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Weekly Impact Investment Market Update: October 5, 2018

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Impact Investing & ESG
 

What Global Megatrends Can Teach Us about Impact Investing
Impact investing has been gaining traction in large part because global sustainability megatrends are getting more attention.

How Women are Bringing Impact Investing to the Mainstream
Profits, meet purpose. Companies are being asked to serve a social purpose, here’s how women are positioning impact investing as a mainstream strategy.

Gender Equality: A Potential Driver for ESG Funds
There is plenty of work to be done when it comes to gender equality and investors should favor that work being done because various data points and studies confirm that companies with women occupying c-level executive positions and/or several board spots outperform their less gender diverse counterparts.

Impact Investing: The Billionaires Building Change
Eleven years ago, at a small gathering at the Rockefeller Foundation’s Bellagio Center in Italy, the term “impact investing” was coined. It was not a new idea, but it finally had an official name.

Responsible Investing: Southeast Asia Top Destination for Impact Investments
“Southeast Asia has been the fastest growing impact investing market in the world for the past five years. The region offers dynamic business environments, with increasing entrepreneurial and investment activity focused on ensuring inclusive and sustainable economic development,” says GIIN director of research Abhilash Mudaliar in a media statement.

 

United States & Europe
 

The US Economy is Doing so Great that the Markets are Worried
September was the 96th consecutive month of job gains, the longest on record. The two previous months were revised to show 87,000 more jobs were added that previously reported.

 

Developing Economies
 

These Comfort Charts Signal Year-End Recovery for EM
After a rally from mid-August gave way to another sell-off through early September, emerging-market investors would be forgiven for being wary of new signs that calm is returning.

Goldman Forecasts South Africa Economic Rebound in 2019
Goldman Sachs (GS.N) expects South Africa’s economy to grow almost 3 percent next year, helped by President Cyril Ramaphosa’s reforms and strong global growth, the bank’s sub-Saharan Africa head told Reuters.

Asia’s Economic Ties Strengthen Amid Gathering Global Storm
As reported by the Asian Development Bank, Asia’s (including South Asia) intra-regional trade in 2016 as a percentage of total reached 60%, surpassing that of NAFTA’s 56% (comprising of Mexico, the U.S. and Canada), and is second only to the EU’s 27 member countries at 69%.

World Bank Sharply Cuts Malaysia’s 2018 Growth View
The World Bank Thursday sharply cut its 2018 economic growth forecast for Malaysia to 4.9% from 5.4% and said the expansion pace could steadily decelerate through 2020.

Weekly Impact Investing Market Update: September 28, 2018

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Impact Investing & ESG
 

Champions of Impact Investing
The Rockefeller Foundation coined the term “impact investing” in 2007 to describe private investments that generate a financial return alongside social or environmental impact.

Advocates of Sustainable Investing Puts Climate Change in U.N. Spotlight
As world leaders meet in New York City this week for the United Nations General Assembly, advocates are drawing attention to how climate change should influence investment decisions.

What Holds Investors Back from ESG Investing
ESG adoption level in Asia is still low even though reports and findings have shown that sustainable investing does not hurt returns

How Impact Investors Can Better Serve Communities: Ask Them What They Need
Impact Experience brings investors, foundations, and thought leaders to marginalized communities to find out what the communities think would help.

 

United States & Europe
 

How to Fill the Gaps in the U.S. Economy
What do the internet, nuclear power, GPS, cloud computing, voice recognition and artificial intelligence all have in common? They were all developed with the help of the U.S. government.

 

Developing Economies
 

Kenyan Economy Expands at Fastest Pace in 2 Years on Farming
Kenya’s economy expanded 6.3%, outpacing central bank’s 6.1% estimate. The agriculture sector grew 5.6% in quarter from 5.2% in first 3 months.

Southeast Asia Could Hit $5 Trillion Growth Mark: McKinsey’s Lin
Southeast Asia’s been home to almost half of the biggest growth drivers in the past half-century. To keep investors interested, it’ll have to make the right moves across technology, education and infrastructure, according to Diaan-Yi Lin, a senior partner at McKinsey & Co.

