank Funding Regimes in an Unconventional World hosted by the Dallas Reserve Bank in Dallas, Texas.

·       Dallas Federal Reserve Bank President Lorie Logan to give opening remarks before the "Exploring Conventional Bank Funding Regimes in an Unconventional World" conference co-sponsored by the Federal Reserve Bank of Dallas and Federal Reserve Bank of Atlanta.

·       San Francisco Federal Reserve Bank President Mary Daly to participate in fireside chat before the "Exploring Conventional Bank Funding Regimes in an Unconventional World" conference co-sponsored by the Federal Reserve Bank of Dallas and Federal Reserve Bank of Atlanta.

·       USA Initial Jobless Claims (July/13)/ Philadelphia Fed Manufacturing Index (July)/ Philly Fed Business Conditions (July)/ CB Leading Index (June)/ EIA Natural Gas Stocks Change (July/12)/ Fed Logan Speech/ Net Long-term TIC Flows (May)/ Foreign Bond Investment (May)/ Overall Net Capital Flows (May)/ Fed Balance Sheet (July/17)

·       Colombia ISE Economic Activity (May)

·       Argentina Balance of Trade (June)/ Economic Activity (May)

Asia

Political/Social Events –

·       The Indonesia International Auto Show begins in Jakarta. 

Economic Reports/Events –

·       Japan Imports/ Exports/ Balance of Trade (June)/ Foreign Bond Investment (July/13)

·       Australia Employment Change (June)/ Unemployment Rate (June)/ RBA Bulletin/ Participation Rate (June)

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

·       Hong Kong Unemployment Rate (June)

·       Sri Lanka PPI (May)

Europe

Political/Social Events –

·       The new French National Assembly meets for the first time following the recent elections. They will seek to find some sort of agreement on a new prime minister.

·       EU parliament votes on new European Commission mandate for Ursula von der Leyen, securing her second term.

·       There will be a meeting of the European Political Community at Blenheim Palace, England.  Prime Minister Keir Starmer hosts the event where more than 50 European leaders plus the Presidents of the European Council, European Commission, and European Parliament will attend.

Economic Reports/Events –

·       The European Central Bank Governing Council holds a monetary policy meeting in Frankfurt, Germany.  ECB President Christine Lagarde holds a press conference following the meeting.

·       Bank of England Executive Director for Financial Stability Strategy and Risk Nathanaël Benjamin gives a speech entitled “Preparing for liquidity stresses” at an ISDA event hosted by the law firm Linklaters in London.

·       Euro Area New Car Registrations (June)/ Construction Output (May)/ Deposit Facility Rate/ Marginal Lending Rate

·       Switzerland Balance of Trade (June)

·       Great Britain Unemployment Rate (May)/ Claimant Count Change (June)/ HMRC Payrolls Change (June)

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

·       Turkey Foreign Exchange Reserves (July/12)

·       Belarus Industrial Production (June)

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Egypt Interest Rate Decision/ Overnight Lending Rate

·       Kuwait Inflation Rate (June)

·       Israel Inflation Expectations (July)

Africa

Political/Social Events –

·       South Africa’s Parliament begins its first session under its unprecedented coalition.

Economic Reports/Events –

·       South Africa Building Permits (May)/ Interest Rate Decision/ Prime Overdraft Rate

·       Angola Interest Rate Decision/ Foreign Exchange Reserves (June)/ M3 Money Supply (June)

Friday, July 19, 2024

Global

·       The UN Security Council is scheduled to hold a debate on Cooperation between the UN and regional and subregional organizations in maintaining international peace and security: the Collective Security Treaty Organization (CSTO), the Commonwealth of Independent States (CIS), the Shanghai Cooperation Organization (SCO).

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       The Federal Reserve Board, the US Treasury, and the Office of the Comptroller of the Currency hold a joint-virtual public meeting on the proposed acquisition by Capital One of Discover.

·       New York Federal Reserve Bank President John Williams to participate in "A New Era for Monetary Policy" panel before the BCRP-RBWC-IDB 15th Annual Conference: “The Rewiring of the Global Economy" organized by the Central Reserve Bank of Peru (BCRP), Reinventing Bretton Woods Committee (RBWC), and Inter-American Development Bank (IDB).

·       Atlanta Federal Reserve Bank President Raphael Bostic to give closing remarks before the Federal Reserve Bank of Dallas/Federal Reserve Bank of Atlanta "Exploring Conventional Bank Funding Regimes in an Unconventional World" conference.

·       Baker Hughes Oil Rig Count (July/19)

·       Colombia Imports (May)/ Balance of Trade (May)

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

·       El Salvador Balance of Trade (June)

·       Argentina Leading Indicator (June)

Asia

Political/Social Events –

·       Japan will host a joint military exercise with France, Germany, and Spain through July 25.  This is the first time Japan has hosted the joint exercises with Spain and is part of the broader “Pacific Skies 2024” exercises.

Economic Reports/Events –

·       New Zealand Inflation Rate Q2

·       Japan Inflation Rate (June)

·       Malaysia GDP Growth Rate Prel Q2

·       Hong Kong Business Confidence Q3

·       Indonesia Foreign Exchange Reserves (July/12)

·       China FDI (YTD) (June)

·       Kazakhstan GDP (June)

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Great Britain Gfk Consumer Confidence (July)/ Retail Sales (June)/ Public Sector Net Borrowing (June)

·       Germany PPI (June)

·       Euro Area Current Account (May)

·       Italy Construction Output (May)/ Current Account (May)

·       Spain Balance of Trade (May)/ Consumer Confidence (June)

·       Slovenia PPI (June)

·       Russia Current Account (May)

·       Slovakia Current Account (May)/ Unemployment Rate (June)

·       Turkey Central Government Debt (June)

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 –

·       Ghana PPI (June)

Saturday, July 20, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Colombian President Gustavo Petro is holding a rally of farmers to help him strengthen efforts for agrarian reform in the country.  It is also Colombia’s Independence Day.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, July 21, 2024 

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       ASEAN Foreign Ministers will meet in Vientiane, Laos through July 27.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Today is National Day in Belgium.

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.

Recommended Weekend Reads

July 12 - 14, 2024

Our apologies for the late delivery. We were traveling and had technical issues getting the Recommended Reads published. Here are our recommended reads from reports and articles we read last week. We hope you find these useful and that you have a relaxing weekend. And let us know if you or someone you know wants to be added to our distribution list.

China

• Ahead of the Third Plenum, Diverging Visions for China’s Private Sector  Christina Sadeler/Merics

  At the Third Plenum, a major policy meeting taking place this coming week, the Chinese Communist Party (CCP) will set China’s economic program for the next five years. The struggling private economy is an issue of concern, given its relevance for economic growth, tax revenues, and job creation.  Despite a series of policies and measures to support the private sector, steps taken so far have not been effective in rebuilding confidence.  Economic experts have diverging views on what the best measures for sustained growth are: One side points to stronger state guidance and collaboration between private and state-owned enterprises. The other calls for structural reforms for fair competition and a more predictable political and legal framework to revitalize entrepreneurial spirit.  Observers of the Plenum should pay close attention to what steps the party-state will take to rekindle trust in the private sector. The path ahead is crucial for China’s businesses and foreign companies doing business in and with China. 

• How Many People Are in China’s People's Liberation Army?    War on the Rocks

  The People’s Liberation Army is often described as “the largest military in the world.” But depending on who you ask and what you count, the details are murky and confusing. The deeper one dives into the numbers, the more complicated the picture gets, and the greater the differences between the Chinese and U.S. systems become. Though many recent reforms have surface aspects that appear to reflect U.S. structures, the new-look People’s Liberation Army does not mirror-image its American (or Russian) counterpart. Nor have its new organizations been tempered by combat.

• China’s Self-Imposed Isolation   Michael Shuman/The Atlantic

  In late June, a Chinese man stabbed a woman from Japan and her child at a bus stop for a Japanese school in the eastern city of Suzhou. Two weeks earlier, four foreign teachers from a U.S. college were attacked by a knife-wielding local as they strolled through a park in the northeastern town of Jilin. In a country where violence against foreigners has been practically unheard of in recent years, the assaults have led to some uncomfortable soul-searching among a shocked Chinese public. Are hard economic times fueling a dangerous spike in nationalism? some ask in online debates. Has the Chinese school system, with its focus on patriotism, fed people bad ideas? they wonder. Occasionally, a bold voice risks angering China’s censors by posing an even more sensitive possibility: Could the government be to blame?  That’s a salient question. Some dissonance has emerged in China’s mixed messaging and contradictory aims.

