March 2020 Geopolitical Event Watch

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K.P. O'Reilly PhD, JD

K.P. O'Reilly PhD, JD

March 2020 Geopolitical Event Watch

February 28, 2020

Super Tuesday (March 3). 1,357 of the 3,979 pledged delegates are up for grabs across 14 states holding Democratic presidential primaries. The spotlight will be on Vermont Senator Bernie Sanders to see if he maintains his lead following strong showings in Iowa, New Hampshire, and Nevada. Meanwhile, moderate Democrats appear split across Pete Buttigieg, Joe Biden, and Amy Klobuchar. After leading much of last fall, Elizabeth Warren’s campaign needs a strong showing to stay alive.

Coronavirus Spreads. With recent spikes in reported cases worldwide, concerns are mounting over the potential spread of the virus (officially COVID-19) outside of China. The previous narrative suggesting that the virus would be contained to China and only impact the first quarter of economic activity appears wishful thinking (See Figure 1). Although virus-related deaths remain low, economic disruptions are likely to go into the second quarter and may pose significant challenges for national public health systems globally.

OPEC/OPEC+ Meetings (March 5-6). OPEC member-states will meet in Vienna, along with non-OPEC oil-exporting states led by Russia. Discussions will focus on possible deeper cuts in production to stimulate oil prices falling on concerns over slowing global growth caused by the coronavirus. An additional output cut of 1,000,000 barrels a day, on top of the current 1.7 million barrels a day restriction, will be discussed. Whether a consensus exists for further output reductions or the apportioning of any new cuts remains unclear.

Argentina Debt Plan Unveiled. The Fernandez government is expected to layout its much-anticipated debt reprofiling plan within the first two weeks of March. Recent reports suggest that the government’s initial offer will seek a far more substantial haircut from bondholders than previously speculated. Given the recently concluded debt negotiations with the province of Buenos Aries, don’t expect foreign investors to capitulate readily. The likelihood of protracted talks casts doubt on the government’s ambitious deadline of March 31 to conclude the negotiations.

Turkish Foreign Adventures. Big challenges lie ahead for Turkey’s assertive foreign policy that deployed military forces to both Syria and Libya. Fighting around the Syrian city of Idlib threatens to pit Turkish forces against Russian units supporting the Assad regime. In Libya, Turkey suffered its first casualties since deploying troops to support the UN-backed government in Tripoli in January. Efforts to broker a lasting ceasefire and truce with the Libyan National Army (LNA) led by General Khalifa Haftar, who is backed by Egypt, Russia, Saudi Arabia, and the United Arab Emirates (UAE), have broken down. With no clear end in sight for either conflict, President Erdogan will face growing domestic pressure should Turkish casualties continue to mount. Additionally, escalating confrontations with Russia could undo what had been improving relations between Ankara and Moscow.

 

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2020-03-20T08:31:39+00:00 By |