A quick review of the issues and events driving the markets this past week... and what's on tap for the week ahead.

Weekly Market Snapshot

August 3, 2015

"Normality is back"

— Danny McCoy, head of Ireland's employers’ lobby, reacting to two quarters of positive growth and the IMF's 4% growth forecast for 2015 (Financial Times)

The week in review...


US growth: Solid, if unspectacular The first estimate of GDP growth for Q2 came in at a 2.3% annualized rate, roughly in line with expectations, while final Q1 figures for Q1 showed 0.6% expansion instead of the previous estimate of -0.2%. The upward revision for Q1 was due to unexpectedly strong business investment; in addition, total personal consumption and the Fed's favored inflation indicator, core personal consumer expenditure prices, were stronger than expected.

All this would appear to support the Fed's relatively upbeat economic view; still, the latest figures show the economy grew at a 2.2% annual pace between the end of the recession in June 2009 and the end of 2014—the slowest rate of recovery of the past 70 years.

Mexico: Slowing the peso Approaching 16.5 to the US dollar, the peso reached an all-time low — triggering the central bank's currency intervention program, which buys $200 mn of pesos when the exchange rate falls more than 1.5% away from the previous day's official fixing rate. Explanations for the 10% year-to-date fall include disappointing oil output and stubbornly low global oil prices; flight from EM currencies in advance of a possible US rate hike later this year; currency traders' use of the relatively liquid peso as a proxy to short-sell other, more difficult-to-trade Latin American currencies; and the prospect of slowing demand from China.


Spain: When bailouts go right Tourists added €6.5 bn ($7.1 bn) to Spain's economy in June, up 4.3% from the previous year; for the first half of 2015, the figure was €28.3 bn, up 7.4% year-on-year. The quarter ended June 30 2015 was the eighth in a row with positive growth.  However, unemployment remains at a stubbornly high 22.5% as of June 30 and the political environment remains tumultuous.

Greece: Vote early and often Prime Minister Tsipras won his second impromptu election, setting himself up for a third in two months. This most recent second vote succeeded in convincing the 200-strong central committee of his fractious Syriza coalition to hold an extraordinary party congress in September — without resorting to a potentially divisive roll-call vote. The September congress replaces a proposed snap party referendum on the bailout, but doesn't neutralize the Left Platform, the party's anti-austerity faction.


Malaysia: Side FX Foreign reserves are set to fall below the psychologically-important $100 bn level, last seen during the depths of the 2008 global credit crunch — and the 1997-8 Asian financial crisis. A cabinet reshuffle driven by charges of corruption involving a government agency, combined with declining oil revenue have hobbled the central bank's ability to keep the country's currency, the ringgit, above the 3.8-to-the-US dollar floor, first established during the depths of the 1998 Asian financial meltdown.

1 July 30, 8:00 PM ET

Signs of the times:

Japan's Minimum Wage Is Only Enough for a Bowl of Ramen — Bloomberg
RMB daily trading band may widen to 3%: economists — The New York Times
IMF cannot join Greek rescue, board told — Financial Times
Rising Rents Outpace Wages in Wide Swaths of the U.S. — Bloomberg

Sources: Bloomberg, Wall Street Journal, Financial Times, New York Times, Xinhua, China Daily, Market News International

...And the week ahead:

GLOBAL ECONOMIC CALENDAR: August 2 – August 8, 2015



Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

Aug 2





Aug 3

Personal spending, vehicle sales, construction spending



Japan: monetary base

Aug 4

Factory orders

Brazil: industrial production



Aug 5

Employment survey, trade balance


Eurozone: services/composite PMIs
UK: services PMI


Aug 6

Jobless claims, job cuts


UK: industrial production, rate decision, inflation

Australia: jobless rate

Aug 7





Aug 8






The International Monetary Fund (IMF) is an international organization of member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements.

The Federal Reserve System (the Fed) is responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.

Gross Domestic Product ("GDP") is an economic statistic which measures the market value of all final goods and services produced within a country in a given period of time.

The ringgit is the official currency of the Federation of Malaysia.

Ramen (literally, pulled noodles) is a Japanese noodle soup dish, widely available as instant, microwave-prepared food.

RMB is a common shorthand for the Chinese renminbi or yuan, the national currency of China.

Purchasing Managers Indexes (PMI) measure the manufacturing and services sectors in an economy, based on survey data collected from a representative panel of manufacturing and services firms.

Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

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When will the Fed raise the Fed Funds target rate?


When will the Fed raise the Fed Funds target rate?

Not until 2016

Previous month Poll

Will the current wave of central bank easing jump-start the world's economies?

No - The real issues are structural - real progress on labor reform and regulatory excess will have more impact
No - Deflation is already taking hold, making monetary policy changes ineffective
Yes - The US model shows that monetary easing can help economies heal in the medium term
Yes, but it will take even  longer than it did in the US, and the delay will have a negative political impact