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Great Graphic: China's Unit Labor Costs

September 30, 2014
It is well appreciated that Chinese wages have risen markedly over the past few years.  Inflation has also consistently run faster in China than in the US, Europe and Japan.  Some have cited this as a factor behind China's slowdown.

From a competitive point of view, what really matters is unit labor costs:  wages, benefits and productivity.  As…
Great Graphic: China's Unit Labor Costs Great Graphic: China's Unit Labor Costs Reviewed by Marc Chandler on September 30, 2014 Rating: 5
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Trade and the Impact of the Stronger Dollar

September 30, 2014
With the ECB meeting and US jobs data the key events of the week, it is understandable the August US trade balance, due out Friday, is not drawing much attention.   However, the combination of the growth differentials, favoring the US, and the strong dollar lead to some concerns that trade will act as a drag on GDP.  
Last week, we learned that Q2 …
Trade and the Impact of the Stronger Dollar Trade and the Impact of the Stronger Dollar Reviewed by Marc Chandler on September 30, 2014 Rating: 5
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Disappointing Euro Area and Japanese Data Underpin Greenback

September 30, 2014
Ahead of the ECB's meeting on Thursday where details of the ABS/covered bond purchase scheme are expected to be delivered, the market is particularly sensitive to developments that could spur a strong policy response.  Today's preliminary September CPI figures were seized upon to drive the euro to fresh lows, against both the dollar and st…
Disappointing Euro Area and Japanese Data Underpin Greenback Disappointing Euro Area and Japanese Data Underpin Greenback Reviewed by Marc Chandler on September 30, 2014 Rating: 5
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Great Graphic: Thinking about Liberty and Freedom

September 29, 2014
Back in the late-1970s, a Democrat, Jeanne Kirkpatrick wrote an essay in Commentary Magazine critiquing President Carter's foreign policy.  She drew a distinction between authoritarian and totalitarian regimes.

The former, like Chile, had a market economy but not democracy.  The latter, like the Soviet Union and Cuba, had neither markets nor de…
Great Graphic: Thinking about Liberty and Freedom Great Graphic: Thinking about Liberty and Freedom Reviewed by Marc Chandler on September 29, 2014 Rating: 5
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Brazil: Marina Losing her Edge?

September 29, 2014
(from my colleagues Dr. Win Thin and Ilan Solot)

Several variables are changing simultaneously which are hurting the prospects for Brazilian assets. The main ones are: (A) Dilma is gaining ground and Marina losing momentum faster than we expected, (B) the broad strong dollar trend hitting EM across the board, and (C) a global equity sell off. 
As …
Brazil: Marina Losing her Edge? Brazil: Marina Losing her Edge? Reviewed by Marc Chandler on September 29, 2014 Rating: 5
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Emerging Markets: Week Ahead Preview

September 29, 2014
(from my colleagues Dr. Win Thin and Ilan Solot)

The EM selloff looks set to continue. USD/BRL is trading at highs not seen since late 2008, while USD/RUB is making all-time highs. Markets are putting greater pressure on the weaker credits, but even the stronger credits are getting hit.
There has been very little resistance by officials to the st…
Emerging Markets: Week Ahead Preview Emerging Markets: Week Ahead Preview Reviewed by Marc Chandler on September 29, 2014 Rating: 5
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USD Firm, but Antipodeans Slide

September 29, 2014
The US dollar retains a firm tone against the major currencies, but the real move today is the drop in the Australian and New Zealand dollars.  The latter is very much in focus as the Kiwi has lost about 1.4%. That brings the month to date loss to 7.3%.  The central bank confirmed it sold NZD521 mln in August.  This is the most since July 2007.  O…
USD Firm, but Antipodeans Slide USD Firm, but Antipodeans Slide Reviewed by Marc Chandler on September 29, 2014 Rating: 5
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Event Risks in the Week Ahead

September 28, 2014
The key event in the week ahead is the ECB meeting. The ECB surprised many in early September by cutting key interest rates.  We had anticipated it because although Draghi had indicated their rate policy had been exhausted, he acknowledged there some still scope for technical adjustments.  We had thought it bolstered the chances of a successful TL…
Event Risks in the Week Ahead Event Risks in the Week Ahead Reviewed by Marc Chandler on September 28, 2014 Rating: 5
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