The items listed below represent potential emerging issues that our analysts are tracking. These can be long term or short term, but will be updated daily. If an item on our Watch List becomes critical, we will email you a full analysis explaining its significance.
Each Saturday, we will follow up our daily Watch List for each week with our conclusions on these issues.
- United States: The U.S. yield curve, which measures the spread between short-term and long-term debt issued by the United States, is flattening. Some large institutional investors are moving to safer securities in exchange for lower returns. Our 2017 forecast said that by end of year the first signs of a cyclical recession in the U.S. would emerge, and this is a big sign. We need to look into why the yield curve is flattening, whether any debt asset classes particularly vulnerable right now, and what the global ramifications of a recession would be.
- Russia, U.S.: A Russian presidential aide and a U.S. special representative for Ukraine met on Nov. 13 in Belgrade. It was the officials’ third meeting. The Russian aide said they discussed the potential deployment of a U.N. mission to eastern Ukraine and that both sides were working to close the gap between their positions. This development is tied to our forecast of a formalization of the conflict as a frozen conflict in Ukraine. Let’s keep an eye on these negotiations.
- Philippines: The Philippines and India signed a slew of agreements, including a limited defense agreement, during a meeting between the Philippine president and the Indian prime minister on the sidelines of the Association of Southeast Asian Nations summit. The agreements are notable in that India is poking around in China’s backyard. We need a better sense of what end game India sees here. Also, the Philippines and the United States reaffirmed their commitment to the 1951 Mutual Defense Treaty and the Enhanced Defense Cooperation Agreement during a meeting between U.S. President Donald Trump and Philippine President Rodrigo Duterte. What matters with the EDCA – the agreement that allows the U.S. to rotate troops through and station some materiel at a number of Philippine bases – is how it’s implemented. Let’s find out if there are changes on this front.
- Lebanon: According to Reuters, Lebanese businessmen and politicians have said that they fear that Saudi Arabia’s next move will be to gather a coalition of Arab states to isolate Lebanon, the same way it isolated Qatar earlier this year. Can Saudi Arabia actually do this? What kind of economic leverage does Saudi Arabia have over Lebanon, and could any other country fill the gap?
- North Korea: A U.S. official involved in back-channel negotiations with the North Koreans has noted that almost 60 days have passed since North Korea last tested a missile. There has also been a slight change in the South Korean president’s rhetoric about what is on the table for negotiation with the North Koreans should Pyongyang agree to a formal freeze of its nuclear program. Is there a real diplomatic breakthrough coming here, or is this more of the same?