Post-Election France

• The French Left’s Pyrrhic Victory   Spiked

  There is something more than a little Pyrrhic about this semi-victory in France over the populist right. For a start, the far-right National Rally (RN) has still massively increased the number of seats it holds – by over 50 percent. It is easily the largest single political party in the French assembly. By contrast, Jean-Luc Mélenchon’s France Unbowed (LFI), the biggest party within the New Popular Front (NFP), has just 78 seats. Given the fragile nature of the coalitions now within the assembly, whatever government emerges after this weekend – Macron’s prime minister, Gabriel Attal, has already offered to step down – will struggle for coherence. Furthermore, while the RN may have lost the election, its raw vote share will give it plenty of encouragement ahead of the presidential elections in 2027. According to the latest figures, the RN received 37 percent (10 million) of all votes cast. That far outstrips the NFP’s 26 percent (seven million) and Ensemble’s 25 percent (6.5 million).
  

• How Le Pen’s Far Right Blew It  Politico EU

  Bad candidates, incompetence, and a fierce fightback by rivals denied the National R (RN) ally its election dream. The RN won’t come to power, its leader, Jordan Bardella, won’t be prime minister, and the party might not even end up as the main opposition in parliament. To cap it all, on Tuesday, Party chair Marine Le Pen was hit by a corruption investigation over allegations relating to her presidential campaign two years ago.

• How Macron Broke the French Political System  Philippe LeMoine/”Restoration” Substack

  French President Emmanuel Macron probably thought that, by calling snap parliamentary elections after his party was soundly defeated at the European elections and giving the parties only three weeks to prepare, the left would not have time to put together an electoral alliance and force them to present multiple candidates in most districts, so that left-wing candidates would only have been able to qualify for the second round in a handful of them. But, ironically, this strategy produced exactly the opposite result, precisely because left-wing leaders knew that they had no time. Unless they managed to make a deal they would be wiped out, so they decided to effectively tie their own hands by publicly announcing the day after Macron called elections that they had made a deal, even though at that point they had not agreed on anything. Paradoxically, if Macron had given them more time, they would have tried to work out the details first and there is a good chance they would have failed to strike a deal.

Africa

• Why Europe Needs Africa  Carnegie Endowment for International Peace

  In 2017, Africa’s population under twenty-five years old surpassed the total population of Europe. By 2050, Africa will have added 796 million people to the workforce, while Europe’s working-age population (aged sixteen to sixty-four) will decline by 156 million.  Europe is aging while Africa’s youth population booms.  This demographic transformation is perhaps the defining shift that could recast the fortunes of the two continents, which are separated, at the closest point between Morocco and Spain, by just 14 kilometers (less than 9 miles).  Labor shortages and pension costs are already impacting the credit ratings of European countries,3 while the massive demand for employment in the African continent will have significant implications—positive and negative—in terms of migration, stability, future market potential, and economic dynamism.

Geoeconomics

• Industrial Policy in the Global Semiconductor Sector  Pinelopi Goldberg/Reka Juhasz/Nathan Lane/Giulia Lo Forto/Jeff Thurk, National Bureau of Economic Research

  Abstract: The resurgence of subsidies and industrial policies has raised concerns about their potential inefficiency and alignment with multilateral principles. Critics warn that such policies may divert resources to less efficient firms and provoke retaliatory measures from other countries, leading to a wasteful "subsidy race." However, subsidies for sectors with inherent cross-border externalities can have positive global effects. This paper examines these issues within the semiconductor industry: a key driver of economic growth and innovation with potentially significant learning-by-doing and strategic importance due to its dual-use applications.  Our study aims to (1) document and quantify recent industrial policies in the global semiconductor sector, (2) explore the rationale behind these policies, and (3) evaluate their economic impacts, particularly their cross-border effects and compatibility with multilateral principles. We employ historical analysis, natural language processing, and a model-based approach to measure government support and its impacts. Our findings indicate that government support has been vital for the industry's growth, with subsidies being the primary form of support. They also highlight the importance of cross-border technology transfers through FDI, business and research collaborations, and technology licensing. China, despite significant subsidies, does not stand out as an outlier compared to other countries, given its market size. Preliminary model estimates indicate that while learning-by-doing exists, it is smaller than commonly believed, with significant international spillovers. These spillovers likely reflect cross-country technology transfers and the role of fabless clients in disseminating knowledge globally through their interactions with foundries. Such cross-border spillovers are not merely accidental but result from deliberate actions by market participants that cannot be taken for granted. Firms may choose to share knowledge across borders or restrict access to frontier technology, thereby excluding certain countries. Future research will use model estimates to simulate the quantitative implications of subsidies and to explore the dynamics of a ``subsidy race'' in the semiconductor industry.
  

• Does geopolitics now determine global trade?   Stewart Paterson,  Hinrich Foundation

  The increasingly popular thesis that the world is fragmenting into geopolitically defined blocs potentially ignores the very real aspirations of regional powers and the fact that not all neighborhoods are composed of like-minded or politically aligned countries. While US-China rivalry has resulted in a rapid decoupling of their economic engagement, it is far from clear that geopolitics is the key determinant of trade patterns beyond that.

• Partisan Politics and Annual Shareholder Meeting Formats  Yuanzhi Li & David Yermack, National Bureau of Economic Research

  Abstract: We study companies’ decisions about holding annual shareholder meetings online during the Covid pandemic and returning to classical in-person meetings post-pandemic. Among S&P 1500 companies, the frequency of virtual meetings shot up from less than 10 percent to more than 80 percent in the first year of the pandemic, with only gradual reversion to in-person meetings since then. Partisan politics has significant associations with these decisions. In-person meetings are more likely for companies that have Republican CEOs, and for companies with headquarters located in jurisdictions that vote Republican. Corporate democracy therefore seems to have been swept up by the tides of contemporary political feuds.

The Global Week Ahead

• July 7 - 14, 2024

Four major geopolitical events  unfold this coming week, which we believe will be of significant focus and interest to global markets. 

First, the 75th NATO Summit in Washington, D.C., takes place this week.  The ongoing debate over President Biden's re-election bid adds a layer of complexity to the summit, where the leaders of the NATO member states will convene to deliberate on crucial issues, particularly the strategy for supporting Ukraine in the future.  The potential inclusion of Ukraine in NATO will be a pivotal point of discussion, underscoring the summit's significance.  

In addition, several Indo-Pacific leaders will be joining the meeting as NATO is expected to outline new plans on how to work more closely with Australia, Japan, and South Korea – something which is not playing well with China, Russia, or North Korea.

The second significant event his week is Indian Prime Minister Narendra Modi traveling to Moscow to participate in a summit with Russian President Vladimir Putin.   This is Modi's first bilateral visit since being re-elected to a third term as India's Prime Minister.  Traditionally, Indian Prime Ministers make their first visits to one of India's neighbors.  However, Modi, who recently skipped the 2024 Shanghai Cooperation Organization meeting Kazakhstan and India-China relations remain tense, is looking to balance China's growing relationship with Russia.  The two leaders are expected to discuss expanding economic ties and purchasing Russian military hardware.

The third major event this week is the second round of French parliamentary elections.  Following last week's near outright majority results for the far-right National Rally Party headed by Marine Le Pen, French far-left parties have been working with French President Emmanual Macron's centrist alliance to find a way to ensure Le Pen does not get that outright majority via the second round of voting – and, according to pollsters, it looks like they may have succeeded.

The fourth major event is what President Biden will do as a growing chorus of Democratic members of Congress and other Democratic leaders call for him to stand down from his re-election bid against former President Biden.  As of this writing, Biden is insistent he will not withdraw because of physical and cognitive issues.  However, the pressure seems to be mounting by the hour and the day, and most Washington observers believe it is highly likely he will have to withdraw, perhaps immediately after the NATO Summit.

Looking to the global economic radar screen this week, markets will be watching closely as Federal Reserve Board Chair Jay Powell testifies twice before Congress – before the Senate Banking Committee and before the House Financial Services Committee – giving the semi-annual Monetary Policy Report.  Also this week, U.S. Treasury Secretary Janet Yellen testifies on the state of the international financial system. 

