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 11, 2014

"I will suffer a lot without Italian dairy."

— A Moscow resident on the impact of Russia's new restrictions on food imports from the EU, US, and others (Bloomberg, Aug 7 2014)

The week in review...


ECB: Big bank's theory As eurozone inflation falls farther below the European Central Bank (ECB) targeted 2.0% rate — July's annualized figure came in at 0.4% — the theory there's still time to wait before embarking on "unconventional" asset purchases may be put to the test in the coming months. Russia's retaliatory ban on European food imports could very well drive prices down further and faster than forecast, collapsing what margin of safety there was in the ECB's schedule, while Italy's 2Q return to negative -0.2% growth adds further urgency to the issue.

Germany: What crisis? With June unemployment at 5.1% (vs. 11.5% for the EU overall), jobs are increasingly difficult to fill, rather than find. Industry is responding by reluctantly agreeing to more generous terms in negotiations with powerful national unions. The central bank (Bundesbank) appears pleased rather than concerned, saying that rising wages are "to be welcomed". But business leaders voiced annoyance with the seeming pro-labor tilt; a poll of 502 executives reported 83% agreement that the Bundesbank shouldn't comment on wage increases.

United States

Attention shoppers: Total consumer credit, not including mortgages and other real-estate borrowing, rose $17.3 bn in June following May's $19.6 bn move. But most of the increase was in borrowing for cars and college tuition; revolving credit, which includes credit card balances, rose a mere $941.5 mn in June, the smallest advance since Feb, after May's $1.74 bn rise.

Bankers lend an ear: The Fed's most recent quarterly survey of senior bank loan officers showed both a broad-based pickup in loan demand and an easing of lending standards, for commercial and industrial loans as well as for residential real estate. Banks also reported having experienced stronger net demand for many more loan categories than in the previous quarter's survey.


A taxing problem: India's states each have their own commercial tax regimes, making interstate commerce, taken for granted in the US and in most of Europe, incredibly difficult. Prime Minister Modi is taking on the problem,  advocating for a unified national goods-and-services tax. In theory, this would replace at least a dozen types of taxes and remove major barriers to internal growth. One motivation: the need for more federal-level revenue.

Signs of the times:

China Reports Record Trade Surplus – Bloomberg

Japan Inc. Seeks to Recover Influence in Brazil – Bloomberg

Productivity Rises More Than Forecast, Limiting U.S. – Bloomberg

Germany cancels major arms deal with Russia – Deutsche Welle

Sources: Bloomberg, Reuters, Wall Street Journal, Financial Times, New York Times, Deutsche Welle, Xinhua, China Daily, Telegraph (UK),

...The week ahead:




Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

Aug 10

Golf championship concludes


Turkey: direct presidential elections

China: new bank lending

Aug 11


Mexico: industrial production

Swiss: retail sales
Estonia: GDP
Latvia: trade balance


Aug 12

JOLTS job openings report, monthly budget


Germany: ZEW current conditions survey

Singapore: GDP

Aug 13

Retail sales, business inventories

Mexico: inflation

UK: inflation
Germany, France, Spain:  consumer inflation
Eurozone: industrial production
Swiss: ZEW survey

Japan: GDP, central bank meeting minutes
China: industrial production, retail sales

Aug 14

Unemployment claims,
Puerto Rico electric utility repayment deadline,
Women’s golf championship begins

Brazil: retail sales
Chile: rate decision

France, Germany, Portugal: GDP
Eurozone: CPIs

China: foreign direct investment
Japan: machinery orders

Aug 15

Industrial production, consumer sentiment, producer prices, capital flows



Japan: Prime minister possible visit to war shrine
Hong Kong: GDP

Aug 16






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 Federal Reserve (Fed) is the US central bank, 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.

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. PMI greater than 50 indicated economic expansion; below 50, contraction.

Consumer Price Index (CPI) measures the average change in consumer prices over time in a fixed market basket of goods and services.

The Centre for European Economic Research (ZEW) is a public-private institute associated with the University of Mannheim, Germany.

The European Union (EU) is an economic and political union established in 1993 after the ratification of the Maastricht Treaty by members of the European Community and since expanded to include numerous Central and Eastern European nations.

The Job Openings and Labor Turnover Survey (JOLTS) is conducted by the US Department of Labor, producing data on job openings, hires, and separations.

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Which Asian country will have the strongest growth in the coming year?


Which Asian country will have the strongest growth in the coming year?

Japan, as Shinzo Abe's policy initiatives take hold
India, as Narendra Modi's new government enacts changes
China, as Xi Jinping's reforms promote a stronger financial sector
South Korea, as President Park Geun-hye's plan to boost growth bears fruit

Previous month Poll

Go for growth: Where will a global recovery be strongest this year?

Europe, as countries emerge from bailouts
US, as consumers regain optimism
Japan, as stimulus programs begin to bear fruit
China, as reform and pro-growth policies continue