William Jackson - Capital Economics

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Last quote by William Jackson

One thing we are keeping an eye on is what's happening in China where the recovery seems to have peaked. We expect the slower data to continue in coming quarters and that could have repercussions on emerging markets as a whole.feedback
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NEW May 23 2017 China
We can learn a lot about a person if we know what types of things he or she talks about or comments on the most frequently. There are numerous topics with which William Jackson is associated, including Erdogan, U.S. Fed, and lira. Most recently, William Jackson has been quoted saying: “The news that there's been a consensus on extending the OPEC cuts has provided some support to oil prices and some of the oil currencies such as the rouble. Maybe that has spread through to a more general improvement in sentiment towards emerging markets.” in the article EMERGING MARKETS-Commodity rebound spurs emerging stocks to 2-yr high.
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William Jackson quotes

These tools potentially make what is already a convoluted monetary policy set up more complicated.feedback

There are fundamental reasons why the Turkish lira should weaken with U.S. policy set to tighten and domestic political concerns...Also, it's an economy with an entrenched high wage growth, high inflation problem.feedback

An outright rate hike is the only way the central bank can take action and assure markets it will not let the lira plunge. The longer they go without doing it, the more aggressive action will be needed.feedback

There seems to be a bit of turnaround since yesterday in the lira and one aspect is some of the measures such as selling foreign currencies.feedback

Some people have also interpreted the central bank's comments yesterday as relatively hawkish.feedback

This is a currency that has an economy with large vulnerabilities.feedback

There's a general fear that a Trump presidency would be bad for emerging markets and lead to a flight to safety.feedback

That suggests there might be a slight shift towards a more prudent approach to monetary policy.feedback

It has been driven to a degree by opinion polls in the U.S. and it strengthens when there's a higher likelihood of Hillary Clinton winning.feedback

The inflation outlook is still pretty poor, the current account deficit is widening, they may be cautious because of upcoming hikes by the U.S. Fed and the currency has already weakened quite a bit over the past few weeks. So they could stay on hold after this meeting.feedback

Chinese trade data is a big factor - it suggests domestic demand isn't as strong ... which has a knock-on effect on other emerging markets.feedback

The European markets may have reassessed and maybe some of the fears about Deutsche Bank have faded. More generally, there is a bit of stabilisation after a volatile few days.feedback

The Saudis are quite happy to keep oil prices low to squeeze out high cost producers and it doesn't want to do anything that will benefit Iran. It's unlikely we will see something that will fundamentally alter the outlook for oil prices.feedback

The coup attempt in July seems to have a very marked negative impact on economic activity.feedback

It's always difficult to know quite what to make of these comments, although there are reports already of banks trying to lower their lending rates in response. There are two more general points that can be made though. First, in so far as banks do lower lending rates in response, that will damage their profitability which could in time make them less willing to lend.feedback

There seems to be quite a benign environment for emerging markets at the moment with the Fed not hiking in the immediate future and the prospect of looser policy in both the euro zone and Japan.feedback

The political moves point in the direction that things are likely to get worse rather than better from here on. So the lira is more likely to fall than to rise. This is about Turkish politics - I don't think there are other countries where politicians will take their cue from developments in Turkey.feedback

The near-term economic impact of Friday night's attempted coup will depend on the length and severity of market dislocation, but at the very least the economy is likely to suffer a period of slower growth, and the lira will remain under pressure.feedback

If we do get a stronger President Erdogan, the macroeconomic consequences might take longer to become visible, but it would probably result in a scenario of more volatile, and slower, growth.feedback

We think Mr. Cetinkaya will struggle to resist increasingly vocal demands from Mr. Erdogan and his allies for looser monetary policy.feedback

Our sense is that, so long as inflation continues edges down and oil prices and the ruble stabilize, there may still be some room for rate cuts. But in so far as these do happen, they will come much later in the year, and be relatively small.feedback

It's clearly difficult to predict interest rates in an environment where oil price movements make a significant contribution to the inflation outlook. Given the weakness of the economy it would probably take quite a lot to actually force the MPC (monetary policy committee) to raise rates.feedback

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