In terms of economic reports, the US CPI report will be of major focus this Thursday, and the PPI is out Friday.  Additionally, the University of Michigan consumer survey is out Friday.

Looking at Asia, China releases its monthly inflation print on Wednesday, while Japanese wage figures, PPI figures, and the trade balance will be of particular focus to markets. 

Moving to Europe, the U.K. monthly GDP report will be watched closely as the new Labour Majority takes power in Parliament.

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

Sunday, July 7, 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 –

·       UN Secretary-General Antonio Guterres visits Tajikistan.

·       Vanuatu Prime Minister Prime Minister Charlot Salwai travels to Beijing for meetings through July 12.

·       Belarus Foreign Minister Maksim Ryzhenkov travels to Beijing for meetings with Chinese Foreign Minister Wang Yi.

·       Tokyo holds gubernatorial elections.

·       Today is Independence Day in the Solomon Islands. The country gained its independence from the UK in 1978.

Economic Reports/Events –

·       China Foreign Exchange Reserves (June)

Europe

Political/Social Events –

·       France holds the second round of parliamentary elections.

·       In Pamplona, Spain the annual Running of the Bulls takes place.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Israel Foreign Exchange Reserves (June)

Africa

Political/Social Events –

·       The Economic Community of West African States (ECOWAS) Leaders’ Summit begins in Abuja, Nigeria.  In advance of the meetings, the military regimes of Niger, Mali, and Burkino Faso have announced they are quitting the organization “permanently.”

·       Today is Saba Saba Day in Tanzania, celebrating the unification of the country and its independence.

Economic Reports/Events –

·       Nothing significant to report.

Monday, July 8, 2024

Global

·       The UN Security Council is scheduled to hold a briefing on the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO), followed by consultations.

·       The UN’s International Maritime Organization meets in London through July 12.

Americas

Political/Social Events –

·       The 64th Mercosur and Associated States Summit begins in Asunción, Paraguay.  Leaders from the five full member countries (Argentina, Brazil, Paraguay, and Uruguay) along with the associated member countries (Bolivia, Chile, Colombia, Ecuador, Guyana, Peru).  Argentine President Javier Milei is going to skip the meeting to avoid having to meet with Brazilian President Luiz Inacio Lula da Silva (Lula), whom he has called “an angry communist” and “corrupt.”  Milei is sending his foreign minister, Diana Mondino, instead.  But in an act further enraging Lula, Milei is scheduled to travel to Brazil to meet with Lula’s political opponent, Jair Bolsonaro.

Economic Reports/Events –

·       Chile Inflation Rate YoY JUN/ Imports/ Exports/ Balance of Trade JUN

·       USA Consumer Inflation Expectations JUN/ Consumer Credit Change MAY/ Used Car Prices YoY JUN

·       Colombia Inflation Rate YoY JUN

·       Brazil BCB Focus Market Readout

Asia

Political/Social Events –

· Japan and the Philippines are scheduled to hold high-level talks between their respective foreign ministers and defense ministers in Manila.  It is expected a deal will be reached allowing each nation’s defense forces to visit each other’s territory  - via a Reciprocal Access Agreement – and conduct coordinated drills, further deepening defense cooperation.

·       Chinese Premier Li Qiang will host Bangladeshi Prime Minister Sheikh Hasina in China through July 10.

Economic Reports/Events –

·       Japan Average Cash Earnings YoY MAY/ Overtime Pay YoY MAY/ Current Account MAY/ Bank Lending YoY JUN

·       Australia Home Loans MoM MAY/ Investment Lending for Homes MAY

·       Thailand Foreign Exchange Reserves JUN

·       Singapore Foreign Exchange Reserves JUN

·       Philippines Foreign Exchange Reserves JUN

Europe

Political/Social Events –

·       Indian Prime Minister Narendra Modi travels to Russia for a summit with Russian President Vladimir Putin.  This is traditionally an annual summit but since the War on Ukraine was launched by Putin, there has been questions about the future of Russia-Indian relations.

·       There will be an informal meeting of EU Competitiveness Ministers (Internal market and industry) in Budapest, Hungary through July 9.

Economic Reports/Events –

·       Bank of England Member of the Monetary Policy Committee Jonathan Haskel gives a speech at Kings College.

·       Bank of England Executive Director for Data Analytics Transformation/Chief Data Officer James Benford gives a speech at the FCA Data Innovation for Future of Regulation (DiFoR) Conference in London.

·       Ireland Construction PMI JUN

·       Germany Imports/ Exports/ Balance of Trade MAY

·       Romania GDP Growth Rate Final Q1

·       France Current Account MAY/ Foreign Exchange Reserves JUN

·       Greece Balance of Trade MAY

·       Turkey Auto Production YoY JUN/ Auto Sales YoY JUN

·       Hungary Budget Balance JUN

Middle East

Political/Social Events –

CIA Director Bill Burns is expected to travel to Qatar to join negotiations over the Gaza hostage situation and a possible breakthrough on a ceasefire.

Economic Reports/Events –

·       Israel Business Confidence JUN/ Interest Rate Decision

·       Kuwait M2 Money Supply YoY MAY/ Private Bank Lending YoY MAY

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Egypt Foreign Exchange Reserves JUN

Tuesday, July 9, 2024

Global

·       The G7 Science and Technology Ministers will meet in Bolognia and Forlí, Italy, through July 11.

Americas

Political/Social Events –

·       U.S. President Joe Biden will meet with Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol on the sidelines of the NATO summit in Washington.

·       Today, Argentina celebrates Independence Day, celebrating the day in 1816 when the country declared its independence from Spain.

Economic Reports/Events –

·       Federal Reserve Board Chair Jay Powell will deliver the Semimanual Monetary Policy Report to Congress before the Senate Banking Committee.

·       Federal Reserve Board Vice Chair for Supervision Michael Barr gives a speech entitled “Financial Inclusion: Past, Present, and Hopes for the Future” at the Financial Inclusion Practices and Innovation Conference in Washington,

·       Treasury Secretary Janet Yellen will present the annual testimony to Congress on the state of the international financial system before the House Financial Services Committee.

·       Federal Reserve Board Governor Michelle Bowman gives a speech entitled “Promoting an Inclusive Financial System” at the Financial Inclusion Practices and Innovation Conference in Washington, D.C.

·       USA NFIB Business Optimism Index JUN/ Redbook YoY JUL/ Fed Barr Speech/ Fed Chair Powell Testimony/ Fed Bowman Speech/ API Crude Oil Stock Change JUL/ Treasury Secretary Yellen Testimony

·       Mexico Consumer Confidence JUN/ Inflation Rate YoY JUN/ Auto Exports YoY JUN/ Auto Production YoY JUN/ Core Inflation Rate YoY JUN

Asia

Political/Social Events –

·       Thai Minister of Foreign Affairs Maris Sangiampongsa will visit China through July 10.

·       Solomon Islands Prime Minister Jeremiah Manele makes an official visit to China through July 15.  China has been eager to establish stronger economic and military ties with the island nation in the hoping of using its port to support Chinese naval operations.

·       Today is Palau Constitution Day, celebrating the day when the country passed a new constitution modeled on the US Constitution.

Economic Reports/Events –

·       Australia Westpac Consumer Confidence Change JUL

·       Philippines Unemployment Rate MAY/ Industrial Production YoY MAY

·       Taiwan Imports/ Exports/ Balance of Trade JUN

·       China Vehicle Sales YoY JUN

·       Indonesia Motorbike Sales YoY JUN

Europe

Political/Social Events –

·       The 75th Anniversary NATO Summit begins in Washington, D.C., and runs through July 11.  The main topics for discussion will be Ukraine’s prospects for joining NATO, how to continue supporting Ukraine’s war efforts, and how to deal with Russia.  In addition, NATO is planning to release its first joint document on expanding cooperation with Australia, Japan, New Zealand and South Korea.

·       The new UK Parliament meets for the first time since last week’s elections.

Economic Reports/Events –

·       European Central Bank Board Member Piero Cipollone will give a video message at a digital euro event organized by the Central Bank of Cyprus.

· Bank of England Executive Director for Payments Victoria Cleland gives a speech on the Financial Stability Board, Regulatory Oversight Committee, and Global LEI Foundation Conference in London.

