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Trump could surprise on infrastructure

Trump could surprise on infrastructure

20 Jul 2016

In a report on the policies of Republican presidential candidate Donald Trump, Meghnad Desai, chairman of the OMFIF Advisory Board, asks whether he could surprise observers making dire predictions about his potential move into the White House, including in respect of infrastructure investment.

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  • Bullard ‘new narrative’ shift at Fed

    Bullard 'new narrative' shift at Fed

    18 Jul 2016

    The monetary about-face by James Bullard, the hawk-turned-dove St. Louis Federal Reserve Bank president, has wide implications for international central bankers. Bullard’s ‘new narrative’, elaborated at an OMFIF meeting in St. Louis, could shake up how the Fed views the world.

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  • ECB easing 'four years behind the curve'

    ECB easing 'four years behind the curve'

    14 Jul 2016

    The European Central Bank is ‘four years behind the curve’ in easing monetary policy, with its balance sheet still at 2012 levels, while eventual Fed tightening will widen policy divergence, according to statements at OMFIF’s US Main Meeting at Washington university, St Louis.

    Failure to ‘harness forces of nationalism’

    Failure to 'harness nationalist forces'

    13 Jul 2016

    The result of the UK referendum on European Union membership stems from the failure of Britain’s two major parties to understand, let alone harness, the forces of nationalism, says Meghnad Desai, chairman of the OMFIF Advisory Board, in an OMFIF Commentary.

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  • UK travails may be ‘relatively harmless’

    UK travails may be ‘relatively harmless’

    11 Jul 2016

    Compared with tests awaiting the rest of the EU – from the repercussions of Italy's bank rescue plan to polls in Italy, Austria, the Netherlands, France and Germany – the UK’s post-Brexit travails may prove relatively harmless, says David Marsh.

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    Commentary

    • Shaking faith in democracy

      by Ben Shenglin in Beijing | Thu 21 Jul 2016

      The UK departure from the EU has been guided by the conventional wisdom that democracy, ultimately expressed through a referendum, is a good and effective system for governance. Britain is held out as the pioneer and standard-bearer of western democracy; the EU vote was supposed to show how a democratic system functions. However, ‘Brexit’ is likely to wreak irreversible damage to Britain and the world. So, as an important by-product, the outcome will shake popular faith in the ‘sacred’ system of democracy.

      MARKET: Europe

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    • Britain’s timetable for regaining control

      by John Redwood | Wed 20 Jul 2016

      European Union leaders are urging Prime Minister Theresa May to speed up the UK’s plans for exit. I agree. It is in the EU and UK's interest to sort this out quickly. It need not be a difficult negotiation. Many people seem to think that the UK is a weak petitioner, and that we have to be very careful in case we are expelled from the so-called single market. Many observers talk of bartering free movement and payments against some kind of maintained membership of the EU market. This is misinformation. The facts are very different.

      MARKET: Europe

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    • New global Atlantic in the making

      by John Kornblum in Berlin | Tue 19 Jul 2016

      British exit from the European Union provides Europe with what it needs most: a good shaking-up. The same goes for America. The EU will continue to exist. There’s even a chance that 'Brexit' could turn out to everyone’s advantage – Europe, Britain and America. We should seek guidance from Tweedledee in Lewis Carroll’s Through the Looking Glass. ‘Contrariwise, if it was so, it might be; and if it were so, it would be; but as it isn't, it ain't. That's logic.' Whatever happens will be a logical outcome of facts, not of illusions.

      MARKET: Europe

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    • Regime change from ‘new narrative’

      by David Marsh | Mon 18 Jul 2016

      The monetary about-face by James Bullard, the hawk-turned-dove St. Louis Federal Reserve Bank president, has wide implications for central bankers. His ‘new narrative’, elaborated at an OMFIF meeting in St. Louis, could shake up how the Fed views the world, reflecting deep-seated changes in the functioning of money and economics. His shift reflects intensive discussions within the St. Louis Fed about what appears to be a semi-permanent transition to very low real interest rates on government bonds around the world.

      MARKET: World

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    OMFIF Chart

    'Investment clock' shows gains for equities

    by Trevor Greetham

    The pick-up in global growth against a low inflation backdrop puts the investment cycle still in an equity-friendly ‘recovery’ phase, according to the Investment Clock, a model-based framework linking asset returns to different phases of the global business cycle.

    Investment clock

    UK's external financing needs

    by Ben Robinson

    One way of measuring economic vulnerability, says Moritz Kraemer of S&P Global in an OMFIF Commentary, is to analyse an economy’s annual gross external financing needs. The UK score is 755%, the highest among all 131 sovereigns rated by S&P Global Ratings.

    UK's external financing needs

    ECB voting rotation

    by Ben Robinson

    At the 10 March ECB monetary policy meeting Bundesbank President Jens Weidmann did not have a vote, due to rotating voting rights introduced in 2015. The rotation along national lines raises the risk of members pursuing national interests in policy decisions. This may make consensus more difficult to achieve.

    ECB voting rotation

    Cost cuts and market share

    by Ben Robinson

    Despite substantial cost-cutting efforts, southern European countries have failed to achieve significant increases in export market share since the financial crisis, according to data collated by the Österreichische Nationalbank.

    Austria meeting
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    POST REFERENDUM CHART

    Brexit consequences for ECB QE

    Britain’s decision to leave the EU has important consequences for the European Central Bank’s quantitative easing programme, resulting in ‘overpurchasing’ of euro area peripheral state bonds at a crucial time for Italy in particular.

    Brexit consequences for ECB QE
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