Country Insights

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Expect CBR to stay on hold tomorrow
RUSSIA ENERGY / FINANCE - In Brief 17 Mar 2016
Current economic situation presents dilemma in terms of Russian monetary policy. Oil rallied in the last month and recovered its up-to-date 2016 losses. Oil rally supported RUB which trades at 70 RUB compared to 80+ a month ago. Another factor is that recent inflation surprised to the downside. F...

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Lula: The last move against the impeachment
BRAZIL POLITICS - Report 16 Mar 2016
The appointment of former President Lula to the Civil House Ministry (the equivalent of Chief of Staff) is a risky move that gives us an idea of the government’s current desperation. In appointing Lula, President Dilma Rousseff is, in practice, abdicating her government. Lula will try to resta...

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More Complication for Fidesz
HUNGARY - Report 16 Mar 2016
Detailed GDP data for Q4 confirms the preliminary 2.9% growth for the whole of 2015. Excluding agriculture, growth even accelerated slightly from 2014. On the supply side, growth was driven by manufacturing, mainly the car industry, and some service sectors. On the demand side, it was propelled b...

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Turkish politics: It’s a totally new ball game
TURKEY - In Brief 16 Mar 2016
I’m preparing to write one of the most difficult Weeklies of this year and thought it important to share some of my initial views with my readers, because the three developments I’ll mention may have an important influence on Turkey’s risk premium. Since they act in opposite directions, I leave i...

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The Chances of Impeachment Have Increased
BRAZIL ECONOMICS - Report 14 Mar 2016
Executive Summary In recent days the real has appreciated, the CDS quotations have fallen, stock prices have risen and longer term interest rates have declined. These were not movements prompted by signs the Rousseff administration was “coming to its senses”, changing its economic policy bearing...

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Week of March 14
BRAZIL POLITICS - Report 14 Mar 2016
The government starts the week feeling the pressure of the success of the demonstrations calling for the impeachment of Dilma Rousseff, which brought around 4 million people to the streets, as well as the PMDB party convention. After the STF decision on the rules for the impeachment proceedings, ...

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NFPS deficit for 2015 right on target (2.4% of GDP). Central Bank says different
DOMINICAN REPUBLIC - In Brief 14 Mar 2016
The Ministry of Finance has finally released the figures of fiscal year 2015. The data set the NFPS deficit at DOP 72.7 bn. This is equivalent to 2.38% of GDP, right at the level that was set as a target for 2015 by the budget law. Our estimates pointed to a slightly higher deficit due to weak re...

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Household Consumption Continues to Fall
BRAZIL ECONOMICS - Report 14 Mar 2016
In November last year there was some optimism about possible recovery of real retail sales, but it soon became evident that the growth that month came from the Black Friday promotions, repeating the same behavior that had occurred in November 2014. However, the optimism was not easily abandoned, ...

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Tumultuous Campaign
PERU - Report 14 Mar 2016
After the turbulent weeks surrounding the campaign for the April 10th presidential election, the electoral tribunal at last decided to disqualify candidates Cesar Acuña and Julio Guzman, citing irregularities in both candidacies. It’s not yet clear which candidates will benefit most from their...

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Turkey entering a vicious cycle of crack-downs and terror
TURKEY - In Brief 14 Mar 2016
Hours after we e-mailed our Weekly Tracker, where we warned of PKK’s intentions to wreak havoc in Western cities, a BMW car laden with explosives detonated in the busy Kizilay Square of Ankara, killing 34 and injuring 125 innocent civilians. 17 of the injured are in critical condition, meaning th...

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Weekly Tracker: March 13-19
TURKEY - Report 13 Mar 2016
Davutoglu’s provocative refugee proposal to EU is not acceptable in its initial form, meaning that some kind of bargaining will have to take place. Given that there is no Plan B for EU, and no other direction to turn for Ankara, we bet on some type of a compromise. Russia might propose a federa...

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GDP Results in 4Q
COLOMBIA - Report 11 Mar 2016
Colombian GDP expanded by 3.3% in 4Q 2015; this allowed economic activity to expand by 3.1% for the year as a whole, pretty much in line with the market’s expectations (3%). While this result is still below potential GDP growth, it was among the best in the region, above Mexico, Brazil and Chile....

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The Grand Chess Game
RUSSIA / FSU POLITICS - Report 11 Mar 2016
The Russian leadership continues to use Syria as a bargaining chip in the country’s relations with the West. Although raising the stakes could be dangerous for Russia, so far the country has been largely successful in leveraging its military presence in the country and close relations with Syria ...

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Bear Story
CHILE - Report 09 Mar 2016
On February 29, the Minister of Finance announced a fiscal adjustment package of 0.3% of GDP. When Rodrigo Valdés was appointed Minister of Finance, he promised to gradually reduce the structural deficit. The 2016 budget was designed under the requirement that the structural balance be reduced fr...

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Economics: Pass-through Effect Looms
MEXICO - Report 09 Mar 2016
Peso depreciation has been a source of considerable concern in virtually all spheres of Mexican society. One of the main reasons for that sense of unease is the extent to which we are seeing a resurgence of inflation pressures. Just two weeks after Banco de México and the Ministry of Finance ann...