·       Bank of England Executive Director, Insurance Supervision Gareth Truran gives a speech at the Insurance Asset Risk Webinar.

·       Great Britain BRC Retail Sales Monitor YoY JUN

·       Hungary Inflation Rate YoY JUN

·       Slovakia Balance of Trade MAY

·       Greece Inflation Rate YoY JUN

·       Ireland Industrial Production YoY MAY

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.

Wednesday, July 10, 2024

Global

·       OPEC releases its Monthly Oil Market Report.

Americas

Political/Social Events –

·       In Bogota, Colombia, preparatory hearings begin in the trial of ex-president Alvaro Uribe, accused of bribing witnesses and fraud.

·       The Bahamas celebrates Independence Day, marking the date when the country gained its independence from the UK in 1973.

Economic Reports/Events –

·       Federal Reserve Board Chair Jay Powell will deliver the Semiannual Monetary Policy Report to Congress before the House Financial Services Committee.

·       Federal Reserve Governor Lisa D. Cook gives a speech entitled “Global Inflation and Monetary Policy Challenges” at the 2024 Australian Conference of Economists, Adelaide, South Australia.

·       USA MBA Mortgage Market Index JUL/05/ MBA Purchase Index JUL/05/ Fed Chair Powell Speech/ Wholesale Inventories MAY/ EIA Crude Oil & Gasoline Stocks Change JUL/05

·       Brazil Inflation Rate YoY JUN

·       Paraguay Balance of Trade JUN

·       Ecuador Balance of Trade MAY

·       El Salvador Inflation Rate YoY JUN

·       Peru Balance of Trade MAY

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       New Zealand Visitor Arrivals YoY MAY/ RBNZ Interest Rate Decision

·       South Korea Unemployment Rate JUN

·       Japan PPI YoY JUN/ Eco Watchers Survey Current & Outlook JUN

·       Philippines Imports/ Exports/ Balance of Trade MAY

·       Australia Building Permits MoM Final MAY/ Private House Approvals MoM Final MAY/ RBA Simon Speech

·       China Inflation Rate YoY JUN/ PPI YoY JUN

·       Indonesia Consumer Confidence JUN

·       Malaysia Unemployment Rate MAY

·       India M3 Money Supply YoY JUN/28

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Bank of England Chief Economist Huw Pill gives a speech at Asia House in London.

·       Romania Balance of Trade MAY

·       Slovakia Industrial Production YoY MAY

·       Turkey Industrial Production YoY MAY/ Unemployment Rate MAY/ Participation Rate MAY

·       Italy Industrial Production YoY MAY

·       Slovenia Industrial Production YoY MAY

·       Greece Industrial Production YoY MAY

·       Hungary Monetary Policy Meeting Minutes

·       Ukraine Inflation Rate YoY JUN

·       Russia Inflation Rate YoY JUN

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       The International Monetary Fund will discuss Egypt's Extended Fund Facility for its third review.

·       Saudi Arabia Industrial Production YoY MAY

·       Jordan Inflation Rate YoY JUN

·       Israel Consumer Confidence JUN

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Egypt Inflation Rate YoY JUN

·       Tanzania Inflation Rate YoY JUN

·       Mozambique Inflation Rate YoY JUN

Thursday, July 11, 2024

Global

·       The UN Security Council is scheduled to hold consultations on the United Nations Peacekeeping Force in Cyprus (UNFICYP). In the afternoon, it is scheduled to hold a briefing on Colombia, followed by consultations.

·       The International Energy Administration releases its monthly Oil Market Report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Federal Reserve Bank of Atlanta CEO & President Raphael Bostic will give the keynote “Call to Action” speech at the National Credit Union Administration’s DEI Summit 2024 in Minneapolis, Minnesota.  

·       Brazil Retail Sales YoY MAY

·       USA Inflation Rate YoY JUN/ CPI JUN/ Initial Jobless Claims JUL/06/ EIA Natural Gas Stocks Change JUL/05/ Fed Bostic Speech/ Monthly Budget Statement JUN/ Fed Balance Sheet JUL/10

·       Mexico Monetary Policy Meeting Minutes

·       Paraguay Consumer Confidence JUN

·       Peru Interest Rate Decision

Asia

Political/Social Events –

·       In Beijing, the China International Development Cooperation Agency holds the 2nd Conference of the Forum on Global Action for Shared Development through July 13.

Economic Reports/Events –

·       New Zealand Food Inflation YoY JUN

·       Japan Machinery Orders YoY MAY/ Foreign Bond Investment JUL/06/ Stock Investment by Foreigners JUL/06/ Machine Tool Orders YoY JUN

·       Australia Consumer Inflation Expectations JUL

·       Philippines Foreign Direct Investment APR

·       South Korea Interest Rate Decision

·       Thailand Consumer Confidence JUN

·       Malaysia Retail Sales YoY MAY/ Interest Rate Decision

·       China New Yuan Loans JUN/ M2 Money Supply YoY JUN/ Outstanding Loan Growth YoY JUN/ Total Social Financing JUN

·       Sri Lanka PPI YoY MAY

·       Indonesia Car Sales YoY JUN

Europe

Political/Social Events –

·       There will be an informal meeting of EU Environmental Ministers in Budapest, Hungary through July 12.

Economic Reports/Events –

·       Great Britain RICS House Price Balance JUN/ GDP YoY MAY/ Goods Trade Balance MAY/ Industrial Production YoY MAY/ Manufacturing Production YoY MAY/ Balance of Trade MAY/ Construction Output YoY MAY/ NIESR Monthly GDP Tracker JUN

·       Germany Inflation Rate YoY Final JUN

·       Romania Inflation Rate YoY JUN

·       Slovakia Construction Output YoY MAY

·       Turkey Retail Sales YoY MAY/ Foreign Exchange Reserves JUL/05

·       Ireland Inflation Rate YoY JUN

·       Serbia Interest Rate Decision

·       Belarus Inflation Rate YoY JUN

·       Russia Current Account Q2

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 –

·       South Africa Gold Production YoY MAY/ Mining Production YoY MAY/ Manufacturing Production YoY MAY

Friday, July 12, 2024

Global

·       The UN Security Council is scheduled to vote on draft resolutions concerning BINUH - United Nations Integrated Office in Haiti, and UNMHA - UN Mission to support the Hudaydah Agreement. Afterwards, it is scheduled to hold a briefing on the United Nations Office for West Africa and the Sahel (UNOWAS) followed by consultations.

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 –

·       New Zealand Business NZ PMI JUN/ Electronic Retail Card Spending YoY JUN

·       Singapore GDP Growth Rate Adv Q2

·       China Imports/ Exports/ Balance of Trade JUN

·       Malaysia Industrial Production YoY MAY

·       Japan Capacity Utilization MAY/ Industrial Production Final MAY

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Saturday, July 13, 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 –

·       Today is Sovereignty Day in Montenegro, celebrating when the Berlin Congress recognized the nation as independent in 1878.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, July 14, 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 –

·       Today is Bastille Day in France, celebrating the end of the French monarchy.

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.

Recommended Weekend Reads

July 5 - 7. 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.

U.S. Elections

• Trade Isn’t Great Retail Politics for Either Party   Kevin Nealer/Council on Foreign Relations

  Since the United States trade imbalance flipped sharply negative in the mid-1970s and nose-dived in the Ronald Reagan years, both the Democratic and Republican parties have sought to weaponize trade as a political wedge issue. That approach has not worked for either of them. As a result, trade is unlikely to be a major theme in the 2024 election cycle.  Broadly, Americans are now less supportive of the role of trade in the U.S. economy. But the picture gets muddled as you dig into those sentiments, with a bare majority believing trade does more good than harm. Support for trade has largely recovered from the historic low of the 2016 campaign levels, but a sharp partisan divide that reverses decades of preconceptions reveals Democrats are now more favorable to trade’s impacts than Republicans by a margin of nearly 2:1. Yet trade as an issue virtually never breaks into the top-ten list of voter concerns. Certainly, the term trade is often subsumed under broader economic concerns; voters rightly include trade neuralgia with macro-policy worries such as inflation and interest rates.

