Geo-political risk: It hasn’t gone away
United States: Consumer confidence slows modestly
Explosion in M&A deals tells its own story
The week ahead: Important week for the Eurozone
Markets are selling off today as the world begins to reassess the significance of geo-political risk from Ukraine, to Iraq, Thailand and Gaza. For years now, geo-politics has been discounted and rarely seen as a reason for worry. This is largely because easy money has been a soothing balm to any concerns, driving markets higher, reducing perceived risk and underwriting worries.
With the EU and Russia now possibly on a sanctions collision course, geo-political risk is once again something to be considered by investors.
It was only last week that the 6th annual BRICS summit was held in Brazil. The latest events can only raise further questions about Russia’s membership in the club.
Europe is very exposed to Russia. Mineral fuels make up more than three quarters of EU imports from Russia in 2012, while exports of machinery and transport equipment made up almost half of EU exports to Russia. These kind of skewed trade figures are archetypal of the trade balance between a First and Third world country and not what one would expect from a country that puts the ‘R’ in BRICS.
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