Emerging-Market Rebound Depends on China and India
This year’s sell-off in emerging-markets assets has abated in recent weeks and valuations are tempting, but it’s too soon to say things have bottomed. The key to any rebound is China and India, two economies where the outlook has deteriorated in recent weeks.

Chile Central Bank Considered Increasing Interest Rate
Ultimately policymakers kept the key rate stable at 2.5 percent amid a sustained recovery in the economy under the center-right government led by President Sebastian Pinera.

 

Weekly Impact Investment Market Update: September 21, 2018

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Impact Investing & ESG
 

Why Foundations Should Step Up their Game in Impact Investing
There’s a growing number of people in the world of social entrepreneurship focused on not just building impact-oriented companies, but on creating a more fundamental systemic change.

Impact Investment: Private Equity Puts Its Money Where Its Mouth Hasn’t Been
Impact investing would seem an unlikely business for avaricious private equity funds. But many are embracing what they see as a new opportunity. Should we be skeptical or see private equity’s buy-in as proof of the impact investment concept?

Paving the Way for Greater Impact Investing in Asia-Pacific
While Asia-Pacific foundations are intrigued by impact investing, they combine a range of approaches to create impact in different ways.

Impact Investors Need to Think Big – And It’s Not What They Think it Means
As an industry, impact investing too often gets hung up on creating personalized, perfect impact.

UBS Study: Wealthy US Investors Lag Behind on Sustainability
Wealthy US investors had the slowest rate of adoption in the sustainable investing landscape compared to the rest of the world, according to UBS. The multinational investment bank and financial services company released the latest edition of its Investor Watch report this week.

Investing with a Purpose
Responsible investing, though not a new concept, has only recently gained popularity among a meaningful portion of the investment community.

Is Fixed Income ESG Investing the New Frontier?
ESG investing goes beyond picking the right equities; fixed income ESG can round out an investor’s socially responsible portfolio.

Climate Change, Paris Accords Driving ESG Strategies: Report
ESG’s popularity is taking off, but a significant gap exists between investors’ good intentions and action.

 

United States & Europe
 

Slew of Positive Reports Show U.S. Economy Still on Solid Track
A string of reports on Thursday showed the labor market is getting stronger, consumers are increasingly optimistic and manufacturers are expanding, adding to signs that GDP remains on track for a solid performance in the 3rd quarter.

 

Developing Economies
 

Emerging Markets –Recovery Strong, Hong Kong Dollar Goes Wild
Emerging markets extended their recovery on Friday, as what looked set to be a marquee week for South Africa’s rand and the best day for Chinese stocks in over two years helped sweep away some of the recent gloom.

Emerging-Market Debt Issuance on Ice after Turbulent Summer
Emerging-market debt issuance is on hold after a summer of volatility, with the market effectively closed for borrowers like Turkey and Russia, although Asian and Middle East issuers can still get their bonds to market.

The Future is in Africa, and China Knows It
Fast population growth offers some great investment opportunities, but the West is missing out.

Kenya Ranked Fifth Wealthiest in Africa
Kenya is the fifth richest country in Africa, with much of the wealth concentrated in the hands of a few individuals, a new report has shown.

Southeast Asia’s Production Gains Speed as China Slows
Manufacturing index up 6.2% for first half as companies diversify bases.

Indonesia Set to Grow 5.2% This Year
The World Bank has maintained a positive outlook on Indonesia’s economy despite rising external pressures that may curb growth this year.

The Pacific Alliance: The Four Best Bets in Latin America
The emerging-market sell-off is a buying opportunity for brave investors seeking resilient, well-managed economies with strong prospects. Mexico, Colombia, Chile and Peru fit the bill, says James McKeigue.

Weekly Impact Investment Market Update: September 14, 2018

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Impact Investing & ESG
 

Financing the Sustainable Development Goals: Impact Investing in Action
It is important for impact investors to align existing assets to the global goals; however, there is not enough new capital being channeled into solutions. The UN estimates that USD 5-7 trillion is needed annually to achieve the goals.