Tension in the Himalayas

• Why do India and China Keep Fighting Over This Desolate Terrain?    New York Times Magazine

  The 2,100-mile border separating India and China passes through some of the world’s most inhospitable terrain. In the west, it runs along India’s Ladakh region at an altitude of 13,000 to 20,000 feet. During the months when the area isn’t covered in snow, the ground resembles a moonscape. The earth is sandy, strewn with rocks and pebbles; not a blade of grass grows anywhere; there are no visible signs of animal life. In winter, temperatures can drop to –40 degrees. The bleak conditions and barren vistas can induce despair in those who set foot on the land. “I’ve been to those places,” a former Indian diplomat who now works for an international Buddhist organization in Delhi told me. “When you visit, you tend to think, Who the hell even wants this area?”

• Why the Himalayan Region is Integral to a Rules-Based Order in the Indo-Pacific The Diplomat

  Chinese militarization and expansionism in the Himalayas remains a perennial concern not just for India but for the United States – and its Indo-Pacific allies and partners.  China has been pursuing a “salami tactic” strategy with its neighboring states, including India and Bhutan, trying to rebrand the entire Himalayan region as “Xizang,” a Mandarin term for Tibet.

China

• China’s Growing Risk Tolerance in Space: Peoples Liberation Army Perspectives and Escalation Dynamics   Rand Corporation

  Chinese leaders see themselves in competition with the United States to build military power in space. The multiplication of U.S. and Chinese capabilities could lead to unstable competition in space, raising the risk of rapid, and perhaps unintended, military escalation. This report surveys open-source literature across the Chinese defense enterprise to present a composite image of People’s Liberation Army (PLA) perspectives and key factors for U.S.-China crisis stability in space. It draws on authoritative Chinese writings to understand Chinese perceptions of threats from the United States by reviewing Chinese publications on U.S. intent and capabilities in space. The report additionally traces the evolution of PLA thinking on escalation dynamics in space over the past two decades. The report concludes with an assessment of the challenges facing U.S. officials looking to manage U.S.-China crisis dynamics in space.
  
  

• National Perspectives on Europe’s De-Risking from China   Metrics

  The “de-risking” of relations with China has become an organizing principle for the European Union (EU) since it was first put forward by President of the European Commission Ursula von der Leyen in March 2023. This report of the European Think-tank Network on China (ETNC) analyses how 21 EU member states and the United Kingdom view de-risking from a national context. Each chapter is written by China experts who broadly set out to address the same set of questions with respect to their own country: What is the country’s standpoint on the EU’s approach to de-risking?  Which China-related risks is that country most concerned about? Was the country’s standpoint on de-risking resulted in any concrete measures? How does that standpoint affect the country’s views on or approach to China? 

Global Markets and Geoeconomics

• Sovereign Wealth Funds: Corruption and Other Governance Risks   Carnegie Endowment for International Peace

  In the 1990s, SWFs held $500 billion in assets, but by 2020, they had more than $7.5 trillion in assets under management (AUM), equal to about 7 percent of the global AUM of $111.2 trillion. Globally, prior to 2010, there were only fifty-eight SWFs. Today, however, SWFs have become an increasingly fashionable type of state-owned entity to set up, and there are currently 118 operating or prospective SWFs. In the African continent alone, prior to 2000, there were only two SWFs. Since 2000, sixteen new SWFs have been set up.  The report argues that what is particularly concerning about this dramatic growth is that SWFs have been established not just in countries with strong rule of law and civil liberty protections but also in countries marked by high corruption risks, insecurity, violence, and weak or absent rule of law.

• The Eclipse of the Petrodollar  Hippolyte Fofack/Project Syndicate

  Much of the reporting earlier this month about the “non-renewal” of a decades-old “petrodollar agreement” between Saudi Arabia and the United States was riddled with inaccuracies and half-truths. Some outlets even went so far as to allege that Saudi Arabia would “stop using the US dollar for oil sales.” Still, despite these errors, and although the dollar remains dominant, the momentum for de-dollarization is building, reflecting broad geopolitical and macroeconomic shifts.

• Top Dollar: Why the Dominance of America’s Currency is Harder Than Ever to Overturn  Eswar Prasad/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.  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.

Our Recommended Summer Reading List (Part II) - Plus, Some Great TV Shows!

July 2, 2024

As we promised in Part 1 of our Recommended Summer Reading Lists last month, here is our follow-up list of more books we’ve been plowing through this summer. Plus, there are a few shows we’ve become addicted to that we wanted to suggest to you. We would love to hear what you are reading (or watching) this summer - send us your recommendations. And we hope you enjoy this list!

• At the Edge of Empire: A Family’s Reckoning with China by Edward Wong (Viking Press 2024, 45 pages)

  Wong is a diplomatic correspondent and former Beijing Bureau Chief for the New York Times. He is also the son of Chinese immigrants who settled in Washington, D.C. His father had, before escaping to the US, served in the People’s Liberation Army but rarely spoke of life in China. Wong, when he became the Times Beijing Bureau Chief, decided to investigate his father’s mysterious past and, in so doing, learned and decided to write about what his family had endured and what the nation had experienced. It is a fascinating and highly insightful chronicle of the extraordinary changes China has undergone - and is still undergoing. 

• Moscow X by David McCloskey (W.W. Norton, 2023, 464 pages)

  If you are looking for a ripping good spy novel, Moscow X is the book to read. McCloskey is a former CIA analyst who wrote regularly for the President’s Daily Brief, delivered classified testimony to Congressional oversight committees, and briefed senior US government officials. He then went to McKinsey, focusing on national security, aerospace, and transportation clients on a range of strategic and operational issues. Armed with these rich experiences, McCloskey gives us a fantastic, fast-moving yarn of global espionage, the vicious internal politics of Putin’s Kremlin, the lives of Moscow’s super-wealthy, and the never-ending shadow war between the US and Russia. And if you like this one, try McCloskey’s earlier novel, Damascus Station (which I couldn’t put down, either). 

• No Trade is Free: Changing Course, Taking on China, and Helping America’s Workers by Robert Lighthizer ( Broadside Books, 2023, 364 pages)

  With the presidential elections fast approaching, understanding the thinking of Donald Trump’s foreign and trade policy is important. Lighthizer, previously Trump’s U.S. Trade Representative who oversaw the implementation of the tariff regime on China (which President Biden has essentially kept in place) as well as negotiation of the US-Mexico-Canada (USMCA) trade agreement, presents a crisp overview of what drives not just Trump’s but the current Republican view of free trade - essentially, there is no free trade and the US gives away too much. Lighthizer is no rube to Washington politics and policy, having previously served as Deputy U.S Trade Representative in the Reagan Administration, as an important congressional staffer focused on trade, and as a highly successful lawyer at one of the US’ biggest law firms. This is an excellent tutorial for understanding what is proving to be, in many ways, a rough Washington consensus on the future of globalization. And keep in mind: If Trump wins, Lighthizer is being widely touted as his likely Treasury Secretary.

• Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace by Matthew C. Klein & Michael Pettit (Yale University Press, 2020, 288 pages)

  This one is not new, but it was highly recommended by a friend of mine, who I consider a genius on trade and geoeconomic issues. The author’s premise is trade disputes are usually understood as conflicts between countries with competing national interests, “but they are often the unexpected result of domestic political choices to serve the interests of the rich at the expense of workers and ordinary retirees.” The authors go deep to understand how trade decisions are made, researching policy decisions in China, Europe, and the US over the last 30 years. The book is well-researched, provocative, and - following on the above book by Robert Lighthizer - is highly complementary and necessary to understanding how global trade policy is being rethought and reformulated. 

• The War Below: Lithium, Copper, and the Global Battle to Power Our Lives by Ernest Scheyder (One Signal Publishers, 2024, 370 pages)

  Almost three years ago, the U.S. Congress approved the spending of almost $1 trillion via the CHIPS Act, the Inflation Reduction Act, and the Infrastructure Bill - all highly dependent on accessing and using “critical minerals.” On a global scale, it is arguably the largest single driver of geopolitical tensions literally everywhere in the world. Everyone talks about critical minerals. But to be honest, I find most people really do not understand what is at stake and what it takes to get those minerals that are powering electric vehicles, solar panels, cell phones, and millions of other devices. Scheyder takes us, via this well-written and well-researched book, to school us on it all. This book is the perfect companion to the 2022 blockbuster “Chip Wars: The Fight for the World’s Most Critical Technology.” 

