OPEC's Meeting Results and Eurozone Inflation Numbers

Two developments are important for investors to know about before the markets open on Friday to close the month.  

First, and most importantly, the results of the OPEC meeting are the most negative outcome for prices.  OPEC, which over-produced in October, decided to rollover the existing quota 30 mln barrels a day.  We had noted that the timing of its next meeting would be an important tell.  It did not decide to schedule a meeting in the February-March period, when the seasonal demand slackened.  Instead, the next OPEC meeting is for June.  

U.S. Holiday Means Economic News Today, Then Focus Shifts Overseas

The capital markets are mostly quiet, amid a light news stream, and ahead of three key events in the coming days, with U.S. markets closed tomorrow and light participation expected on Friday.  These events are tomorrow's OPEC meeting, the flash euro area inflation reading on Friday, and month-end portfolio and hedge adjustments.  

China Aims High

This geopolitical summit season has consolidated ongoing trends in international affairs. A still-rising China with global leadership aspirations, a resurgent Russia bent on restoring its superpower status, and sclerosis and dysfunction in Western countries is likely to dominate international politics for at least the next 20 years. In fact, we might only be at the beginning in this long time span where seismic global power shifts are taking place.

Japan's Election - Policy or Politics?

Prime Minister Abe is subjecting his ruling coalition — and his nation — to an unnecessary election on 14 December 2014. Abe claims his decision is all about policy, but in reality it is all about politics. His stated rationale for calling the election is the need to secure voters’ endorsement of his administration’s decision to postpone the consumption tax rise to 10 per cent until April 2017. But his real reasons are based on cold calculations of political self-interest.

Holiday-Shortened Week in U.S. not Short on News

The US dollar has begun the holiday-shortened week on a firm note, but the stronger than expected German IFO report helped steady the euro near $1.2400.  Although the Japanese markets closed earlier today, the dollar rebounded toward JPY118.40, as participants recognize official jawboning was more about the pace of the yen's decline than the level.  

The German flash PMI was disappointing, but the ZEW survey was considerably better.  The German IFO followed the ZEW lead, not the PMI.  The IFO improved for the first time since April.

One Cannot Separate Politics and Economics

Many people assume that politics and economics are separate spheres.  We find ourselves often harkening back to the even older tradition of referring to "political economy". Harold Laswell, regarded as the father of modern political science, famously defined politics as who gets what, when and how. Is not that the role of the price mechanism and the market economy?  

Global Summits, Global Hopes

For global governance watchers, this was the big week of the year. Between 7 November and 16 November, the world witnessed an APEC meeting in Yanqi Lake near Beijing complete with a bilateral China–Japan ‘breakthrough’ and a major US–China climate deal; an historic ASEAN and East Asia Summit held in Naypidaw, Myanmar; and a colourful G20 meeting in Brisbane, Australia.

Notwithstanding the chorus of those announcing growing disorder, global order seems better off after these summits.

Bangladesh Breaks from Tradition with Recent Election

Recently Bangladesh was side-tracked from an electoral democracy. Earlier this year, the ruling party Awami League formed government after a one-sided election. Bangladesh’s major opposition party, the Bangladesh Nationalist Party (BNP), boycotted the election on the grounds that it was not taking place under a neutral caretaker government and that elections held under partisan caretaker governments would not be fair.