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Apparently, president Putin has decided to break Ukraine's resistance at all cost. At least this is the markets' conclusion from today's war events. Hungarian assets are hit hard: the BUX fell 10%, OTP fell 18%, and the forint dropped to 379.6 against EUR, the weakest ever level, earlier today. A...

Canada bans Russian crude

CIS POLITICS · In Brief · 01 Mar 2022

On February 28 Ottawa made the announcement and said it was to penalize Russia for the invasion of Ukraine. Canada bought only USD 170 million of Russian oil 2021 so the ban will have minimal impact on both countries. Canada has large oil reserves of its own.What would make a big difference is if...

The sixth day of war: Russians target more civilian deaths

UKRAINE · In Brief · 01 Mar 2022

We have no big changes at the front. Ukrainian army destroyed several more groups of Russian forces which targeted to take Kyiv into circle. Also Ukraine received 70 fight airjets from the EU countries to cover the sky and the jets promptly joined actions already yesterday. A big change that we o...

Belarus referendum allows Russian nukes and extends Lukashenka's power

CIS POLITICS · In Brief · 01 Mar 2022

On February 27 the vote was held. The result was yes to the reform package. It was claimed that 65% of people voted. This is hard to believe given the apathy of the electorate. The reforms allow Lukashenka to seek more terms in office. They also give him immunity from prosecution for life.The ref...

“Historic” Opposition Declaration: Will it sell in Yozgat?

TURKEY · In Brief · 01 Mar 2022 · 1 response

Turkey’s six leading opposition parties sans pro-Kurdish Rights HDP gathered in a room to sign a Declaration for Democracy (the Protocol), with the lieutenants reading passages from the 19 page document (link to Turkish version is here). First, I classify the promises in three categories:Those re...

Signs of monetary and fiscal expansion at last

CHINA · Report · 28 Feb 2022

Because of the long Chinese New Year holiday, the statistics bureau only announced price, financial and PMI data in February. Producer prices grew more slowly. PPI rose 9.1% y/y, down another 1.2 pps from December. The ex-factory price index of industrial goods rose 8.85% y/y, while CPI growth a...

Bracing for change, P.S.

PHILIPPINES · In Brief · 28 Feb 2022

When we issued our Forecast report on February 22, we had not expected that the risk we warned about that would be “disruptive to growth everywhere,” i.e., a war in Ukraine, would happen just two days later. The still unfolding event, with its immediate outsized impact on global commodity prices,...

The fifth day of war: the front has stabilized

UKRAINE · In Brief · 28 Feb 2022

The expected offensive of Belorussian army so far did not come to reality. Ukrainian army destroyed two more big groups of Russian forces that tried to take Kyiv into circle. But overall it looks like the fights have eased by now and the front has stabilized. If Russians do not bring more fresh b...

The BoI prepares markets for a tightening cycle

ISRAEL · In Brief · 27 Feb 2022

The BoI is clearly signaling for an imminent hike Rates remained stable last week, but the FG was revised significantly to suggest tightening “in the coming months”. This more hawkish bias is due to both higher-than-expected inflation in December and January and very robust growth numbers. The la...

Speaking of unstable equilibria

TURKEY · Report · 27 Feb 2022

The Turkish media is mesmerized by the heartbreaking scenes of war in Ukraine, which means domestic politics has been relatively quiet during the week. President Erdogan, too, seems to have grasped that the Russia-Ukraine War could deal a big blow to the already shaky New Economic Model. Indee...

The 4th day of the war: UN reported 368 thousand refugees from Ukraine so far

HUNGARY · In Brief · 27 Feb 2022

These people have fled mainly to Poland, Hungary, Romania, Slovakia and Moldova. Hungary's share is 62k refugees cumulatively today.Receiving refugees near the border is starting to cost government money, but the costs are very substantially lower than one would think on the basis of arrival numb...

Rapid growth, high inflation

HUNGARY · Report · 23 Feb 2022

This month’s story is about the substantial upside surprises in the latest GDP and inflation reports. These need to be looked at in the light of the upcoming election, as the Fidesz government is aiming to enjoy the positive public mood created by its heavily procyclical fiscal and income policie...

Ukraine crisis is a gas opportunity for Qatar, a diplomatic challenge for the UAE and a spur for OPEC+ tapering

GULF COUNTRIES · Report · 22 Feb 2022 · 1 response

* OPEC+ is more likely to boost volumes, particularly in May, when higher baselines come into effect for UAE, Saudi and Kuwait. * Qatar has a huge opportunity to sign long-term LNG contracts on beneficial terms. Its North Field expansion will deliver more gas than Nord Stream 2. * The UAE faces...

Politics: AMLO’s continuing missteps over “Gray house,” his worst political crisis to date

MEXICO · Report · 22 Feb 2022

The scandal that first broke in late January over a luxury Houston home rented by the son and daughter-in-law of President Andrés Manuel López Obrador continues to take a toll on AMLO's political credibility as bumbling attempts at explaining away the issue turn to what appear to be increasingly ...

Economics: First monetary policy decision of the year eases uncertainty amid heightened inflation

MEXICO · Report · 22 Feb 2022

The mid-month release of the National Consumer Price Index (NCPI) for January showed 12-month inflation running at 7.07% alongside a continuing and especially troubling resurgence of core inflation (6.21%) that is being powered by strong gains in the goods index (7.86%). It is obvious at this po...