• The End of Everything: How Wars Descend into Annihilation by Victor David Hanson (Basic Books, 2024, 334 pages)

  Military historian Victor David Hanson looks at a series of sieges and sackings in history to show how societies can and have been obliterated and that war is indeed hell and can wipe out a city, a race, a nation, or a culture. 

• American Buffalo: In Search of a Lost Icon by Steven Rinella (Random House, 2009, 304 pages)

  This is an old one but one of my very favorites. If you are a hunter of fisherman, you probably know who Steve Rinella is - a chef, an outspoken conservationist, and a hunter and fisherman. In 2005, he won a lottery permit to hunt for a wild buffalo, or American bison, in the Alaskan wilderness. Despite the odds—there’s only a 2 percent chance of drawing the permit, and fewer than 20 percent of those hunters are successful—Rinella managed to kill a buffalo on a snow-covered mountainside and then raft the meat back to civilization while being trailed by grizzly bears and suffering from hypothermia. While that is all fascinating, what makes this book a true masterpiece is his deeply researched extraordinary history of the buffalo in America going back 14,000 years. I was blown away by what I learned and I promise it will give a deeper love for our environment and for one of the most majestic animals still walking the face of North America.

Television Recommendations

• Clarkson’s Farm (Amazon Prime - 3 seasons and more coming)

  I am blessed to live on a small farm - Open Door Farm - outside Washington, D.C. My wife is the farmer, and she’s quite good at it, raising sheep, chickens (Swedish Isebars), Turkeys (Heritage), Guinea Fowl (which eat almost 300 ticks a day!), horses, German Shepards, and Burmese cats. Growing up, I was rarely exposed to animals in general, and I cannot remember even stepping foot on a farm. It has been the greatest experience, thanks to my wife, being around all these animals. But I am most amazed by how little friends, associates, and business colleagues have been exposed to farm life, too. We are all the sad victims of a tech-dominant world with too many apps. Recently, I was asked to speak before a major midwestern farming organization, and in prepping for the event, I asked the coordinator (an agro-economist) what he thought was the best way for folks to learn about farming. Without missing a beat, he said, “Watch Clarkson’s Farm!” He was so right. Starring Jeremy Clarkson (best known for his long-running show “Top Gear”), it is a wonderfully funny, real, and massively enlightening way to learn how farming actually works - from raising livestock to growing agriculture. It shows episode after episode, the massive challenges farmers face getting food onto our tables - something we all take too much for granted. 

• Manhunt (Apple TV+)

  We all periodically hear the complaint the US is going through the worst times in our history. Wrong. Watch this magnificently acted, historically accurate 7-part mini-series on the manhunt for John Wilkes Booth and his co-conspirators responsible for assassinating President Abraham Lincoln, the attempted simultaneous murder of Vice President Andrew Johnson, Secretary of State William Seward, and Secretary of War Edward Stanton just five days after General Robert E. Lee surrendered in Appomattox. If you watch this show, you will be given a fantastic lesson on what was the most truly perilous time in our democracy. And you will learn a lot about a truly great but largely forgotten American hero, Secretary of War Stanton. Stanton, deeply devoted to Lincoln and his vision for reunifying the country, personally oversaw the manhunt - often racing about the countryside with a Union Calvary unit, interrogating suspects and collaborators, all while overseeing the implementation of Lincoln’s plans for integrating freed slaves into American society - plans which were vigorously opposed by Lincoln’s successor, President Andrew Johnson. 

  I love history but was amazed at how little I actually knew about the true extent of the assassination plan: The role of the Bank of Montreal, of wealthy businessmen in New York, of the Confederate Secret Service, and the direct knowledge and approval of the plans by Confederate President Jefferson Davis. And how all of them were attempting to reignite the Civil War. 

  But the biggest surprise for me? I won’t ruin it for you, but just say make sure you watch the very end of the last episode to see the extraordinary thing Stanton did to stay in power so he could ensure Lincoln’s vision was put in place. This is a superb series.

• Tokyo Vice (Max - 2 seasons - not clear if there will be another season)

  It is an edgy, gritty, and always thrilling dramatization of the real-life story of American Jake Adelstein, who went to Tokyo and became a crime-beat reporter at the prestigious Yomiuri Shinbun newspaper. The viewer is plunged into the complex, tradition-bound world of the Yakuza, Japan’s transnational organized crime syndicates, as Adelstein endures intense threats to himself, his friends, and even his family back in the US as he writes about the powerful, sprawling Japanese mobs. Maybe best of all is the acting of legendary actor Ken Watanabe. The real-life Adelstein wrote his memoirs “Tokyo Vice: An American Reporter on the Police Beat in Japan” in 2009, which I hope to read later this summer. 

GeoData

This is our weekly collection of important data points we believe may impact the future geopolitical outlook.  We hope you find it useful.  Please let us know if you have any questions.

Japan’s Answer to The Growing Shortage of Truck Drivers (Due to the Nation’s Spiraling Population Decline)? Build a 310-mile-long Conveyor Belt

The Japanese government has announced plans to build a 310-mile-long conveyor belt—an “Autotflow Road”—to move freight to and from Tokyo and Osaka. The belt would move the equivalent of freight that 25,000 trucks (and, thus, 25,000 drivers) move per day.

Why are they doing this? Japan’s dire population decline, it is expected that the number of truck drivers will shrink from 660,000 to 480,000 by 2030. 

It should be noted the government is also making the point that they believe it will help reduce greenhouse emissions and ease Tokyo’s notorious traffic congestion. The expected cost would be approximately $500 million per 6-mile stretch.

But Japan is not the only country planning giant conveyor belt systems. In the UK, the British company Magway is planning a system that would send goods around London on a “magnetic surfboard” - a levitating magnetic field in hundreds of miles of narrow tunnels and pipes. And Switzerland is working on the Cargo Sous Terrain, a 310-mile network of underground freight tunnels. The first 43-mile section between Zurich and Häkingen is expected to open in 2031 and the rest by 2045.

Love Don’t Live Here No More: Majority of Chinese and Saudis Dislike Russia. Indians are Not Too Fond of Russia, Either.

Russian President Vladimir Putin has been focusing heavily on winning the hearts and minds of the Global South. We all saw his recent visits to North Korea and Vietnam, and he has been meeting with other leaders in Moscow on a tear. But this does not seem to be improving his or Russia’s overall approval ratings around the world. 

Three examples: In a new poll released by Morning Consult, in China - which is seeing significant economic benefit from increased trading due to the Ukraine War - Russia comes in the low 40 percent approval range. That is down from a high of more than 75 percent in 2022. In Saudi Arabia - which Putin has tried but failed to build relations with - Russia comes in below 25 percent approval ratings.  Even India - which, like China, has benefitted from a significant uptick in trade with Russia, particularly in the oil sector - seems to not like Russia much, coming in just below 50 percent. 

The one factor that emerges as to why Russia is not building a fan base in the Global South is the invasion of Ukraine. All the numbers started to tank after Putin ordered the attack. 

Corporate Earnings, the U.S. 2024 Elections, and The Constancy of Political Risk Concerns in the C-Suite

Political risk continues to be a consistent issue of focus among corporate leaders and in corporate earnings and projections. The New York Times Dealbook had an interesting little piece on how often the upcoming U.S. presidential elections are being mentioned in earnings calls.

 In Q2, election-related issues have come up 364 times (per data provider AlphaSense.) - that’s more than in 2016 when the topic was raised 307 times but, as Dealbook points out, is below the rate that led to the all-time high of 902 times in 2020. 

But we still have another reporting quarter to go - which I suspect will spike this number up considerably. At the very least, it shows that political risk is embedded in the corporate strategies of most major corporations (and that is a smart and good thing).

The Global Battle for Chip Supremacy is Really a Battle for High-Skilled Workers

In 2022, the U.S. Congress passed the CHIPS Act, authorizing $280 billion in new funding to encourage domestic research and manufacturing of semiconductors.  So far, $30 billion in direct subsidies and $25 billion in loans have been handed out to support roughly $350 billion in investments.   As the Semiconductor Industry Association pointed out, this is likely to trip U.S. chipmaking by 2023, taking the output of advanced logic chips from zero in 2022 to 28 percent of total global production. 

