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On spurious correlations, horses and carts
TURKEY · Report · 19 Jan 2023

As expected, the MPC kept the policy rate unchanged at 9% today, and began attributing the beginnings of a largely base effect-driven decline in inflation to its so-called “liraization” policies. The statement (link here) contained quite a few modifications compared to the last one, which we brie...

Minister Haddad returned to Brazil after three days of meetings in Davos, Lula gave an interview to Globo News yesterday, and Minister Marinho said that the minimum wage will remain the same until at least May
BRAZIL POLITICS · Report · 19 Jan 2023

In one of his last meetings at the World Economic Forum, Haddad said that Brazil is getting closer to joining the OECD. But he stated that Brazil's accession process to the organization will still be reviewed. In an interview with Globo News, Lula criticized the autonomy of the Central Bank (BC) ...

Russia: a brief market watch
RUSSIA ECONOMICS · In Brief · 19 Jan 2023

The main event on the FX market at the beginning of the year was the decision of the Finance Ministry to start selling CNY from the National Wealth Fund, given that the budget revenues from the energy sector are likely to be lower than planned. The latter pushed the ruble up, and the exchange rat...

Ukrainian Interior Minister killed in chopper crash
RUSSIA / FSU POLITICS · In Brief · 18 Jan 2023

On January 17 a helicopter carrying 14 officials crashed and all died. The crash appears to be unrelated to the war. The helicopter was sold to Ukraine by Super Puma from a range that was withdrawn years ago due to safety concerns. Russia has not claimed to have destroyed the helicopter. The Inte...

Russian macro: Contrary to a tradition, the 2023 budget is unlikely to be amended if the Brent/Urals spread remains wide
RUSSIA ECONOMICS · Report · 18 Jan 2023

At the very end of December, the Finance Ministry announced that federal budget expenditures exceeded R31.1 trln rubles in 2022, which meant that, after a series of amendments, actual spending last year exceeded the initially targeted amount by nearly one-third. It was already a tradition that th...

For your information: Erdogan declares early election date as 14 May
TURKEY · In Brief · 18 Jan 2023

To all of our audience, As we have predicted in our recent Weekly, Erdogan called for early elections on 14 May. Nevertheless, this is an announcement that deserves a Market Brief. Unfortunately, yours truly had to spend the day outside of his office for pre-arranged consultations with his Turkis...

Russian Defense Minister visits the front
RUSSIA / FSU POLITICS · In Brief · 18 Jan 2023

On January 18 Sergei Shoigu visited Russian Forces in Ukraine to award medals. This was Shoigu's first visit to Ukraine since General Gerasimov was placed in charge of the campaign/ Russian TV showed a video of Shoigu addressing troops. He emphasized that it is vital to make sure logistics work w...

President Lula sanctioned the 2023 Federal Budget, he will hold an event today to discuss the minimum wage policy, and he will meet with the leaders of the three branches of government to ease tensions after the January 8 attacks
BRAZIL POLITICS · Report · 18 Jan 2023

President Lula vetoed a total of R$ 4.2 billion, most of which would go to the National Fund for Scientific and Technological Development. President Lula will hold an event at 11 a.m. at the Planalto Palace today at which an interministerial ordinance will be signed for the creation of a working ...

Ukraine says 40 civilians killed by a Russian missile
RUSSIA / FSU POLITICS · In Brief · 17 Jan 2023

The Ukraine War is intensifying. On January 16 a missile strike on an apartment block in Dnipro claimed civilian lives. Ukraine says up to 25 people are still trapped beneath the rubble. Zelensky said this was a war crime as it targeted civilians. The EU denounced the attack. The UN Secretary Gen...

Boluarte’s struggle for legitimacy; protests in the south hit the economy
PERU · Report · 17 Jan 2023

In this report, we focus on the repercussions of the recent public protests for the political landscape and the economy. We start by asking ourselves how new President Dina Boluarte can gain legitimacy in order to remain in power. While we argue that the government has all the resources necessary...

Politics: AMLO begins the year with a major setback as the presidential succession heats up
MEXICO · Report · 17 Jan 2023

2023 is shaping up to be an especially crucial year for President López Obrador’s Fourth Transformation (4T) project, and he suffered a major, totally unexpected setback just as the year was getting underway. His preferred candidate to become Chief Justice of the Supreme Court January 2 saw her c...

It’s all about oil
VENEZUELA · Report · 17 Jan 2023

Inflation slowed in 2022 for the fourth consecutive year, though by far less than the government had hoped. Inflation exceeded the government’s double-digit annual inflation target last August. Still, the year closed with an estimated inflation of 251 percent, which is far less than the 681 perce...

Current account narrows in 4Q22 but still remains very strong
RUSSIA ECONOMICS · In Brief · 17 Jan 2023

According to the CBR preliminary estimate, Russia’s current account reached $227.4bn in 2022. In 4Q22, it narrowed to $31.4bn from $48.0bn in 3Q22 and a record high of $78.5bn in 2Q22. The trade surplus reached $282.3bn in 2022 and also narrowed in 4Q22 (to $45.9bn, i.e., roughly one-half of its ...

President Lula meets with ministers to discuss the minimum wage, Minister Haddad to have meetings during the World Economic Forum in Davos, and Minister Silveira meets with representatives of the energy sector to discuss attacks on transmission towers
BRAZIL POLITICS · Report · 17 Jan 2023

After the meeting with ministers, President Lula will have a meeting with the president of the Single Center of the Workers (CUT). The agenda should focus on the minimum wage. During the electoral campaign, Lula promised to implement a policy of increasing the minimum wage according to the intere...

The First Package: “Much Ado About Nothing”.
BRAZIL ECONOMICS · Report · 17 Jan 2023

Last week, measures were announced aiming to reduce the primary deficit in 2023 (summarized in Table 1). The largest part of the adjustment falls on the revenue side, based on revenues’ reestimation and increase, along with some temporary spending cuts. However, given the nature of Brazil’s fisca...