Plummeting ruble and the disarray in that country’s markets pose real threats to the global economy

5 REASONS FOR INVESTORS TO CARE ABOUT RUSSIA’S MARKET TURMOIL

It might be tempting to think in realpolitik terms about Russia’s financial woes right now — the idea that a weakened Russia has less weight to throw around in conflicts such as the Ukraine and Syria. But the reality is that a plummeting ruble and the disarray in that country’s markets pose real threats to the global economy.

Here are five major reasons why  outside investors should care about a financial crisis in Russia.

DEBT MARKET CONTAGION.

CURRENCY MARKET CONTAGION.

FURTHER DECLINES IN OIL PRICES

AN ESCALATING MILITARY CONFLICT?

A COLD WINTER FOR EUROPE?

 

Read full text here : http://blogs.wsj.com/briefly/2014/12/16/5-reasons-for-investor-to-care-about-russias-market-turmoil

 

 

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Black day :: Russia yesterday and UK in 1997

It’s never a good day when almost 10% of the value of the world’s largest country – Russia – is wiped out.

Do you remember UK in 1997 ?

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The Future Of The Euro Could See Trouble This Week

 

It was almost exactly five years ago that the euro crisis erupted, starting in Greece. Investors who had complacently let all euro-zone countries borrow at uniformly low levels abruptly woke up to the riskiness of an incompetent government borrowing money in a currency which it could not depreciate. There is thus a dismal symmetry in seeing the euro crisis flare up again in the place where it began.

The proximate cause of the latest outbreak of nerves was the decision by the Greek government, now headed by the generally competent Antonis Samaras, to advance the presidential election to later this month.

The presidency is largely ceremonial, but if Mr Samaras cannot win enough votes in parliament for his candidate, Stavros Dimas, a general election will follow. Polls suggest the winner would be Syriza, a populist party led by Alexis Tsipras. Although Mr Tsipras professes that he does not want to leave the euro, he is making promises to voters on public spending and taxes that may make it hard for Greece to stay. Hence the markets’ sudden pessimism.

As it happens, there is a good chance that Mr Dimas, a former EU commissioner, will win the presidential vote at the end of this month (see “Greece’s crisis: Samaras’s gamble”). But the latest Aegean tragicomedy is a timely reminder both of how unreformed the euro zone still is and of the dangers lurking in its politics.

It is true that, ever since the pledge by the European Central Bank’s president, Mario Draghi in July 2012 to “do whatever it takes” to save the euro, fears that the single currency might break up have dissipated. Much has been done to repair the euro’s architecture, ranging from the establishment of a bail-out fund to the start of a banking union. And economic growth across the euro zone is slowly returning, however anaemically, even to Greece and other bailed-out countries.

Read more: http://uk.businessinsider.com/the-future-of-the-euro-could-see-trouble-this-week-2014-12?r=US#ixzz3LwXeBjqZ

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U.A.E. Sees OPEC Output Unchanged Even If Oil Falls to $40

OPEC will stand by its decision not to cut crude output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.

OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuelasupports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5.

“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.

OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their collective target for a sixth straight month, according to data compiled by Bloomberg. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production. The Organization of Petroleum Exporting Countries supplies about 40 percent of the world’s oil.

Prices Tumble

Brent crude, a pricing benchmark for more than half of the world’s oil, slumped 2.9 percent to $61.85 a barrel inLondon on Dec. 12, for the lowest close since July 2009. Brent has tumbled 20 percent since Nov. 26, the day before OPEC decided to maintain production. U.S. West Texas Intermediate crude dropped 3.6 percent to $57.81 in New York, the least since May 2009.

The U.A.E. hasn’t been informed of any plan for an emergency meeting, Al-Mazrouei said. OPEC Secretary-General Abdalla El-Badri said, “we don’t know,” when asked at the same conference about the possibility of such a meeting.

 

http://www.bloomberg.com/news/2014-12-14/u-a-e-says-opec-won-t-change-output-even-if-price-drops-to-40.html

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BIG MARKET NEWS WEEK 14 DEC – 20 DEC 2014

 