Private debt investors look for impact – to reduce risk and lower costs
Private debt – direct business lending from funds rather than banks – has experienced a boomlet in financial markets since the 2008 crisis. Last year, hedge funds, private equity funds and asset managers raised a record $107 billion of capital to lend to businesses to fund growth, buyouts and finance acquisitions.

Making the Case for Impact Investing
For a small but growing number of nextgen high net worth individuals, it is no longer simply investing in another real estate or private equity opportunity in London or New York, they also want to participate in investments that contribute and generate a positive social and environmental impact perhaps closer to home, in addition to generating a financial return.

Impact Investing and What It Means for Financial Advisers
Over the course of the past 20 years, impact investing has grown from a cottage industry to a $9 trillion movement. Your clients are clamoring for it, investment companies are pushing it, but what is impact investing and why is it so essential?

Two-Thirds of Institutional Investors Utilize ESG Policy – Report
Two-thirds of institutional investors and almost half of companies globally have an environmental, social and governance policy in place, according to survey of 1,731 companies and institutional investors, sponsored by HSBC Holdings and conducted by East & Partners.

Most Executives Believe in the Business Case for CSR. So Why Don’t they Invest More in It?
Companies achieve remarkable things. They create products for customers, financial returns for investors, and jobs for employees. At the same time, they develop medications that cure deadly diseases, technologies that bring internet access to every corner of the earth, and by making more and more amenities and technologies easily affordable, they steadily increase our general quality of life.

ESG Outperforms in European Large Caps and U.S. Small Caps
Data compiled by Arabesque S-Ray show companies that score high in Arabesque’s proprietary ESG rating algorithm outperform lower scoring peers, particularly among large-cap European firms and small-cap U.S. firms.

Socially Responsible Investing Gets a Boost from the U.K.
The United Kingdom government will update its definition of fiduciary duty to include “ESG considerations including climate change,” reports responsible-investor.com.

Impact Investing: Advisors Need to Build the Case for Imagining Big Capital
Impact investing is often misconstrued, and misunderstood by investors–especially larger institutional investors–who advance that investing for a resonant social impact is a distraction against investment performance.

A Fixed-Income Investor’s Guide to Impact Investing
Private debt currently comprises more than 40 percent of the capital in the impact investing market, according to the Global Impact Investing Market.

SDGs: Financial Centres Take Cue from UN on Sustainability
Viewed as a commercially viable vehicle for generating profit as well as social good, impact investing is now being facilitated by international financial centres.

 

United States & Europe
 

As Economy Booms, U.S. Cities Report Slowing Revenue Growth
U.S. cities are seeing the growth of their tax collections slow, suggesting local governments’ gains from the more than nine-year economic expansion are diminishing even as they face pressure to spend more on wages, pensions and infrastructure, according to an annual survey by the National League of Cities.

 

Developing Economies
 

Africa: East Africa has Strongest Economic Growth in Africa
Economic diversification and investment-driven growth continue to make East Africa the region on the continent with the strongest economic growth, with a forecast of 6.3% growth in 2018, the latest report from the Institute of Chartered Accountants in England and Wales (ICAEW) has disclosed.

Weekly Impact Investment Market Update: September 07, 2018

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Impact Investing & ESG
 

More Institutional Investors Putting Money on ESG
ESG investing is growing in the U.S. among institutional investors, with issues such as climate change, gender diversity and weapons distribution garnering significant attention.

Impact Investors Should Use U.N. Targets as Investing Guide
The Global Impact Investing Network is urging investors to do more than seek positive social and environmental impact from their investments by asking them to specifically tackle the U.N. Sustainable Development Goals, or SDGs.

ESG Investing: A Blue Ocean for Corporate Employer-Sponsored Retirement Plans
The $28.0 trillion U.S. retirement market offers opportunities for growth in environmental, social and governance (ESG) assets under management (AUM), particularly among corporate-sponsored retirement plans.

4 Mistakes Investors Make with ESG Investing
Successful ESG investing requires more than just picking the best-in-class ESG funds or companies.

