Country Insights

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Is the MNB's new inflation view consistent with the labor market?
HUNGARY - Note 24 Jun 2017
Our short answer is: no, it is most probably not. Our long answer is: the reader should decide, based on available information.On June 20, the Monetary Council presented its new quarterly view on inflation. It basically said that due to a favorable change in ext...

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Ready to grow
CHILE - Monthly Report 23 Jun 2017
The Central Bank kept the Monetary Policy Rate (TPM) at 2.5% at its June Monetary Policy Meeting. Likewise, the communiqué barely changed from May. The June communique corroborated the minutes of May’s meeting and the latest Inflation Report that 2.5% is a floor...

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Pre-Holiday (Contrarian) Musings
TURKEY - Special Report 23 Jun 2017
Turkish markets will be closed on Monday-Tuesday, as part of the end-of-Ramadan holiday (Eid Al-Fitr) that starts over the weekend. We thought it’d be useful to recap some of the recent data releases and share a few somewhat contrarian thoughts on where things s...

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Will there be peace?
PHILIPPINES - Note 22 Jun 2017
It has been one month since President Rodrigo Duterte declared martial law in Mindanao following what he said was an act of rebellion by a group of Muslim extremists that had pledged allegiance to the Islamic State (ISIS). Fighting between government forces and ...

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Economics: The Financing Tap is Tightening
MEXICO - Weekly Trends 22 Jun 2017
The issuance of credit to the non bank private sector slowed during the first quarter of 2017 relative to the pace of previous years. Both the business and consumer credit segments continue to grow at better than 5%, but that is well below the levels of past yea...

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Finance Minister Alfredo Thorne will resign.
PERU - Note 21 Jun 2017
Finance Minister Alfredo Thorne will resign after Congress denied him a confidence vote he formally requested. His resignation comes as part of the fallout concerning the government efforts to revive the proposed airport project at Chinchero, Cuzco. The construc...

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Politics: Elections and Democracy in Question
MEXICO - Weekly Trends 21 Jun 2017
Opposition parties and candidates are mounting legal challenges to the official vote counts in two of the June 4 gubernatorial elections (Coahuila and the State of Mexico), in a pattern that has become all too predictable in Mexico for decades, in which there is...

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People’s Bank promotion?
CHINA FINANCIAL - Monthly Report 20 Jun 2017
Special points to highlight in this issue: • It has long been expected that Zhou Xiaochuan will soon retire as governor of the People’s Bank of China. Guo Shuqing and Yi Gang have usually been suggested as his most likely replacement, with Liu Shiyu sometimes ...

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The Current Account Deficit Widens in the First Quarter of 2017
SOUTH AFRICA - Market Brief 20 Jun 2017
Despite the South African trade surplus’ being sustained for the second consecutive quarter in Jan-Mar 2017 (registering R57 billion in first quarter of 2017 and R56 billion in the final quarter of 2016), the deficit of the current account balance widened from R...

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Week of June 19
BRAZIL POLITICS - Weekly Trends 19 Jun 2017 1 response
The interview given by businessman Joesley Batista to Época magazine will continue to reverberate in Brasília. Federal Police may conclude the expert analysis of the tape recording of the conversation between Batista and President Michel Temer. The President wi...

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The Political Crisis and the Worsening of the Economic Scenario
BRAZIL ECONOMICS - Quarterly Outlook 19 Jun 2017
From a purely economic standpoint and a strictly short-term scenario, the current crisis is not as severe as many of the previous ones, but in the political realm the story is very different. Governability has eroded, making it virtually impossible to win approv...

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Will Correa Wait Four Years To Return?
ECUADOR - Monthly Report 19 Jun 2017
President Lenín Boltaire Moreno is facing, and will continue to face, many challenges. Not all of them come from the outside. It took former president Rafael Correa less than a month to publicly air his disagreements with some of Moreno’s decisions, especially...

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Stronger Economy, Weaker Politics
HUNGARY - Monthly Report 19 Jun 2017
The optimism of official and market forecasters regarding this year’s growth prospects has been justified so far by actual data, even though the government’s 4.1% GDP growth forecast still seems to be at the upper end of existing forecasts. But growth is followi...

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The Signs of Economic Activity
BRAZIL ECONOMICS - Market Brief 19 Jun 2017
Last week was filled with positive data on April’s economic activity, suggesting the recovery recorded in the first quarter might extend to the second. Along with the continuing fall of the interest rate, other forces are also acting in the direction of economic...

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No change in policy rate expected
PHILIPPINES - Note 16 Jun 2017
How likely is it that the BSP will raise interest rates when the Monetary Board meets on Thursday, June 22? The question has come up following the US Fed’s decision to hike its policy rate by 25bp on Wednesday. The move brought the cumulative increase in the US ...