While emerging markets have a knack for delivering the so-called unknown unknowns when it comes to political event risk, we can venture to evaluate some of the known unknowns (aka known event risk) for 2020. Here is a brief list of EM-relevant political events to monitor as we enter the new year.
In the span of three months, U.S.-China trade relations went from being on the verge of a settlement to the precipice of an all-out trade and currency war. It looks like Trump’s infamous quote that trade wars are easy to win will be put to a test. How did it all go so bad, so fast?
At the start of 2019, sentiment for news stories covering Chinese economic uncertainty was slowly, but steadily improving as data suggested that the government’s stimulus efforts were helping to avoid a much worried about hard landing for the Chinese economy.
The first six months of Andrés Manuel López Obrador’s (aka AMLO) presidency has proven to be no honeymoon between the Mexican leader and investors. Any post-election optimism has soured as concerns over AMLO’s leftist political orientation and policy uncertainty have made investors wary and left second-guessing the government’s economic agenda going forward.
While the topic of trade is capturing the headlines, escalating U.S.-China tensions are revealing a long list of issues, from economics to security, where the two countries’ interests diverge. This latest development has sparked a wave of op-eds discussing their future relationship.
The last 30 plus days have seen a dramatic unfolding of events involving Russia. The combination of rising political tensions, new U.S. sanctions and another chemical weapons attack in Syria have put investors on edge. The conundrum facing investors is whether this new Syria crisis will quickly fade or linger given other cumulative effects.
Over the course of 2017, we integrated big data analytics into Northwest Passage Capital Advisors’ tracking of global events. As part of our firm’s ongoing “Boots in the Cloud” research initiative, we are actively leveraging the vast data potential of the Global Database of Events, Language, and Tone (“GDELT’’) to gain a fuller and better-informed perspective on world events impacting emerging markets.
The recent triggering Article 50 renews speculation over Brexit. Application of basic game theory sheds light on some potential outcomes.
Application of simple game theory offers unique insights on potential US and Mexican bargaining strategies for the upcoming NAFTA negotiations.
The populist surprises of Brexit and the US election, have heightened risk anxiety for national elections across Europe in 2017.