Monday, October 23 2017 | ASIA TODAY INTERNATIONAL - Reporting the Business that Matters in Asia
Updated: 6 hours 57 min ago
Industrial production in July grew by 14.5% yoy (cal.adj.). Our monthly GDP indicator (GBTRGDPY index at Bloomberg) nowcasts 5.1% GDP growth for 2Q and hints even higher performance for 3Q. Considering also an acceleration in 3Q with both base impact and enhanced activity, we believe that the risks on our 5% GDP growth expectation for 2017 are clearly on the upside.
Highlights: FSB includes key attributes of resolution regimes into the list of minimum requirements for good practices. Spanish Ministry of Economics issued a consultation regarding investment firms. The BCBS announced a cooperation agreement with the IFRS Foundation. Finally, the FRB adopted a final rule regarding qualified financial contracts.
Effects from euro appreciation and QE strategy dominate today’s meeting. After very preliminary discussion on alternative scenarios to calibrate QE, decisions will most likely be taken in October. The volatility of the exchange rate is seen as a source of uncertainty, but the new projections are optimistic: stronger growth and only a slight downward revision of inflation
In the context of a reduction in global cross-border funds, this report explores the recent evolution of international banks’ exposures to Latin America using BIS statistics. Latin America is one of the few regions in the world where the exposure of international banks continued to increase as result of the strong presence of international banks with local operations.
The growth rate of the Portuguese economy in 2Q17 decelerated to reach 0.3% QoQ, in line with the BBVA Research estimate (0.4% QoQ) and below that seen in 1Q17 (1.0% QoQ). Based on data so far available, BBVA Research estimates that growth in 3Q17 will be around 0.5% QoQ.
In this issue we will focus on: Banks and new digital players: is there a level playing field?; The paradox of the digital consumer: more demanding but less aware of his rights; PSD2 implementation: transposition deadline draws closer; Central Bank Digital Currencies (CBDC): challenging the financial system as we know it and; Financial innovation policies across the EU
Appropriate the development of the Statistical Model to ensure historical comparability. The new ENIGH shows a decline in both poverty and extreme poverty compared to the year 2014; however, Mexico still faces important challenges in this area, since 43.6% and 7.6% of the population are in poverty and extreme poverty respectively.
Our monthly GDP indicator signals 6% growth in July with available preliminary indicators (32% info) and acceleration will gain pace resulting in at least 7% growth in 3Q even if GDP would not grow at all on quarterly basis. High trend in inflation (around 11% until December) will force the CBRT to stay tight a little longer despite the recent retreatment in USD/TL.
Financial markets’ risk-on mood tightens sovereign spreads beyond fundamentals, while financial disequilibria turn on some warning signals in some Advanced Economies
We estimate that for the second half of 2017, the receipt of remittances will continue to grow in dollars albeit at a more moderate pace than in the first half-year, but the actual amounts in pesos to reach households in Mexico will be lower in comparison to the previous year due mainly to the appreciation of the peso
In August, consumer prices rose by 0.52%, higher than the consensus (0.1%) and even our estimate (0.3%). FX pass-through mostly on the recent appreciation of Euro, second round price effects and spill-overs from the narrowing output gap continued to be the factors behind. We expect the headline to stay close to 11% before it would fall to 9-9.5% at the end of the year.
North Korean crisis is still escalating, especially after its last nuclear test with a hydrogen bomb. Operations against ISIS in Syria and Iraq continue in a positive path. The Kurdish referendum it´s seen as one of the main concerns for the next months.
On 1 August last the Mexico City Legislative Assembly approved certain changes to the Urban Development Law, although these have yet to be published in the Mexico City Gazette. This law contains some very worrying features which, if they come into force, will create very significant economic distortions
Jackson Hole yielded very few headlines. Janet Yellen and Mario Draghi have eschewed any bombastic statements. They have not even offered fresh clues on the next moves for monetary policy, which has left the markets waiting for the meetings scheduled for September.
The performance of real estate in the first half of the year confirms the expectations for 2017. The sale of housing consolidates its growth, 15.5% year-on-year in 1H17, supported by the good economic performance and the low costs of financing. In addition, the non-residential segment rebounded in the first half of the year.