What Our Analysts Are Reading – 8/18/2017

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Each week Frontier Strategy Group’s global team shares their view on key media stories, and what the implications are for businesses that operate in emerging markets. For more information about how to contact our analysts, send us an email.

Pablo GonzalezPablo Gonzalez on “Venezuela Slams ‘Madness’ as Trump Suggests Military Action”

“Despite President Trump’s warning, a US military intervention in Venezuela is highly unlikely, as it faces the opposition of key US allies in Latin America, it would likely face the veto of Russia and China in UN’s Security Council, and it would be self defeating to US economic interests. Trump’s threats, if any, are likely to strengthen the anti American rhetoric held by Chavismo in Venezuela.”

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Dalia Naguib on “Algeria’s Third Premier This Year Signals Turmoil in OPEC State”

“Algeria’s ultra-protectionist Prime Minister Tebboune was fired after just three months in office, likely because of conflicts with Algeria’s business elite over his strict import restrictions. Newly appointed Prime Minister Ouyahia will likely carry out similar policies to former PM Sellal. MNCs should expect import restrictions to continue, but with greater notice and clarity than under Tebboune.”

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Antonio MartinezAntonio Martinez on “Trump may not get the ‘win’ he seeks in NAFTA talks”

“NAFTA talks begin on August 16th, with the Trump administration confronting a difficult job to push through a punitive renegotiation that can be completed before Mexican general elections next July and the mid-terrms in the US in November 2018 occur.”

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Alec LeeAlec Lee on “Brazil revised budget deficit target to 159 bln reais for 2017, 2018”

“Brazil’s deficit revision should have minimal effects on the exchange rate and business confidence levels as the move was widely anticipated. FSG will continue to monitor coming indictments against the president, as well as risks to the current economics team (which generates considerable market confidence), and developments regarding what will be a binary presidential election in October 2018.”

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JosefJosef Jelinek on “China a sweet spot for U.S. companies’ earnings in second-quarter”

“MNCs have been posting stronger revenues and earnings from their Chinese operations of late, benefiting from robust Chinese growth and a slide in the US dollar. For many, China is still a growth market, including for consumer goods and services companies. It is, however, not all rosy, with US-China trade tensions remaining high and with China’s economy expected to cool over the coming quarters.”

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athanasia-kokkinogeniAthanasia Kokkinogeni on “German GDP growth hits fastest annual pace since 2014”

“Germany continues to impress with Q2 growth reaching fastest pace since 2014. Strong domestic demand, robust investment as well as improved exports compared to 2016 brought German growth to 2.1% YOY in Q2. This fuels expectations for an upside in market conditions leading improvements across the eurozone. MNCs should continue to invest in differentiation strategies to capture improved demand.”

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Alex Shober on “Argentine President Macri’s Coalition Gets Strong Support in Primary Election

“Argentina’s governing coalition Cambiemos performed better than expected in Sunday’s PASO. In Buenos Aires Province, former president Cristina Kirchner and Cambiemos’s candidate closed with a technical tie, whereas earlier polls had suggested a Kirchner victory. Markets and MNCs will react positively to the news; the Argentine peso has already appreciated about 3% this morning.”

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