Market Musings 021223:
A packed 2024 year of elections
Summary:
Taiwan is unlikely to become more pro-China overnight
India: Modi’s BJP likely to be confirmed for another term
European Parliament: even with gains for the far right, centrist blocs should dominate
UK: a big challenge for the opposition Labour party to convert their poll lead into a clear majority
US Presidential election: Trump clearly in the lead v Biden
Don’t over exaggerate the impact of politics on the global economy, financial markets
Podcast this week:
Death to "higher for longer"
In this podcast Edmund Shing explains what is « Higher for Longer » and why it is now over.
The context of interest rates and inflation
The reasons for the recent fall in yields
Reasons to stay positive on bonds
2024: a big year for elections around the globe
2024 is going to be a very busy year for politics and elections.
I would like to highlight five key elections that are coming up in 2024 which could give us some clues as to trends both for the global economy and for financial markets in the year ahead.
The elections I am thinking about concern:
Taiwan,
India,
The European Union,
The UK, and
The US.
Taiwan: Key to US-China tensions?
Starting with Taiwan, we have parliamentary elections early next year (January 13).
At the moment, the leading party is the Democratic People's Party (DPP), which is rather anti-China. It is quite clear that no political party in Taiwan would dare at this point to try to declare outright independence, thus provoking mainland China.
However, the key will be whether there is any sort of rapprochement by the victors of this election with the Chinese Communist Party hierarchy.
At this point, with the DPP in the lead, this seems rather unlikely.
However, note that, aside from this upcoming election, there does seem to be calming of tensions at the moment between the US on the one hand, and Communist China on the other.
The US clearly are thinking about upcoming their own elections in November next year, which we'll talk about…
