Country Insights

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Richter Scale 6.5 Heads-Up
TURKEY - In Brief 26 Jun 2013
Capital Markets Board launched a sweeping probe of all brokers to see whether manipulative trades have taken place during the Gezi Park crash.  I talked to several people in the financial community and this is true. CMP even asked for private e-mails and phone records as well as bank account nrs ...

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Credit Remains Weak
BRAZIL ECONOMICS - Report 25 Jun 2013
The expansion of bank loans continues to be lethargic. Despite the decline of nearly 1.5 percentage points in the household debt service level since the July 2012, the current level remains high, sustaining the high default rate and deterring private banks from expanding credit. The only dynamism...

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Week of June 25: Political Insights
BRAZIL POLITICS - Report 25 Jun 2013
President Dilma Rousseff Meets With Governors To Discuss The Distribution Of Oil Royalties For Education, Improvements In Public Services And An Analysis Of The Protests Throughout The Country.New Demonstrations Are Expected To Take Place This Week. The New Minister Of The Federal Supreme Court, ...

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Not Exports, But Inflows
CHINA - Report 25 Jun 2013
Executive Summary Defying expectations, export growth soared 18% in Q1, instead of the anticipated 10%. Yet a month later, those numbers had plunged, with exports rising just 1% in May. Many analysts now think the big uptick was in fact the result of a disguised money inflow, attracted by s...

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Alert: Currency Risk Ahead
UKRAINE - Forecast 25 Jun 2013
Executive Summary Ukraine is facing a new challenge: QE3 tapering. The end of the cheap money era will change a lot for the economy.Over the past year, only the abundant international liquidity has propped up the hryvnia and, by extension, economic growth.The outflow of money from emerging market...

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Alevi’s Death Infuriates Gezi Parki People
TURKEY - In Brief 25 Jun 2013
Strong signs that AKP is preparing reform packages for Alevites and Kurds. Budget aid will be provided to Alevite temples (Cemevi) and pastors. For Kurds, Kurdish language education will be permitted in private schools, with a voucher type of system. Will the minorities settle for that little?  I...

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Brazil and the Changes in the External Scenario
BRAZIL ECONOMICS - Report 24 Jun 2013
Since the signal sent by Chairman Bernanke at the press conference following the FOMC meeting in May, that the Fed's program of purchasing US$ 85 billion in assets per month would probably be tapered back in the second half this year, the global markets have been trying to adjust to the new reali...

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CBT Makes its Choice
TURKEY - In Brief 24 Jun 2013
CBT signaled to the market that it intends to deal with the pressures on the exchange rate primarily by selling F/X than by raising funding rates. Of course, this could bite them in fanny if the GEM sell-off were to last for a “few more months”.  Treasury auctions not good...Average yields up acr...

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Looking for Drivers
MEXICO - Report 24 Jun 2013
Executive SummaryFinancial markets were roiled last week as Federal Reserve Chairman Ben Bernanke and other officials spoke more explicitly about tapering off their quantitative easing – which currently consists of USD 85 billion in bond purchases each month – sometime later this year, and comple...

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Complications on the Reform Front
MEXICO - Report 24 Jun 2013
Executive SummaryThe divisions within the National Action Party (PAN) grew more intense last week as a majority of its senate members rebelled against efforts by the national leadership to impose discipline. The skirmish suggested PAN Chairman Gustavo Madero may be failing in his effort to exert ...

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The Weakening of the Real
BRAZIL ECONOMICS - Report 24 Jun 2013
Executive SummaryThe real has been depreciating. Two forces behind this movement come from the world economy. First, the United States has entered a sustained phase of growth greater than that of other industrialized countries, while emerging countries are experiencing deceleration. This is tendi...

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Costa Rica's Rate Slash
CENTRAL AMERICA - Report 24 Jun 2013
Executive SummaryAfter discovering that a data error had accidentally inflated the Monthly Index of Economic Activity, Costa Rica's Central Bank quickly cut its policy rate by a full 100 basis points, to 4%. Everyone could already see the economy slowing: first in non free trade zone activities, ...

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Nabiullina Begins Her First Day as CBR's Head; Ulyukayev Appointed Economics Minister
RUSSIA ENERGY / FINANCE - In Brief 24 Jun 2013
Today is the first day for Elvira Nabiullina as a new head of CBR. She gave a lengthy interview to Kommersant, influential business daily, on her views on monetary policy and future plans ( The main message of an interview is that Ms Nabiullina supports polic...

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Weekly Tracker: June 23-29
TURKEY - Report 23 Jun 2013
Executive SummaryWe know our readers have their hands full with bigger issues like China, Brazil and the QE exit, so to save on reading time, we summarized our baseline political scenarios in light of some FAQs:Gezi Parki and related demonstrations: 55% chance they will wind down over the summer,...

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Constitutional Chamber will hear all Electoral Impugnation Cases
VENEZUELA - In Brief 21 Jun 2013
The Constitutional Chamber of the Supreme Tribunal of Justice (TSJ), headed by Gladys Ramirez, president of TSJ, announced its decision to hear all the cases related to the impugnation of the 14 April 2013 presidential election, until now in the hands of the Electoral Chamber.Henrique Capriles we...