But the big question hanging over the ultimate success of this massive effort is where is the U.S. going to get the workforce.  As Bloomberg recently reported, “To build and run those fabs, however, companies need workers the US doesn’t have. Shortages of skilled installers of hyper-precise chipmaking equipment have already delayed projects. The number of Americans studying in relevant graduate programs has been flat for 30 years. A third of current fab workers are 55 and older, and more than half say they’re eager to quit. The Semiconductor Industry Association says chipmakers will face a shortfall of 67,000 skilled workers by 2030.”

Congress, anticipating this challenge, appropriated (only) $200 million to help build training and educational programs to help build the workforce.  But that will not satisfy the challenge as current trends in the various programs of study necessary for chipmaking show.

What to do?  Currently, there are two options, and they are not mutually exclusive: 1. Pour more money into programs for advanced degrees in the necessary fields for chip manufacturing jobs, and 2. Significantly hike the number of H-1B visas, allowing highly-skilled foreign workers into the U.S. Neither option is politically easy to achieve, but pressure will be growing in the next few years to move on both options.

Russia is Selling Ukraine’s Grain. And Among the Country’s They Sell It To Are Two NATO Members

Radio Free Europe/Radio Liberty (RFE/RL) recently investigated of what happened to millions of tons of Ukrainian wheat, grain, and peas seized by Russian forces. Incredibly, they discovered Russia sold it mostly to Iran, Azerbaijan, and Syria as well as Spain and Turkey - both NATO members. Using satellite photography provided by NASA’s Harvest Program, At least 6.4 million tons of Ukrainian-grown wheat alone was harvested by Russia and sold. 

As RFE/RL explains, “…the European Union has banned over 91.2 million euros ($97.6 million) worth of Russian imports but has avoided barring Russian-EU trade in food and health products “in order not to harm the Russian population,” an EU explainer states. Clearly, Moscow is now taking advantage of this as a further money-maker to fund the war.

The Global Week Ahead

June 30 - July 7, 2024

Elections are again dominant on the global stage this coming week.  As of this writing, the French far-right National Rally Party, led by Marine Le Pen, has scored a massive victory in parliamentary elections.  A run-off election will be held next Sunday to determine how significant the margin of victory will be.  But it appears it will be just short of an outright majority as French President Emmanuel Macron’s alliance of centrist parties are looking to potentially form an alliance with the far-left bloc to blunt the National Rally’s power in parliament.

Also this week,  the UK holds parliamentary elections this Thursday .  Looking at polls, the Labor Party is positioned to score a massive win – perhaps by the biggest margins in UK history.  The Economist is estimating Labor could win as many as 434 seats – far more than the 334 seats needed to hold a majority.  The Conservatives could shrink to as little as 106 seats from their current 365 seats.

But the most watched election-related event this week is not an actual vote but rather what President Biden will do after his disastrous debate performance.  We do not believe President Biden will withdraw despite growing pressure, as most senior Democratic leaders (former Presidents Obama and Clinton, former Speaker Nancy Pelosi, etc.) have rallied to support the President staying in the race.  However, the debate over the President’s mental and physical abilities and whether he should stand down will not go away any time soon and will likely intensify as Republicans get ready for the Republican Convention in Milwaukee, Wisconsin, on July 15.

Elsewhere in the world, the EU is set to make a significant decision this week.  The EU will formally select its next Commission President, with current President Ursula von der Leyden likely to retain her position.  This decision comes at a crucial time as Hungary, a long-standing antagonist of EU policies (especially its support for Ukraine), assumes the six-month chair of the European Union.  EU leaders are actively strategizing to counter Hungary's potential efforts to implement policies that could undermine current EU's consensus policies.

We also note another change taking place this week  in another important chair: At the United Nations today, Russia takes the chair of the UN Security Council for the month of July.

On the global economic radar screen, the big event this week will be the European Central Banks Conference, which will be held in Sintra, Portugal.  Federal Reserve Chair Jay Powell and several other major central bank chiefs will be there, too, speaking on panels and likely giving important insights on global economic policy.

In the US, markets will look to the Fed releasing the June FOMC meeting minutes and the JOLTs and ADP data on Tuesday and Wednesday, leading into the overall jobs numbers report on Friday.  Looking at Europe, Germany, Italy, France, and Spain release CPI reports.  In Asia, China releases June PMIs and the Caixin indices, which will give a clearer indication of whether the country's growth is returning to normal.  And Indonesia, the Philippines, South Korea, and Taiwan are due to release their June inflation reports.

Below is everything else we are watching happening around the world in the coming week:

Sunday, June 29, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·      Uruguay will hold primary elections ahead of its Oct. 27 general election

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 the chair tomorrow, July 1.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Qatar will host the third U.N.-led meeting of special envoys to Afghanistan in Doha through July 1, and the Afghan Taliban will attend.

·       Egypt will host the Egypt-EU Investment Conference in Cairo.

Economic Reports/Events –

·       Saudi Arabia Unemployment Rate Q1/ M3 Money Supply YoY MAY/ Private Bank Lending YoY MAY

·       Israel Composite Economic Index MoM MAY

Monday, July 1, 2024

Global

·       Russia assumes the presidency of the UN Security Council for the month of July.

Americas

Political/Social Events –

·       Panama will inaugurate Jose Raul Mulino as president.

·       In Mexico, judicial branch workers are expected to go on strike to show their opposition to President-elect Claudia Sheinbaum’s legal reform plan that would make all judges elected positions.

·       The US Congress is out this week for the Independence Day holiday.

Economic Reports/Events –

·       Mexico Business Confidence JUN

·       Chile IMACEC Economic Activity YoY MAY

·       Brazil S&P Global Manufacturing PMI JUN/ Balance of Trade JUN/ BCB Focus Market Readout

·       USA S&P Global Manufacturing PMI JUN/ ISM Manufacturing PMI JUN/ ISM Manufacturing Employment JUN/ Construction Spending MAY

·       Colombia Business Confidence MAY

·       El Salvador Current Account Q1/ GDP Growth Rate YoY Q1

·       Peru Inflation Rate YoY JUN

Asia

Political/Social Events –

·       Hong Kong marks 27 years since it was returned to Chinese rule.  Meanwhile, on the mainland, Monday is the first anniversary of an updated counterespionage law that expanded the definition of spying and gave authorities sweeping new powers.

Economic Reports/Events –

·       Australia Judo Bank Manufacturing PMI Final JUN/ ANZ-Indeed Job Ads MoM JUN/ CoreLogic Dwelling Prices MoM JUN

·       South Korea Exports/ Imports/ Balance of Trade JUN

·       Indonesia S&P Global Manufacturing PMI JUN/ Inflation Rate YoY JUN/ Tourist Arrivals YoY MAY

·       Japan Jibun Bank Manufacturing PMI Final JUN/ Consumer Confidence JUN

·       Malaysia S&P Global Manufacturing PMI JUN

·       Philippines S&P Global Manufacturing PMI JUN/ Business Confidence Q2/ Consumer Confidence Q2

·       Taiwan S&P Global Manufacturing PMI JUN

·       Vietnam S&P Global Manufacturing PMI JUN

·       China Caixin Manufacturing PMI JUN

·       Singapore Bank Lending MAY

·       India HSBC Manufacturing PMI Final JUN

·       Kazakhstan S&P Global Manufacturing PMI JUN/ Inflation Rate YoY JUN

·       Thailand Retail Sales YoY APR

·       Pakistan Inflation Rate YoY JUN/ Wholesale Prices YoY JUN/ Balance of Trade JUN

·       Sri Lanka Current Account Q1

Europe

Political/Social Events –

·       Hungary assumes the rotating presidency of the Council of the EU.

·       The First payment to Ukraine of Russa’s windfall profits made from frozen Russian assets in the European Union are expected to be made.

·       Armenia and Azerbaijan will submit work regulations to their governments for approval to resume operation of the bilateral border demarcation commission.

