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COUNTRY INSIGHTS

Economics: Some claims of significant job growth overlook important points of weakness
MEXICO · Report · 11 Jul 2022

The most recent labor sector indicators reveal continuing weakness in major segments of the Mexican economy even as some analysts and officials have argued that a frank recovery in employment is underway. While growth trends can be seen in indicators of the formal sector’s employment, average wag...

Reverse FX swaps rolled over today, likely base rate increase tomorrow
HUNGARY · In Brief · 11 Jul 2022

Last week, the MNB said that it may pull the base rate (currently 7.75%) up to the new level of the 1-week deposit rate (9.75%) already this week, rather than waiting for this month's regular rate-setting meeting on July 26. They most probably meant that this would happen at tomorrow's (Tuesday, ...

In Press Conference, Economic Minister Batakis confirms IMF program
ARGENTINA · In Brief · 11 Jul 2022

In today’s press conference, Economic Minister Silvina Batakis (SB) gave some insight into what her economic objectives are. Although many of her announcements express an agenda, rather than actions that have effect immediately, her conference had a clear attempt to bring some tranquility to the ...

Greater GDP Growth in 2022 and Contradictory Impulses
BRAZIL ECONOMICS · Report · 11 Jul 2022 · 1 response

All indications are that GDP will expand more than previously expected in 2022, by around 2% instead of our previous projection of 1.6%. The steep decline of unemployment, the better performance of real retail sales and exports, the evidence of recovery of civil construction and the growth of all...

A walled-in opposition and other weekly topics
BRAZIL POLITICS · Report · 11 Jul 2022

This is the last week of activity in Congress before the recess. Members of Congress will vote on the Budget Guidelines Law (LDO). In the House, the priority will be to vote on the Social Benefits Constitutional Amendment Proposal (PEC). Paulo Guedes and Adolfo Sachsida participate in the Senate ...

Russia and EU blocking each other's goods
RUSSIA / FSU POLITICS · In Brief · 11 Jul 2022

On July 10 Russia said it is stopping gas exports via Nord Stream to Germany for 10 days. It is claimed this is for maintenance work. Germany suspects this is to punish Germany for backing Ukraine. Gas from the pipeline is sold to other EU states. On July 10 Canada said it has repaired a turbine ...

Russia allows Kazakh oil through
RUSSIA / FSU POLITICS · In Brief · 11 Jul 2022

On July 11 a Russian court ruled that the 30-day bank on unloading Kazakh oil is illegal. Relations between the two former Soviet republics had been soured by this. Now Kazakhstan will have to pay a mere USD 3,000 fine instead.  On July 5 the President of Kazakhstan said that his country would fi...

The current account surplus widens in 2Q22
RUSSIA ECONOMICS · In Brief · 11 Jul 2022

The Central bank reported that Russia's current account surplus widened in 2Q22 to $70.1 bn from $68.4 bn in 1Q22, and reached $138.5 bn in 1H22. In 1H21 this surplus accounted for $39.7 bn. The CBR no longer publishes detailed balance of payments statistics as it used to do, so that a few very a...

A PT supporter was murdered by one of Bolsonaro’s followers, Congress will vote on presidential vetoes and the LDO, and a series of polls will be published throughout the week
BRAZIL POLITICS · Report · 11 Jul 2022

Despite being an isolated incident, the murder will likely be investigated politically. The issue is not good for the government, although it is difficult to measure its impact in terms of intended votes. Today, Congress will vote on presidential vetoes, including the vetoes dealing with the rail...

Next rate hike likely to be 0.5% as well
ISRAEL · Report · 11 Jul 2022

1. Rates increased by 0.5% last week, but the hawkish tone was somewhat surprising. 2. The fiscal surplus in the last 12 months reached 0.4% GDP on strong tax revenues; good news for the bond market. 3. Business sector sentiment remains robust, with expectations for further expansion. 4...

Next rate hike likely to be 0.5% as well
ISRAEL · In Brief · 10 Jul 2022

Inflation: We expect June’s CPI (to be released on Friday) to increase by 0.5% m/m (4.6% y/y, up from 4.1% in May), impacted by a 9.4% increase in petrol prices and a sharp increase in travel abroad prices. Food prices also moved higher, while fresh produce prices declined as well as apparel pric...

Russia twinning Ukrainian towns with Russian towns
RUSSIA / FSU POLITICS · In Brief · 09 Jul 2022

On July 4 the Kremlin said that St Petersburg was twinned with Mariupol, Ukraine. The Governor of St Petersburg visited the city. Over 90% of Mariupol's buildings were damaged or destroyed in the war. The governor visited a school and distributed computers. Schools in St Petersburg shall help Mar...

Tetchy G20 for Russia
RUSSIA / FSU POLITICS · In Brief · 08 Jul 2022

On July 8 the meeting of the 20 largest economies took place in Indonesia. Western countries inveighed against Russia. Western countries did not walk out when Lavrov addressed the conference. The Russian Foreign Minister Lavrov walked out of the meeting because of Germany castigating the invasion...

CPI-inflation and cash budget deficit: bad news and good news
HUNGARY · In Brief · 08 Jul 2022

The forint is trading around EURHUF405 again, even though the MNB sold €1588m in exchange for forints for three days in reverse swaps today. Amidst these circumstances, key fundamental data appears to be particularly important. In that regard, there has been equally bad news and good news today. ...

Financial repression galore
TURKEY · Report · 08 Jul 2022

Ankara is getting increasingly desperate in its efforts to stop TL weakness and slow credit growth, against a backdrop of hugely negative real interest rates. The introduction of myriad ad hoc and distortionary measures – or ever-growing “financial repression”, in short – is having limited effect...

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