Japan

Monday, Dec. 15, 2014 00:30
JPY   Tankan Large Manufacturing Outlook (Q4)
China Tuesday, Dec. 16, 2014 02:45
CNY   HSBC Manufacturing PMI (Dec)Preliminar
United Kingdom Tuesday, Dec. 16, 2014 08:00
GBP Bank Stress Test Results
France Tuesday, Dec. 16, 2014 09:00
EUR   Markit Manufacturing PMI (Dec)Preliminar
Germany Tuesday, Dec. 16, 2014 09:30
EUR   Markit Manufacturing PMI (Dec)Preliminar
United Kingdom Tuesday, Dec. 16, 2014 10:30
GBP Core Consumer Price Index (YoY) (Nov)
United Kingdom Tuesday, Dec. 16, 2014 10:30
GBP Consumer Price Index (YoY) (Nov)
Germany Tuesday, Dec. 16, 2014 11:00
EUR ZEW Survey – Economic Sentiment (Dec)
United Kingdom Tuesday, Dec. 16, 2014 11:30
GBP BOE’s Governor Carney speech
Canada Tuesday, Dec. 16, 2014 14:30
CAD  Manufacturing Shipments (MoM) (Oct)
United States Tuesday, Dec. 16, 2014 14:30
USD Building Permits (MoM) (Nov)
United KIngdom Wednesday, Dec. 17, 2014 10:30
GBP BOE MPC Vote Cut
United KIngdom Wednesday, Dec. 17, 2014 10:30
GBP BOE MPC Vote Hike
United KIngdom Wednesday, Dec. 17, 2014 10:30
GBP BOE MPC Vote Unchanged
European Monetary Union Wednesday, Dec. 17, 2014 11:00
EUR  Consumer Price Index – Core (YoY) (Nov)
European Monetary Union Wednesday, Dec. 17, 2014 11:00
EUR Consumer Price Index (YoY) (Nov)
United States Wednesday, Dec. 17, 2014 14:30
USD Consumer Price Index (YoY) (Nov)
United States Wednesday, Dec. 17, 2014 14:30
USD Consumer Price Index Ex Food & Energy (YoY) (Nov)
United States Wednesday, Dec. 17, 2014 14:30
USD  Consumer Price Index Ex Food & Energy (MoM) (Nov)
United States Wednesday, Dec. 17, 2014 17:00
USD Fed’s Monetary Policy Statement
United States Wednesday, Dec. 17, 2014 20:00
USD Fed Interest Rate Decision
United States Wednesday, Dec. 17, 2014 20:30
USD Fed’s Monetary Policy Statement and press conference
New Zealand Wednesday, Dec. 17, 2014 22:45
NZD Gross Domestic Product (YoY) (Q3)
Germany Thursday, Dec. 18, 2014 10:00
EUR IFO – Business Climate (Dec)
United Kingdom Thursday, Dec. 18, 2014 10:30
GBP Retail Sales (MoM) (Nov)
United States Thursday, Dec. 18, 2014 14:30
USD Initial Jobless Claims (Dec 12)
United States Thursday, Dec. 18, 2014 16:00
USD  Philadelphia Fed Manufacturing Survey (Dec)
Japan Friday, Dec. 19, 2014 n/a
JPY BoJ Monetary Policy Statement
Japan Friday, Dec. 19, 2014 n/a
JPY BoJ Press Conference
Canada Friday, Dec. 19, 2014 14:30
CAD Consumer Price Index (YoY) (Nov)
Canada Friday, Dec. 19, 2014 14:30
CAD Bank of Canada Consumer Price Index Core (YoY) (Nov)
Canada Friday, Dec. 19, 2014 14:30
CAD Bank of Canada Consumer Price Index Core (MoM) (Nov)

 

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Key Races and Numbers to Watch in Japan’s 2014 General Election

With Sunday’s general election just four days away, most local media in Japan are now predicting a landslide win for Prime Minister Shinzo Abe and his Liberal Democratic Party. Of the 475 seats that are up for grabs, the LDP is likely to at least hold on to the 295 seats they had before the parliament was dissolved.

But that doesn’t mean the voting on Sunday will be a throwaway match. Here are key races and nail-biter districts which could see plenty of drama, including party leaders falling from grace, scandal-tainted Cabinet members getting knocked out and the end of the road for some heavyweight politicians.

The Democratic Party of Japan won a whopping 308 seats in the 2009 general election and ousted the LDP from power.   They fell flat three years later in the 2012 election, only winning 57 seats. While the largest opposition party is expected to add some seats on Sunday, some of the key DPJ figures are facing tough competition in their districts.

DPJ president Banri Kaieda is up against LDP’s Miki Yamada in Tokyo’s 1st district, who he lost to in the 2012 campaign. Mr. Kaieda managed to obtain a seat only through the proportional representation system.

Former Prime Minister Naoto Kan followed the same path as Mr. Kaieda in 2012, losing to LDP’s Masatada Tsuchiya but keeping his seat via proportional representation. He will face Mr. Tsuchiya again in Tokyo’s 18th district.

In the proportional representation system, voters choose from a list of parties with each party receiving seats in proportion to the percentage of votes.

http://blogs.wsj.com/japanrealtime/2014/12/10/key-races-and-numbers-to-watch-in-japans-2014-general-election/

 

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Beijing’s maritime encirclement strategy compared to Go

 

Alexander Vurving from the Honolulu-based Asia-Pacific Center for Security Studies takes the Chinese board game of weiqi or Go to describe the country’s grand strategy in the disputed South China Sea in an article written for the website of National Interest magazine on Dec. 8.

Vurving said that while chess is a game of checkmate, Go is a game of encirclement. “There are no kings, queens or pawns as there are in chess, only identical stones whose power depends on where they are in the larger arrangement of the pieces. If chess is a contest of armies, weiqi is a struggle between configurations,” he wrote. While chess players focus on the destruction of the enemy’s physical power, Go players strive for control of strategic positions.

