Country Insights

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Who gets to make money and for how long?
CHINA FINANCIAL - Report 18 Nov 2015
Last Thursday China Shanshui Cement Group announced its default on RMB 2 billion of loans. As of this writing it isn’t clear whether or not lenders will be forced to absorb losses but I suspect that the default will be resolved by shareholders. For much of this year credit spreads have c...

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A Balanced Presidential Debate
ARGENTINA - In Brief 16 Nov 2015
Yesterday’s presidential debate between Scioli and Macri ended up being relatively balanced, even though online polls indicate a favorable bias in favor of the opposition candidate. The debate is therefore unlikely to have generated a land-slide shift in voter’s preferences, leaving the impressio...

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The MNB Is Active Again
HUNGARY - Report 16 Nov 2015
GDP growth fell to 2.2% y/y/sda in Q3, continuing its slide. This means downward convergence to the sluggishness of the Eurozone, and to far below the growth rates of other EU CEE members. GDP growth came in even below market expectations. But we still expect 2.4% growth for full year 2015. A ...

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Week of November 16
BRAZIL POLITICS - Report 16 Nov 2015
The government will face a big challenge this week with votes on the presidential vetoes in Congress. The 2016 LDO is also on the agenda, which sets the surplus goal at R$ 43.8 billion. This is an important week for Rep. Eduardo Cunha: The rapporteur of the case against him in the Ethics Council ...

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Where is Consumption Headed
BRAZIL ECONOMICS - Report 16 Nov 2015
Real retail sales declined again in September, meaning three straight quarters of contracting household consumption (Graph 1). More important than this, however, is the absence of any signs of reversal of this behavior.

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Weekly Tracker: November 15-21
TURKEY - Report 15 Nov 2015
The new cabinet is expected to be announced this week, when we shall get to see who’ll be in charge of the economy and/or what the new division of labor will be in the management of the economy. Yet, it will probably take a lot longer to get a clear picture on the more important issues like the e...

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Wrong Time for Maneuvers
RUSSIA ENERGY / FINANCE - Report 13 Nov 2015
This week the State Duma will review the budget for 2016 submitted by the government in late October. The project assumes a small nominal increase in receipts compared to 2015 (+487 bln RUB; +3.7%) and similar increase in expenditures (+681 bln RUB; +4.2%). The deficit is said to stay at 3% GDP a...

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A Political Earthquake in the Making
ARGENTINA - Forecast 13 Nov 2015
An unexpected political earthquake shook the country on October 25. First, Daniel Scioli beat Mauricio Macri by less than 3 percentage points when most opinion polls had anticipated a gap of nearly 10 percentage points between Scioli and Macri, the new frontrunner. Second but not least, María Eug...

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Economics: Prem. 3Q GDP Tells a Familiar Story
MEXICO - Report 12 Nov 2015
The Estimate of Quarterly GDP for the third quarter, published recently by the National Statistics Office (Inegi), showed 2.4% growth compared to the same quarter a year earlier. The expansion was driven primarily by a 4.6% increase in primary activities and 2.9% growth in those of the tertiary s...

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Politics: A Tale of Four State Elections (III)
MEXICO - Report 12 Nov 2015
With this issue we conclude our initial analysis of the states that will hold gubernatorial elections in 2016. This week we offer a preview of four states that have had at least two experiences with alternation in power: Chihuahua, Aguascalientes, Tlaxcala and Zacatecas. Following seven decades i...

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October CPI data: no surprise, firmly on upward trend on excluding-fuel-prices basis
HUNGARY - In Brief 10 Nov 2015
Believe it or not, we finally scored on a monthly CPI forecast, expecting exactly the actual 0.2% mom, 0.1% yoy for October. The yoy rate was up from September's -0.4%. Fuel prices, which moved around the overall CPI quite erratically in recent months, fell further by 1.7% mom, but in yoy terms t...

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A New War to Fight
RUSSIA / FSU POLITICS - Report 09 Nov 2015
Russia’s engagement in Syria gives it a first-mover advantage in terms of global political bargaining. However, in order to use this chip, Moscow needs a successful outcome from the operation because leaving Syria without a success could damage the leadership’s reputation. That puts the Kremlin i...

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Student protests in South Africa: A middle class uprising?
SOUTH AFRICA - Report 09 Nov 2015
A number of factors are slowly but inextricably re-shaping the political-economy landscape of South Africa in ways that could significantly erode the dominance of the African National Congress (ANC) ruling party and fundamentally shift political dynamics in next year’s municipal elections. Such f...

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Week of November 9
BRAZIL POLITICS - Report 09 Nov 2015
The truck drivers’ strike is worrying the government this week. The House will try to vote on the repatriation bill again. The Joint Budget Committee may vote on changes to the 2015 fiscal target. Demonstrations against the government are planned for next Sunday but they are not expected to recei...

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Inflation – No Reason for Optimism
BRAZIL ECONOMICS - Report 09 Nov 2015
In October the 12-month IPCA rose to almost 10%, a result not only explained by the substantial adjustment of some key administered prices. There are clear signs that the effects of the weaker exchange rate are starting to appear in consumer prices, and even with the deepening recession and risin...