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Country Insights

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Global Opposition with no Opposition at Home
RUSSIA / FSU POLITICS - Report 07 Aug 2015
Hosting a BRICS summit and a summit of the Shanghai Cooperation Operation allowed Russia to present both organizations as an alternative to the Western-led international institutions. Although other summit participants were reluctant to support Russia’s anti-Western rhetoric, the meetings demonst...

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External Headwinds
PHILIPPINES - Forecast 07 Aug 2015
External risks have increased since our last report.Our outlook, which sees GDP growth at 6.1% in 2015 and 6.5% in 2016, is one of guarded optimism that considers robust domestic demand growth alongside softer export demand, increasing foreign investor caution, more volatile global financial mark...

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On Reelections, Rabbits and Ratings
TURKEY - Report 06 Aug 2015
Markets seem focused on three issues/questions at the moment: What is the latest on the coalition vs. reelection odds, given the cacophony of announcements coming out of Ankara? What should we exactly make out of the CBRT Governor Basci’s latest announcement of simplifying the monetar...

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Dilma Rousseff Government
BRAZIL POLITICS - Report 06 Aug 2015
Sources from the judicial sector claim that, in the coming weeks, the General Prosecutor of the Republic (PGR) will accuse the president of the House, Eduardo Cunha (PMDB-RJ) in the Federal Supreme Court (STF), on the basis of involvement in acts of corruption discovered in the Lava Jato Operation.

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Poverty Rises as Economy Slows
MEXICO - Report 05 Aug 2015
The news isn’t all bad: Consumer confidence has rebounded, the stores are reporting increased sales, and industry continues to hire. But the economy continues to slow, recent indicators show. And on balance, the latest news has been negative. The monthly GDP proxy (IGAE) showed activity slippi...

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July CPI increased 15.6% y-o-y boosted by regulated services and RUB devaluation
RUSSIA ENERGY / FINANCE - In Brief 04 Aug 2015
Annual inflation increased from 15.3% y-o-y (+0.2% m-o-m) in June to 15.6% y-o-y (+0.8% m-o-m) in July. Food deflation continued with food prices declining 0.3% m-o-m compared to -0.4% m-o-m in June. Main reason for increase in inflation is traditional increase in regulated prices and tariffs. Si...

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The arrest of José Dirceu and its consequences
BRAZIL POLITICS - Report 03 Aug 2015
The arrest of José Dirceu in the Lava Jato Operation will increase pressure on the PT even further.Especially taking in consideration that the incident occurred at the same time as Renato Duque, former Petrobras director, is negotiating a plea bargain deal. The combination of these two facts m...

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Two Milestones Reached
VENEZUELA - In Brief 03 Aug 2015
Last week Venezuela cashed-in $6.5 billion: $1.5 billion from the sale of accounts receivable from Jamaica and $5.0 billion from China. The sale of accounts receivable from Jamaica ($3.2 billion face value) took place last Tuesday 08/28 and brought in $1.5 billion (54% discount). Pdvsa sold $1.2 ...

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Week of August 3
BRAZIL POLITICS - Report 03 Aug 2015
Expectations with the return of Congressional activity.President Dilma Rousseff meets with party leaders of the governing coalition this Monday (3) to improve the climate between the Executive and Legislative.She will appear in the PT’s radio and TV program on Thursday.Leaders have until August 6...

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Sharp Deceleration of Credit
BRAZIL ECONOMICS - Report 03 Aug 2015
One of the (many) reasons the current recession will be longer than the one in 2008-2009 is the behavior of credit. Growth of the credit stock started to slow in early 2011, and has been stagnant in 2015, with lending by both private and public banks decelerating. The flow of new loans to both bu...

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The Monetary Policy Dilemmas
BRAZIL ECONOMICS - Report 03 Aug 2015
Last week the COPOM ended the tightening cycle with one more hike of 50 basis points, taking the SELIC rate to 14.25%, where according to the communiqué it will remain “for a sufficiently prolonged period.” But how long might that be? On the one hand, the Central Bank wants to bring inflation dow...

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Inflation Eases, But Best Is Likely Over
TURKEY - Report 03 Aug 2015
Consumer price inflation moved little in July (0.1%), m/m, broadly in line with the consensus. This led to another easing in the 12-month rate to 6.8%, from 7.2% in June. Food price inflation stayed broadly unchanged at some 9.3%, y/y, while underlying inflation dynamics finally showed some moder...

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CBR cut key rate by 50 b.p., to 11%, no guidance on next moves
RUSSIA ENERGY / FINANCE - In Brief 31 Jul 2015
CBR’s of Board of Directors decided to cut key rate by 50 b.p., to 11%, as it was generally expected by us and different surveys. But market reaction to the news was relatively strong. After the publications of press-release RUB lost some about 0.8% to major currencies. It seems that were some ex...

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Desperate For A Coalition
TURKEY - Forecast 31 Jul 2015
Executive Summary With coalition talks proceeding very slowly, the ISIS/PKK threats on the rise and emerging markets under pressure, macro visibility has never been this poor. Our political baseline is reelections now (60% probability), even though the political landscape is unlikely to change mu...

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Perpetual Election Mode
VENEZUELA - Report 31 Jul 2015
Executive Summary We’re all focused on the December 6 National Assembly elections, but voters will also choose governors in 2016, mayors in 2017, and a president in 2018. And there just might be a presidential recall referendum after April of next year. This means that the government will rema...