What follows are the preliminary findings for issues identified in the daily Watch Lists this week. We are only sending findings that we regard as significant or potentially significant to keep this email manageable. We have findings for all the Watch List items. Should you be interested in findings not listed here, please contact us and we will email them to you. The findings below include more items from later in the week because they often overlap with items from earlier in the week.

To emphasize, you can contact us if there is an item not included here for which you’d like to see the findings.

Our goal, as always, is to focus on what matters and not on things that don’t.

Items from Sept. 8

Armenia: Armenian Prime Minister Hovik Abrahamian is stepping down. Why is he doing this and what does this tell us about where Armenia stands? It has been quiet there since the instability we were seeing last month.

  • Finding: Armenian President Serzh Sargsyan promised a government reshuffle in early August, following the outbreak of protests in Armenia, in an attempt to reduce tensions ahead of the April 2017 parliamentary elections. The prime minister’s resignation is part of this reshuffle. This move tells us that the president is still worried about his government’s position and popular discontent.

Europe: The European Central Bank (ECB) says it will not extend its bond-buying stimulus program past March 2017. What are the potential ramifications in Europe?

  • Finding: The large scale asset purchase program will likely continue until September 2017. This is a measure that the ECB uses to deal with inflation. Asset purchases were first intended to be carried out until the end of March 2017 and “in any case until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.”

Mexico: Mexican Finance Minister Luis Videgaray and other high-ranking officials in the ministry resigned yesterday. President Enrique Peña Nieto seems to be catching a lot of flak for inviting Donald Trump to Mexico. Is this a passing thing or is this going to be a defining issue in Mexican politics going forward?

  • Finding: This will likely continue to be a major issue in Mexican politics up to the U.S. elections. A Trump loss in the elections would easily put this particular issue to rest, as would the emergence of a bigger scandal or disaster. Peña Nieto’s approval rating was only about 30 percent just before the Trump visit and may continue to drop. In addition to Trump, other factors contributing to his low popularity include economic performance, security/violence and general scandal (most recently he was accused of plagiarizing parts of his bachelor’s thesis). The finance minister was seen as the brainchild behind extending invitations for Trump and Hillary Clinton to meet with Peña Nieto, hence his resignation.

Kuwait: Kuwait has a budget deficit of 13.4 percent of GDP this year and expects next year’s to be worse. We spend a lot of time on Saudi Arabia – let’s look at all of the smaller Gulf countries, including Kuwait. Which countries are under strain and which ones potentially can’t handle it?

  • Finding: For the fiscal year ending on March 31, Kuwait recorded its first budget deficit after 16 years of surpluses. Despite having somewhere around $600 billion in financial reserves and overseas investments (one of the oldest sovereign wealth funds), Kuwait plans to finance the $15 billion deficit by borrowing up to $10 billion through international debt markets and a further $6.6 billion from the domestic market. Kuwait estimates that next year’s deficit will be nearly double, reaching $28.9 billion.

Serbia: When is Russian Prime Minister Dmitry Medvedev due to visit? What’s the current status of Serbia in the game between Russia and the U.S.?

  • Finding: Medvedev is due to visit in October. The U.S. has the upper hand for now in the “promises game” that the U.S. and Russia play. While Vice President Joe Biden’s visit in August and the apologies he offered for the civilian lives lost in the NATO attacks were positively received, the U.S. is only supporting Serbia’s EU accession and offers promises to enhance economic relations. Russia, on the other hand, maintains more historical relations and promises closer ties, but Russian economic problems make Serbians wonder if it can deliver anything.

Items from Sept. 7

Germany: German industrial production fell much more than expected in July. What do the numbers look like year to date? Is private consumption proving to not be enough to support the German economy?

  • Finding: Industrial production in Germany fell 1.5 percent in July compared to June. Within industry, production of consumer goods declined by 2.6 percent. In an index where industrial production in 2010 equaled 100, so far this year production began at 111.1 in January and declined steadily to 108.4 in May before increasing slightly in June to 109.6 and declining to 108.0 in July, the lowest level since September 2015. This is an indicator that private consumption is not alleviating Germany’s economic woes.

Serbia-Croatia: A Serbian newspaper says Serbian-Croatian relations are at their worst since 1995 and are in a state of “cold war.” There’s no love lost here, but is there anything behind this newspaper’s assertion?

  • Finding: This is more than the usual back-and-forth between Serbia and Croatia because there is an electoral campaign going on in Croatia, and Serbia has just appointed a new government. The Serbs say that they will not respond to more provocations, so there doesn’t seem to be anything behind the assertion.

Bosnia and Herzegovina-Turkey: Bakir Izetbegović, the Bosniak member of the tripartite presidency of Bosnia and Herzegovina, says ties with Turkey are increasing and that Turkey is on its way to becoming Bosnia’s top foreign investor. What is the current status of Turkish influence in the Balkans? Is Turkey expanding its footprint there in any significant way?

  • Finding: This is not a new trend. Turkey has worked for years to expand its influence in Bosnia. Turkey has had good relations with Bosnia by sponsoring highly symbolic programs. There is a lot of PR around such programs, though Turkey is not a top investor in the country.

China: Chinese banks have cut 35,000 jobs so far this year and are reducing salaries. What is the potential impact of this, if any?

  • Finding: China’s banks are huge, so 35,000 jobs aren’t a big deal. It is a big deal that the banks are feeling the need to tighten their belts even more – revenue is down and non-performing loans are up. This is a confirmation of these pressures.

China: Another month, another more-than-expected drop in China’s foreign exchange reserves. What did the expectations fail to factor in? What is the total drop in reserves for the year now?

  • Finding: The total drop in foreign exchange reserves for the year is roughly $450 billion. Current foreign exchange reserves are slightly under $3.2 trillion. The People’s Bank of China had to spend more than anticipated to support a weak yuan.

Items from Sept. 4-6

Venezuela: More opposition protests are scheduled tomorrow in Venezuela. Are we reaching a critical point?

  • Finding: Yes. The country cannot remain in gridlock forever and the most recent events suggest things are reaching a critical point.

Saudi Arabia-Russia: Riyadh and Moscow have reached some sort of understanding on coordinating oil policy. Russia is burning through its reserve funds. Saudi Arabia’s economy has been eerily quiet in recent weeks. What’s the status of both?

  • Finding: While largely opaque, Saudi Arabia’s economic situation continues on a downward spiral. In July, the country’s foreign exchange reserves dropped to $555 billion – a decrease of $6 billion from June. It was a 16 percent decline over the previous year and the lowest level since February 2012. The kingdom’s economy shrunk by 2.3 percent year-over-year in June. The public has been forced to tighten its belt ahead of the Eid al-Adha holiday that starts next Monday. Electricity bills have doubled during the summer given the cuts in subsidies. The Russian economy is in a bad state. Burning 18 percent of its reserves in a month is a lot. However, it was reported that the Reserve Fund will be completely depleted in 2017, and the Russian government will start tapping the National Welfare Fund to cover the deficit.

India-Pakistan: There has been low-level unrest in Kashmir now for over two months. It isn’t abating and now Pakistani and Indian forces are trading fire across the Line of Control, albeit with no casualties. Is this going to get worse?

  • Finding: Yes, it very well could. The continued protests galvanized by Hizbul Mujahideen commander Burhan Wani’s death on July 8 have been large and include much larger segments of the population than previous outbursts of unrest. And India shows no sign of backing down – Prime Minister Narendra Modi is warning Pakistan and Kashmir that he will take a hard line and a Bharatiya Janata Party spokesperson has said militant groups will meet the same fate as Wani.