Economic Reports/Events –

·       ECB President Christine Lagarde gives an introductory speech at the opening reception of the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

·       Ireland Consumer Confidence JUN/ AIB Manufacturing PMI JUN/ Harmonized Inflation Rate YoY Prel JUN

·       Romania BCR Manufacturing PMI JUN

·       Russia S&P Global Manufacturing PMI JUN/ Consumer Confidence Q2

·       Great Britain Nationwide Housing Prices YoY JUN/ BoE Consumer Credit MAY/ S&P Global Manufacturing PMI Final JUN/ M4 Money Supply MoM MAY/ Mortgage Approvals & Lending MAY

·       Hungary Balance of Trade Final APR/ HALPIM Manufacturing PMI JUN

·       Switzerland Retail Sales YoY MAY

·       Euro Area ECB Non-Monetary Policy Meeting/ HCOB Manufacturing PMI JUN/ ECB Forum on Central Banking

·       Poland S&P Global Manufacturing PMI JUN

·       Turkey Istanbul Chamber of Industry Manufacturing PMI JUN

·       Spain HCOB Manufacturing PMI JUN

·       Italy HCOB Manufacturing PMI JUN

·       France HCOB Manufacturing PMI JUN

·       Germany HCOB Manufacturing PMI JUN/ Baden Wuerttemberg CPI YoY JUN/ Bavaria CPI YoY JUN/ Brandenburg CPI YoY JUN/ Hesse CPI YoY JUN/ North Rhine Westphalia CPI YoY JUN/ Saxony CPI YoY JUN/ Inflation Rate YoY Prel JUN

·       Greece S&P Global Manufacturing PMI JUN/ Unemployment Rate MAY

Middle East

Political/Social Events –

·       The U.N. ban on Iranian production of IR-6 and IR-8 centrifuges will expire.

Economic Reports/Events –

·       Kuwait M2 Money Supply YoY MAY

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nigeria Stanbic IBTC Bank Nigeria PMI JUN

Tuesday, July 2, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       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.

Asia

Political/Social Events –

·       In Thailand, election authorities will announce the names of 200 new senators who passed a final round of scrutiny, after an obscure process in which 20 professional groups nominated and voted for their peers without input from the general public. While the new Senate will not have a say in future votes for prime minister it will maintain oversight of the executive

branch and a role in appointing members of independent organizations such as the election and anti-corruption commissions. Nothing significant to report.

Economic Reports/Events –

·       New Zealand NZIER Business Confidence Q2/ NZIER Capacity Utilization Q2

·       South Korea Inflation Rate YoY JUN

·       Philippines PPI YoY MAY

·       Australia RBA Meeting Minutes

Europe

Political/Social Events –

·       European Commission President Ursula von der Leyden is expected to be formally chosen for another term.

·       In the Italian city of Siena, the Il Palio bareback horse race - where riders race each other through the center of the city – takes place.

Economic Reports/Events –

·       European Central Bank Vice President Luis de Guindos chairs Session 1 "The rise and fall of inflation in the euro area – past, present and future" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

·       European Central Bank Board Member Frank Elderson chairs Session 2 "The economics of biodiversity at ECB Forum on Central Banking" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

·       European Central bank Board Member Isabel Schnabel chairs Panel 1 "Geopolitical shocks and inflation" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

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.

Wednesday, July 3, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Grenada hosts a the 47th Regular Meetings of the Conference of CARICOM (Leaders from Caribbean Community). 

Economic Reports/Events –

·       New York Federal Reserve Bank President John Williams to participate on “Panel 2: Drivers of Equilibrium Interest Rates" before hybrid European Central Bank Forum on Central Banking 2024.

Asia

Political/Social Events –

·       The Shanghai Cooperation Organization meets in Kazakhstan.  The Organization is a China-led grouping considered part of Beijing's effort to promote an alternative world order. But there is no shortage of friction between the nine full members, which include India and Pakistan, Iran, Russia, and several Central Asian states.  However, Indian Prime Minister Narendra Modi is not expected to attend.

·       Vietnamese Prime Minister Pham Chinh will travel to Seoul, South Korea to meet with Prime Minister Han Duck-soo.  Chinh will also meet with business leaders to encourage further investment in Vietnam.

·       Indonesia's Ministry of National Development Planning hosts the Green Economy Expo in Jakarta from Wednesday to Friday. The CEO of energy giant Pertamina and the head of fertilizer maker Pupuk Indonesia are among those expected to attend.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       European Central Bank Board Member Luis de Guindos chairs of Session 3 "Monetary Policy Cycles" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

· European Central Bank Board Member Piero Cipollone chairs Session 4, "Euro area productivity in the short and long-run," at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

·       European Central Bank Board Member Philip R. Lane chairs Panel 2 "Drivers of equilibrium interest rates" at the ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

·       European Central Bank President Christine Lagarde gives closing remarks at ECB Forum on Central Banking 2024 "Monetary policy in an era of transformation" in Sintra, Portugal.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       The BlueInvest Africa event, organized by the European Commission, begins in Diani, Kenya, to discuss opportunities in the “blue economy” – maritime and coastal sectors and interior waterways.

Economic Reports/Events –

·       Nothing significant to report.

Thursday, July 4, 2024

Global

·       Nothing significant to report.

Americas

Political/Social Events –

·       Today is Independence Day in the United States.  Financial markets banks, and the government are closed so we can celebrate our freedom.

·       Ecuador's United Workers Front union will march in opposition to the end of fuel subsidies.

·       The political campaign period for the July 28 presidential election in Venezuela will begin.

·        Argentine President Javier Milei will meet with Chinese President Xi Jinping in Beijing, China (to be confirmed)

Economic Reports/Events –

·       Nothing significant to report.

Asia

Political/Social Events –

·       The World Artificial Intelligence Conference begins in Shanghai, China.  The state-backed four-day event will showcase the latest technology under the theme "Governing AI for Good and for All."

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       The United Kingdom holds parliamentary elections. The Labour Party is widely expected to sweep the elections.

·       The European Union's provisional tariffs on China's electric vehicles are due to take effect, barring an 11th-hour deal between the two sides. Europe in mid-June said it would slap additional duties of up to 38% on imported cars deemed to have been unfairly subsidized by the Chinese state. But the move has stirred concerns over potential retaliation, with major auto exporter Germany pushing for a compromise.

·       Today is the deadline for the European Commission to decide on a proposed acquisition by Lufthansa of a minority stake in Italy’s state-owned ITA Airways.

Economic Reports/Events –

·       European Central Bank Board Member Philip R. Lane gives the Master in Economics and Finance (MEF) 2024 Lecture at the University of Naples Federico II in Naples, Italy.

·       European Central Bank Board Member Elizabeth McCaul participates in the 28th Annual Economist Government Roundtable in Athens, Greece.

·       European Central Bank Board Member Piero Cipollone gives a keynote speech at the 15th edition of the National Statistics Conference in Rome, Italy.

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.

Friday, July 5, 2024 

Global

·       The 100th Anniversary of the Paris Olympic Games opening ceremony is today where the modern games are being held. This year’s Olympics begin on July 26 and run through August 11.

Americas

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       New York Federal Reserve Bank President John Williams to give keynote before the 4th Suresh Tendulkar Memorial Lecture event organized by the Reserve Bank of India.

Asia

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       NATO Secretary General, Jens Stoltenberg, will give a press conference at the NATO Headquarters in Brussels, to preview the NATO Summit in Washington DC.

Economic Reports/Events –

·       European Central Bank President Christine Lagarde participates in an 0n-stage conversation at the 24th edition of Les Rencontres Economiques d'Aix-en-Provence 2024 "Relier les mondes" in Aix-en-Provence, France.

·       European Central Bank Board Member Frank Elderson gives introductory remarks followed by Q&A on a panel entitled "Embedding data culture in supervision" at Data Innovation for Future of Regulation (DIFoR) Conference organized by the Financial Conduct Authority in London, UK.

Middle East

Political/Social Events –

·       Iran holds the second round of presidential elections.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Saturday, July 6, 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 –

·       Tokyo votes to elect its next governor, bringing an end to a two-week race between incumbent Yuriko Koike, backed by Japan's ruling Liberal Democratic Party, and her main challenger, Renho Saito, endorsed by the opposition. Over 11.5 million Tokyoites are registered to vote, and a record 56 candidates are on the ballot. The winner will hold the job for four years and oversee Japan's largest municipal budget.

Economic Reports/Events –

·       Nothing significant to report.

Europe

Political/Social Events –

·       In London, the National March for Palestine organized by the Stop the War coalition takes place.  Organizers expect at least 100,000 people to attend.

Economic Reports/Events –

·       Nothing significant to report.

Middle East

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Africa

Political/Social Events –

·       Nothing significant to report.

Economic Reports/Events –

·       Nothing significant to report.

Sunday, July 7, 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 –

·       France holds the second round of parliamentary elections.

·       In Pamplona, Spain the annual Running of the Bulls takes place.

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