- Canada – lower interest rates, lower CAD;
- Denmark – a leaf out of the Swiss book; European Union – full steam ahead with QE;
- Portugal – paying off IMF debt early; Saudi Arabia — nervousness about the royal succession;
- Yemen – chaos in a failed state.
CHINA: The widely advertised slowdown was not exactly big news when details were announced. The government will likely not go beyond minor efforts to stimulate activity. The oil price collapse is a mixed blessing for the PRC. The yuan will be vulnerable on the downside, but the authorities will seek to keep the unit fairly stable.
MACAU: Ending a golden age of seemingly irreversible growth, gaming revenues fell last year and there is, for now, no sign of an early turnaround. Efforts to diversify the economy away from gaming may pay off eventually, but there are obstacles and in the near term the shift hits ROI numbers.
PERU: The government is planning a new round of stimulatory measures to crank up growth, but while the country boasts one of the better-performing emerging economies, the minerals boom is clearly over. Part of the new strategy is to streamline environmental regulations to clear the way for more oil, gas and mining projects.
POLAND: The economy remains one of the better-performing in the EU. After the blow from the sanctions and economic troubles in Russia and the crash of the ruble it is now being hit by the surge of the CHF, but this, too, is a problem that the authorities will deal with fairly effectively.
RUSSIA: The government has presented Pres. Putin with a USD 21-billion plan to address the economic crisis the country finds itself in. While it remains unlikely for now that Russia will default on debts to Western creditors, a way out of its problems is not in sight.
SOUTH AFRICA: With inflation slowing down sharply, the CB will not hike interest rates this month, although the rand remains vulnerable in the FX markets. Growing electricity shortages will need to be addressed. In the political arena, the risks to the ANC’s pre-eminence are growing.
SWITZERLAND: Global financial markets were left reeling last Thursday when the Central Bank unexpectedly abandoned its exchange rate ceiling against the euro, leaving banks across the globe with big losses and hitting FX brokers hard. The fallout will be felt for a long time to come, not just in Switzerland but around the world.
VENEZUELA: Sidestepping, yet again, the need for an official currency devaluation, the government has conjured up a new FX system for non-essential imports while preserving the rate of 6.3 bolivars to the dollar for food and medicine. The regime has now definitely stepped back from plans to sell Citgo to raise money, hoping instead that the company can raise USD 2.5 billion in debt.
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