In today’s briefing:
- Four Important EM Elections in 2024
- Chinese Equity Markets: Wild Ride, But “Xi Briefing” Steals the Show
- CX Daily: Private Equity in China Heads for Exits Amid Three-Year Stock Slump
- Great Game – Why Biden goes soft on Iran
- Reforms to Mergers and Acquisitions Disclosure and Evaluation Requirements in Korea
- Philippines CPI Inflation 2.8% y-o-y (consensus 3.1%) in Jan-24
- Australia RBA Cash Rate Target 4.35% (consensus 4.35%) in Feb-24
- Macro Regime Indicator: Time to Embrace a New Economic Dawn?
Four Important EM Elections in 2024
- Elections in Indonesia and India are expected to maintain policy continuity in terms of the economy.
- The election outcome in South Africa is likely to result in further deterioration in governance.
- In Mexico, MORENA is predicted to retain the presidency but may not achieve its target two-thirds majority in the legislature.
Chinese Equity Markets: Wild Ride, But “Xi Briefing” Steals the Show
- Sharp Bond Yield Drop: 10- and 30-year bond yields plunged to their base targets of 2.41% and 2.61%, falling by 3.2 and 5 basis points, respectively.
- These Base Targets were set in our previous Notes on China.
- Downside Trigger: The CSI 1000 and ChiNext indices fell sharply due to “Snowball Structures” exceeding their limits, typically triggered when the index drops 20% or more.
CX Daily: Private Equity in China Heads for Exits Amid Three-Year Stock Slump
- PE / Cover Story: Private equity in China heads for exits amid three-year stock slump
Military /: China’s top legislature confirms ousted military officials violated ‘discipline and law’
PMI /: China services activity maintains growth, but at slower pace, Caixin PMI shows
Great Game – Why Biden goes soft on Iran
- Welcome to this week’s Great Game! This week we attempt to add some nuance and layers to the understanding of the US-Iran conflict while adding my two cents to the ongoing oil debate.
- Main points of the week: as predicted last week, the US retaliated quite softly against Iranian attacks and both sides seem content with the current level of escalation.
- The risk of war is over.
Reforms to Mergers and Acquisitions Disclosure and Evaluation Requirements in Korea
- On 6 February, FSC announced numerous changes to the M&A disclosure and evaluation requirements in Korea.
- These measures are aimed at strengthening investor protection benchmarking global standards. The Korean financial authorities will start to implement these changes in 3Q 2024.
- The method for calculating merger prices in M&As between non-affiliated companies will be upgraded. To guarantee fairness in merger prices, a third-party review will be mandatory.
Philippines CPI Inflation 2.8% y-o-y (consensus 3.1%) in Jan-24
- Philippines CPI inflation in January 2024 decreased by 1.1 percentage points, reaching 2.8%, which is 0.3pp below the predicted 3.1%.
- About one-third of this decrease was in the core inflation, which declined by 0.6pp.
- The core inflation rate stood at 3.8% year-on-year.
This insight is AI generated from publicly available sources.
Australia RBA Cash Rate Target 4.35% (consensus 4.35%) in Feb-24
- The RBA’s decision to hold the policy rate steady at 4.35% reflects its cautious approach in light of moderating inflation, particularly in the goods sector, against persistent services inflation and high domestic cost pressures.
- Economic outlook uncertainties, including global risks, domestic demand dynamics, and labour market tightness, influence the RBA’s policy deliberations, with a continued focus on returning inflation to the target range in a balanced and data-driven manner.
- The RBA emphasizes the priority of inflation targeting within its mandate, indicating that while recent trends show inflation easing, the potential for further interest rate hikes persists, contingent on incoming data and a rigorous assessment of evolving risks.
This insight is AI generated from publicly available sources.
Macro Regime Indicator: Time to Embrace a New Economic Dawn?
- The recent performance of the US economy prompts a reassessment of long-held market sentiments.
- As we witness an intersection of sturdy growth, moderating inflation, and evolving liquidity dynamics, investors and policymakers alike stand at a crossroads.
- This month’s ‘Macro Regime Indicator’ questions the endurance of the current (US) economic strength and its implications for inflation and asset allocation.
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