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Truckers’ strike
BRAZIL POLITICS · Report · 24 May 2018

The government is going through a very delicate moment, perhaps one of the worst since Michel Temer became president. Even during the explosion of the JBS crisis, the government at least had a solid majority in Congress. Today, the government’s dealings with the governing coalition are precario...

Muddle-through, it is
TURKEY · In Brief · 24 May 2018

I am writing this note to augment Dr. Murat Ucer’s commentary on CBRT action, titled “CBRT Finally Acts, Avoids the Worst – For Now”.Our audience should recall, that Murat and I have now focused our combined energies on forecasting two variables: Can Turkey survive the period between now and Marc...

Nobody won
VENEZUELA · In Brief · 23 May 2018

Maduro’s victory on 20 May didn’t convince anyone, neither at home nor abroad. New U.S. sanctions and Lima Group pressures limit further the government’s room to maneuver. It’s too soon to tell whether Maduro strengthened his grip on chavismo after his 20 May victory or whether elections lead to ...

Reaching the inflexion point?
PERU · Report · 23 May 2018

President Martín Vizcarra’s cabinet presented its plan to Congress, and won the body’s necessary vote of confidence, 94-19. The leftist parties dissented, but Keiko Fujimori’s Fuerza Popular party, which controls 50% of Congress, responded positively. Though some interpreted this as a tacit agree...

​CBRT Finally Acts, Avoids the Worst – For Now
TURKEY · In Brief · 23 May 2018

At an emergency interim meeting held this evening in Ankara, the CBRT’s Monetary Policy Committee raised the Late Liquidity Window (LLW) rate – which has been the de facto policy rate -- by 300 bps to 16.5%, from 13.5%, leaving all other rates unchanged (Graph 1). In its brief statement, the Bank...

Ideology and somnolence
COLOMBIA · Report · 23 May 2018

Our forecast for the Sunday, May 27, first-round presidential election is that the most likely pair to advance to the second round is Duque-Petro, to which we assign a probability of 55%. The second most likely is Duque-Vargas (35% probability), and the third is Duque-Fajardo (10% probability). ...

LAST MINUTE: CBRT capitulates, hikes rates
TURKEY · In Brief · 23 May 2018

CBRT MPC just finished an extrordinary meeting, announcing a 300 basis point hike to the ceiling of the Late Liquidity Windom financing rate. Our team will issue a detailed post-mortem after consultations, but needless to say this action validates to some extent the muddle through scenario we emp...

The first half of the game is almost over
CHILE · Report · 23 May 2018

The Monthly Index of Economic Activity delivered some good news in March – even though its growth was strongly favored by the low comparison base in mining. And business confidence was positive for the fourth consecutive month. Industrial production continued to disappoint. Though retail sales su...

Monetary Council meeting: Laissez faire, laissez passer
HUNGARY · In Brief · 22 May 2018

Whatever central bank action the most recent depreciation of the forint vis-a-vis the euro could require, the Monetary Council did or said almost exactly nothing at today's rate-setting meeting. The Council essentially said that both its interest rates and its other tools are just all right as th...

Polls reveal a record number of undecided, blank and null votes and other weekly topics
BRAZIL POLITICS · Report · 21 May 2018

Three new polls on the presidential succession may be released tomorrow, May 22. Also on Tuesday, PT governors discuss the presidential succession with Party President Gleisi Hoffmann. Tomorrow, the MDB presents a preliminary version of the document "Encontro com o futuro" (“A Date with the Futu...

Politics: How one less candidate affects the race
MEXICO · Report · 21 May 2018

With her campaign deeply in debt and lacking any hope of attracting major funding sources, Margarita Zavala announced May 16 that she was bowing out of the presidential race and leaving her supporters to follow their conscience in deciding how to vote this summer. That decision suddenly left an e...

Economics: Data load for plans to tackle poverty
MEXICO · Report · 21 May 2018

According to Coneval’s latest evaluation of social policy, multidimensional poverty results have been decidedly mixed over the past decade. The number of people living in poverty has risen by almost 6 million in the past decade in the wake of the 2008 global financial crisis and Mexico’s 2009 rec...

Accelerating housing rental prices support higher inflation
ISRAEL · Report · 21 May 2018

Housing rental prices have accelerated and pose a threat to higher inflation. We expect inflation to reach 1.0% NTM assuming a further housing rental price increase, a slightly weaker shekel and stable energy prices. Despite the expectation that year-over-year inflation will reach 1.3% in July of...

Much ado about nothing
BRAZIL ECONOMICS · Report · 21 May 2018

Until recently the low interest rates in the United States and other mature countries – and the other side of the same coin, the low risk aversion – were causing demand for the assets of emerging countries to climb, strengthening their currencies and reducing the quotations of their CDS. However,...

How will all this end? A first stab
TURKEY · Report · 20 May 2018

Last week’s developments compelled us to share our thoughts and views on Turkey’s rapidly changing political and economic outlook. As a result, we have opted for a different format in this Weekly Trends, in the first section of which, we ventured to construct a tentative baseline scenario thro...