China’s land reclamation programs in the Spratly and Paracel islands is a symbol of the nation’s strategy to occupy strategic positions. The most powerful weapon China has in the region is its nuclear submarine base at Yuling on Hainan island. Vurving said however that the location of the submarine base remains far from the disputed waters. What China is most likely to do is to expand its influence in the region through the use of fishing boats and lightly armed government vessels, he said.

Quoting from a senior US diplomat, Vurving said great powers do not to go to war with each other over rocks. A leading scholar of Chinese naval development said that an international incident in the South China Sea will not bring major danger to the global balance of power nor even to the normal functioning of the international system. From the perspective of Go players, China’s strategy in the disputed waters is a masterclass in how to play the game, according to Vurving.

The goal of this strategy is to gain control of the region through creeping expansion instead of major battles. With its land reclamation, China can slowly expand the territory it controls in the South China Sea. Vurving said the first step for China is to avoid open armed conflict as much as possible. Second, China must try its best to control the most strategic positions over the disputed region.

Third, Vurving said China has to develop these strategic positions into strong points of control. The People’s Liberation Army must establish important logistics and military bases in the region for power projection in the future, he said. China’s grand strategy is basically trading quantity for quality, according to Vurving. Five of the six reefs of the Spratly islands currently under Beijing’s control are among the most strategic features in the archipelago, the author said.

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When hedge funds are overwhelmingly on the same side as the broader market, you know it’s a crowded trade.

 

When even hedge funds are overwhelmingly on the same side of an investment as the broader market, you know it’s a crowded trade.

This is where the euro finds itself going into 2015. Traders, investment banks, asset managers and the so-called “smart money” of hedge funds are all betting on a weaker euro, leaving the only point of disagreement being by how much.

The rationale behind it is simple: the European Central Bank will aggressively ease monetary policy by undertaking a large-scale government bond buying programme to prevent low growth and inflation from strangling the region’s economy.

The contrast between monetary easing and weak economic growth in the euro zone with likely monetary tightening and stronger growth in the United States should push the euro lower.

ECB president Mario Draghi has indicated that the central bank is poised to expand its balance sheet by around 1 trillion euros of asset purchases, including politically sensitive purchases of government debt.

It is a policy that has already been adopted by the U.S., UK and Japanese central banks since the 2007-08 financial crisis, with varying degrees of success.

But the only problem with the expectation of a lower euro next year is that everybody shares it.

“I’ve never seen such a big consensus in my 20 years of investment life,” said Yves Kuhn, chief investment officer at Banque Internationale à Luxembourg.

“I just don’t like a consensus like that.”

http://www.reuters.com/article/2014/12/09/markets-euro-idUKL6N0TS3GT20141209

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BIG MARKET NEWS WEEK 08 DEC – 12 DEC 2014

 

 

Canada

Monday, Dec. 8, 2014 13:30
CAD Building Permits (MoM) (Oct)
Australia Tuesday, Dec. 9, 2014 00:30
AUD  National Australia Bank’s Business Confidence (Nov)
United Kingdom Tuesday, Dec. 9, 2014 09:30
GBP Manufacturing Production (MoM) (Oct)
China Wednesday, Dec. 10, 2014 01:30
CNY Consumer Price Index (YoY) (Nov)
China Wednesday, Dec. 10, 2014 01:30
CNY Consumer Price Index (MoM) (Nov)
China Wednesday, Dec. 10, 2014 01:30
CNY Producer Price Index (YoY) (Nov)
New Zealand Wednesday, Dec. 10, 2014 20:00
NZD RBNZ Interest Rate Decision
New Zealand Wednesday, Dec. 10, 2014 20:00
NZD RBNZ Press Conference
New Zealand Wednesday, Dec. 10, 2014 20:00
NZD RBNZ Press Conference
China Thusday, Dec. 11, 2014 n/a
CNY New Loans (Nov)
Australia Thusday, Dec. 11, 2014 00:30
AUD Employment Change s.a. (Nov)
Australia Thusday, Dec. 11, 2014 00:30
AUD Unemployment Rate s.a. (Nov)
Switzerland Thusday, Dec. 11, 2014 07:30
CHF SNB press conference
Switzerland Thusday, Dec. 11, 2014 08:30
CHF SNB Interest Rate Decision
European Monetary Union Thusday, Dec. 11, 2014 10:15
EUR Targeted LTRO
United States Thusday, Dec. 11, 2014 13:30
USD Retail Sales (MoM) (Nov)
United States Thusday, Dec. 11, 2014 13:30
USD Retail Sales ex Autos (MoM) (Nov)
United States Thusday, Dec. 11, 2014 13:30
USD Initial Jobless Claims (Dec 5)
China Friday, Dec. 12, 2014 05:30
CNY Industrial Production (YoY) (Nov)
United States Friday, Dec. 12, 2014 13:30
USD Producer Price Index (MoM) (Nov)
United States Friday, Dec. 12, 2014 14:55
USD  Reuters/Michigan Consumer Sentiment Index (Dec)Preliminar

 

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