Salient to Investors: Fed tapering, China’s credit squeeze, and Japan’s reflation ultimately prime the three biggest economies for less volatile and longer-lasting expansions, but near-term, emerging markets, commodity producers, and economies that need cheap cash or weaker currencies, including the euro area, could suffer. Stephen Jen at SLJ Macro Partners said that
READ MORE... →Salient to Investors: Boston Consulting says Mexico is beginning to beat China as a manufacturing base despite its higher crime rate: a plus for the US because Mexican factories use 4 times as many American-made components as Chinese factories do. Mexico’s 4 key advantages: Manufacturing wages, adjusted for Mexico’s superior worker
READ MORE... →Salient to Investors: Latin America is disappointing investors, economists and businesses with slower-than-forecast growth as waning commodity prices and strong currencies hit nations that failed to diversify and become more competitive. Economists cut Brazil’s 2013 outlook for the second time in 7 days, forecasting the worst 3-year period in a decade.
READ MORE... →Salient to Investors: The OECD said: The gap between rich and poor widened more in the 3 years to 2010 than in the previous 12 years. The richest 10% of society in the 33 OECD countries received 9.5 times that of the poorest in terms of income, versus 9 times in 2007.
READ MORE... →Salient to Investors: The Asian Development Bank said: China’s surging wage costs are undermining competitiveness and threatening growth. Average inflation-adjusted wages have more than tripled in a decade and non-wage costs have risen since a 2008 labor law – restrictions on workers’ mobility through the household registration system known as hukou. Changes in
READ MORE... →Salient to Investors: Justin Urquhart Stewart at Seven Investment Mgmt said the coming year depends a lot on the German elections, and the end to the boom in the bond markets is a matter of when rather than if. The fudging of the fiscal cliff issue means a few more crises
READ MORE... →Salient to Investors: Foreign investors poured a record $7.36 billion into Mexican debt securities in 2012 to take advantage of economic growth that is four times Brazil’s and yields that are still triple those for US Treasuries. Luis de la Cerda at Afore Sura said foreigners won’t leave the bonds and are here
READ MORE... →Salient to Investors: Tom Wainwright said that after years of under achievement and rising violence, Mexico is at last beginning to realise its potential. Mexico can benefit from big, irreversible trends: a falling birth rate, leaders at last tackling home-grown problems, to rising wages in China. Mexico outpaced Brazil in 2011 and will grow
READ MORE... →Salient to Investors: The Mexican peso has gone from the world’s strongest major currency to the weakest amid growing investor concern US demand will diminish. X-Trade Brokers Dom Maklerski expects another 3.9 percent depreciation by September and Bank of Nova Scotia recommends selling the peso. Futures traders are cutting bullish bets at
READ MORE... →Salient to Investors: Pimco is the biggest holder of peso bonds. get loads of money Bank of America says that a Romney win could spark a selloff in Treasuries that will be mirrored in Mexican notes, the most correlated to US government bonds of any debt in Latin America. Kevin Daly at Aberdeen Asset
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