Euro scepticism and anti-immigrant sentiment tested
Presidential elections kick off in the Czech Republic today, in a test for the polarising incumbent, Milos Zeman.
Mr Zeman has become a vocal critic of the Euro bloc, railing against immigration, stoking the flames of Islamaphobia and encouraging closer ties with Russia and China.
Leading the charge against Mr Zeman is Jiri Drahos. A former head of the Czech Academy of Sciences, Drahos favours enhancing relations with the West.
No candidate is expected to take the lion’s share of votes today—polling puts Drahos between 22-27% and Zeman 34-42%. With a second round scheduled for the 26th and 10% of Czech’s still undecided, it’s not yet clear who will come out on top.
A victory for Zeman would provide a mandate for building closer ties with the East and throw weight behind his anti-immigrant rhetoric. Critically, a Drahos win would create an island in the sea of right wing parties that have come to dominate parliaments in Poland, Hungary and Austria, creating impetus for the warming of Prague’s relations with the EU.
Ultra-conservative Saudi Arabia opens soccer to women
Today, women in Saudi Arabia will be allowed to attend official soccer matches for the first time. The move follows the stripping of detainment powers from religious police and the overturning of laws that banned public cinemas and female drivers.
With tight restrictions on gender mixing, liberalisation comes as the Kingdom works towards Vision 2030—its economic diversification plan that looks to develop the country’s culture and media sectors.
Though reforms represent the unwinding of conservative social laws, the arrest of dozens of hard-line clerics last September and the appointment of moderates to the Shura council has, at least temporarily, cowed conservatives.
Regardless, the Wahhabi interpretation of Islam remains the foundation of Saudi law. Further liberalisation may offer economic benefits, but also risks alienating the religious establishment.
As the Kingdom pursues a return to ‘moderate, tolerant’ Islam, expect reforms to enjoy continued support from more liberal clerics, while the suppression of ultra-conservative voices will cause tensions to fester underground.
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US inflation data for December released
Today, the Labor Department will publish December’s consumer price index data, which is expected to show an overall increase of 0.2%—less than November’s 0.4% rise.
That figure would be concerning for the US, with the core index for the year expected to have grown by 1.7%—well below the Federal Reserve’s 2% target. Low inflation limits the Fed’s ability to manoeuvre monetary policy in the case of a recession.
With unemployment at a historical low of 4.1% and the economy strengthening, the persistently slow inflation figures have confounded US policymakers. Consequently, the lack of upsurge in consumer prices may see the Fed reassess its plan for three interest rate hikes this year, which could send inflation figures plummeting.
Considering the likely uncertainty produced by today’s figures, expect all eyes to be on next month’s inflation data. Following the Trump administration’s tax reform bill, many US companies have announced plans to increase wages and capital spending, which could drive up inflation. If inflation figures continue to stagnate, the Fed will need to reconsider its monetary policy.