Supreme Court decision to disqualify Nawaz Sharif as party head creates uncertainty;
SBP seeks to amend FX manual to better regulate Dollar flows in and out of Foreign Currency Accounts;
FATF decision has been delayed for 3 months, but could return with a bigger bang;
BoP pressure continues to build;
Despite being an election year, there is no election cheer;
School shooting in Florida could taint pro-gun Republican politicians;
Trump’s expansionist fiscal policy contradicts the Fed’s monetary tightening. Could this trigger a Twitter exchange between President Trump and the US Federal Reserve? ;
Trump’s pivot towards India will keep Pakistan-US relations tense.
Case against Nawaz Sharif is heading towards a conviction;
Nawaz Sharif is lashing out against Judiciary;
Islamabad blockade on Ahmedi issue shows how powerless the authorities are;
Steps taken by Saudi crown prince (MbS) are very significant, and will change domestic policies and Saudi foreign policy. Could negatively impact Pakistan’s economy in the short-term, but could be positive in the medium and long-term;
Trump’s blanket support for MbS is creating a strong anti-Iran bias in US foreign policy;
Glaring contradiction in US policy to defuse tensions between America and North Korea- what President Trump tweets and what key cabinet members state;
Updated SBP data on FX swaps, shows that authorities are desperate to give the market false comfort;
Next IMF program could be impacted by changing geo-political landscape.
Premier Xi (of China) being compared to Mao Zedong and Deng Xiopeng.
Mao made China;
Deng made China prosperous;
Xi makes China powerful;
President Trump, on the other hand, continues to be President Trump;
Political uncertainty in Pakistan increases;
Sharjeel Memon’s arrest has created expectations that the PPP is also going to be investigated;
COAS’s stated concern about the economy is unprecedented (and telling). Rumors swirling about a 3-year technocratic government to rebuild key institutions (SBP, MoF, SECP, FBR, PC, Nepra, etc.);
Premier Xi flexes military/economic muscle and challenges Western democracies (19th National People’s Congress, Oct 18th-24th, 2017);
Stand-off between the US and North Korea continues;
Trump’s rhetoric against Iran, will deepen the divide between the US and China, and force regional countries to take sides.
PKR volatility reveals a compromised central bank (Dar’s public outburst against SBP on July 5th-6th);
Despite assurances from GoP/SBP, a BoP crisis appears likely;
Supreme Court’s unanimous verdict to disqualify Nawaz Sharif, is in keeping with Justices’ written judgment and blunt JIT assessment;
Reaction of Western government?
Will MoF/SBP start talking with the IMF?
Will new SBP Governor retain his position?
BoP problem is structural. Exports are key and CPEC needs to become export-based to succeed;
Expect mini-Budget to resolve external sector problem;
Qatar blockage has not helped the Saudi alliance or the US (Qatar will remain defiant);
White House descending into the unknown (Priebus leaves, trump Tweets against his Attorney General, health reform is rejected, Trump criticizes Hezbollah during a press conference with Lebanese PM, where Hezbollah is a coalition partner in the Lebanese government);
North Korea tests ballistic missile that can reach the continental US. Trump refuses to engage the UN and seeks to find a unilateral solution. Americans increasingly concerned about a nuclear exchange.
Stock market very erratic, and JIT is being blamed;
JIT is serious, and the manner in which the PML-N is hitting back reveals that it is scared of the possible outcome. Predict a negative verdict against Nawaz Sharif;
Qatar blockade is likely to be green-lighted by Trump, and now cannot be solved within the GCC. Turkey’s Erdogan is very vocal, showing regional ambitions that are new;
Iran has struck Syria with missiles. This is unprecedented and shows that Iran also has regional ambitions;
Policymaking and regulatory institutions in Pakistan are now unable to manage political/financial /economic shocks;
Export outlook will not be rectified by ‘policy packages’ – more is now required;
Suggest that high end consumer items (luxury cars) may be disallowed;
Real estate values in Karachi are soft because of regulatory issues;
Qatar blockade will not be resolved soon, while Syria has become a proxy war between the US and Russia;
Macron’s victory is a relief for the liberal order;
Trump’s involvement with Russian meddling in the 2016 election will not go away.
External sector remains top concern, and export revival is unlikely;
Stock market is jittery despite MSCI;
PM relaxes fiscal deficit cap for the next three years, gearing up for forthcoming elections;
Trump fires FBI Director, which looks like the initial stages of the Watergate Scandal of 1974;
Iran’s elections may bring in a hardliner;
Macron wins, but will face a hostile work environment;
Notes from a very revealing trip to Lahore and Faisalabad to meet large textile exporters:
Exports down because of structural and behavioral reasons. Incentives are such, that Pakistan’s largest exporters have started making more money in real estate development in Pakistan than in developing their export markets.
Unless we get serious about increasing exports, we will have to slash imports;
Trump may have obstructed FBI’s investigation (which is an impeachable offence);
Things are falling in place for a bi-polar world;
Macron’s victory does not mean the populist wave in Europe has been extinguished.
