Friday, October 6
MOST VALUABLE PEACEMAKER
Nobel Peace Prize to be awarded
The Norwegian Nobel Committee will award the Nobel Peace Prize today.
Pope Francis and Angela Merkel top the bookies’ lists to take the coveted award. Both have received praise for their stances on migration; Francis has urged governments to integrate refugees, while Chancellor Merkel welcomed a million into Germany in 2015.
Other choices could include Iranian Foreign Minister Javad Zarif and EU foreign policy chief Federica Mogherini, in recognition of their leadership during the Iran nuclear deal. Yet, the committee could easily opt for a surprise pick—Colombian President Juan Manuel Santos came from nowhere to take out last year’s award.
Indeed, the committee has shown itself willing to shape real-world events; it awarded Mr Santos the prize just five days after FARC peacemaking efforts were jeopardised by a referendum defeat. It could aim for a similar effect this year.
A win for the Iran deal architects could push back against President Donald Trump’s potential scrapping of the pact when he reviews it next week.
DECRYING INDEPENDENCE
Madrid navigates Catalan question post-referendum
Today, Catalonia’s Regional Police Chief Josep Lluis Trapero is to appear before the National Court in Madrid on sedition charges. The case is part of the national government’s attempts to punish Catalan leaders following Sunday’s independence plebiscite.
With Catalonia threatening to unilaterally declare independence, the Rajoy government has pondered enacting Article 155 of the Spanish Constitution, disbanding the Catalan government and placing the region under direct federal control. Associated with the Franco dictatorship by many, a unilateral invocation of the “nuclear option” would paint Rajoy’s People’s Party as autocratic.
Unfortunately for the PM, Socialist support for invoking Article 155– a necessity given the administration’s minority in parliament–has dwindled following harsh international condemnation of Madrid’s violent response to Sunday’s referendum. According to the regional government, almost 900 people were injured.
The Catalan parliament had planned to formally declare independence from Spain on Monday, but its session has been suspended by the Spanish constitutional court. Even if it doesn’t happen on Monday, the Catalan parliament is unlikely to forgo declaring independence. As such, Rajoy might have no choice but to soften his stance and accede to talks with the regional government.
A CONSUMER ROLLERCOASTER
Brazil’s September inflation data to undershoot target
Brazil’s inflation rate hit an 18-year low in August; today’s figures are expected to show a continuation of this trend.
A decline in food and electricity prices is being cited as the reason for flat-lining consumer prices. Brazil experienced a record harvest in the first half of the year, due to heavy rainfalls, which also boosted the country’s hydroelectric power generation. A hike in electricity prices this month and the coming dry season are likely to alleviate this unexpected downward pressure on inflation.
With the current annualised inflation rate at 2.46%—well below the central bank’s 4.5% target—Brazil is on the verge of undershooting on inflation; however, considering the key rate was in double digits last year, today’s figures may well be perceived as the result of a successful war on inflation.
Expect interest rates, currently at 8.25%, to be cut in the near future; economists think the cash rate could drop to below 7% by the year’s end.
HAPPENING ELSEWHERE…
Hope for Japan, US jobs data expected to be weak
The Party of Hope—Japan’s newly-formed opposition party—will unveil its election platform. Led by populist Tokyo Governor Yuriko Koike, the party is expected to oppose the planned 2% increase in consumption taxes proposed by PM Shinzo Abe and support phasing out nuclear power plants by 2030. Contrastingly, Ms Koike and her cadres are likely to back the ruling LDP’s push to reform Japan’s pacifist constitution, although they have insisted that “sufficient debate” must be had before any moves are made. Campaigning begins on Tuesday—a mere 12 days before the vote is to be held.
Investors will have an eye on nonfarm payroll data—a measure of job growth—which will be released by US authorities today. Economists suggest some 90,000 jobs were created in September, around half the average figure recorded over the past 18 months. The damage wrought by Hurricanes Irma and Harvey are being blamed for the weak showing.