FMI’s analyses of today’s June Employment and May International Trade reports.
FMI’s review of December U.S. Dollar and Trade Prices results.
FMI’s end-of-the-month materials for U.S. dollar analysis
Key points: - If Trump fulfills plans to deport 11 million illegal aliens, launch trade war with China and Mexico, and perhaps withdraw from NAFTA, it could spark serious recession - But failure to take action could lead supporter to regard him as another phony - Stock market and most economists are betting Trump will not fulfill these plans - His big tax cuts are seen as bullish: stimulus to economy from tax cuts will more than offset drag caused by rise in interest rates and the dollar - Economists still a bit higher growth under Trump than Clinton in 2018 (2.3% vs. 2.0%) - Dollar index vis-à-vis all trading partners has spiked to 15-year high, including weakening of yen back to ¥110/$ - Reason is widening gap between US and Japanese interest rates
Key points included in this part three of the report are, - Hatch says “progress” in talks with White House on 12 years for biologics, but he said something similar in the spring and it went nowhere - Hatch claims some TPP countries will to go to 12, but informed sources call this “unrealistic” - Not clear whether Obama Administration is even asking anyone for 12 years - Number two and three GOP leaders in Senate (Cornyn and Thune) seem unaware of any WH-Hatch talks, and say concessions on tobacco also needed; Thune says “odds are not good” - Hatch says, even with biologics solution, hard to get ratification - How could Froman ask other countries to make new concessions if he cannot reassure them it will lead to ratification?
China's current leadership transition is an issue. Economic growth is no longer the top priority. Therapy for the real-estate tumour might be painful. New leadership is serious dealing with corruption.
CEE countries in particular are underinvesting as they were hard hit by the 2008 crisis and FDI inflows dwindled. This is often due to government indebtedness levels; banks’ unwillingness to take on risks. However, in CEE quality of regulation and transparency have increased due to the need to attract private sector investment in the sector (EBRD Transition Report, 2015-2016). In 2015, development of PPP legislation, procurement and anti-corruption; important for attracting funds into infrastructure projects.
FMI’s Commentary on the Brexit vote and its economic consequences, or lack thereof