Want to Tackle Global Challenges? Think – And Invest – Differently
Impact investing is reshaping financial markets. Hundreds of billions of investment dollars now focus on social and environment challenges.

Value in Virtue: Impact Investing & the Economy
While the purpose of investing is to maximize returns, the allocation of capital also shapes corporate behavior, and that has implications for the economy. When capital is deployed with consideration to factors beyond just financial returns, like contributing to a positive difference in the world…that is impact investing.

 

United States & Europe
 

U.S. Economy Adds 201,000 Jobs as Unemployment Rate Holds at 3.9%
The US has now added jobs every month for 95 months in a row – the longest streak of uninterrupted growth on record. There are signs that the rate is slowing, however, and wage growth continues to lag as it has done since the end of the Great Recession.

N.Y. Fed Raises U.S. Economic Growth View for 2018 Second Half
The New York Federal Reserve on Friday increased its estimates on U.S. economic growth in the second half of 2018 following stronger-than-forecast data on manufacturing sector activities in August, the New York Federal Reserve’s Nowcast model showed on Friday.

 

Developing Economies
 

Rate Hikes in Store for Southeast Asia’s Two Biggest Economies
The outlook for interest rates in Southeast Asia’s two biggest economies is upward even after mixed inflation data on Monday.

It’s Not Time to Hit the Ejector Seat on Emerging Markets
Bailing out of a roller coaster midway through the ride is never a good idea. The same could be said about emerging markets right about now.

Weekly Impact Investment Market Update: August 31, 2018

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Impact Investing & ESG
 

As ESG Investments Boom, Asset Managers Seek Out Fixed-Income Options
Bonds have potential to be a popular ESG asset class for impact investors.

Impact Investing Boom Leads to Verbal Muddle
The word has swung into favor in responsible investing circles in the past few years, and is now used by many different players to mean different things. So far this has not led to any tension, but debates over how the word should be used are likely to intensify in the next year.

SRI, ESG and Impact Investing: A Natural Evolution for Investment Management?
There is some confusion around the terms and methodologies behind SRI, ESG and Impact investing. If they all exist on the same spectrum, where does one begin and the other end?

Former Hedge Funder Seeks to Improve ESG Investing
It’s an age-old investing question. Can you do good and do well at the same time? Ethan Powell is on a mission to prove that you can.

3 Areas of Fixed Income Experiencing ESG Innovations
The focus on environmental, social and governance (ESG) investing has made headway in the form of equities, but investors are also looking at opportunities within the fixed-income space where funds can make innovations to meet this demand.

 

United States & Europe
 

US Economy Logs Best Performance in Nearly 4 Years
U.S. economic growth was a bit stronger than initially thought in the second quarter, notching its best performance in nearly four years, as businesses boosted spending on software and imports declined.

Why the U.S. Economy is Having a Boom
There’s no doubt that the U.S. economy is in a boom. The Conference Board is reporting the highest levels of job satisfaction in more than a decade.

Eurozone Unemployment Falls to Decade Low of 8.2 Percent
Unemployment across the 19-country eurozone has fallen to its lowest level since the most acute phase of the global financial crisis a decade ago.

 

Developing Economies
 

Britain’s May in Kenya to Boost Economic Ties Amid Brexit
British Prime Minister Theresa May on Thursday became the first UK leader to visit Kenya in 30 years, bringing security and development funding to East Africa’s commercial hub and neighboring Somalia as Britain seeks to boost economic ties ahead of a bumpy exit from the European Union in March.

Asia’s Digital Revolution
Asia is embracing the digital revolution. Companies such as Alibaba, Tencent, and Baidu are providing a wide range of services from e-commerce to fintech and cloud computing for customers in China and elsewhere.

Australia, Indonesia Wrap Up Talks on Free Trade Agreement
Indonesia and Australia announced the conclusion of talks on free-trade deals as the Pacific neighbors attempt to boost economic ties.

Weekly Impact Investment Market Update: August 24, 2018

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Impact Investing & ESG

Impact Investing Market Map
The PRI launched the Impact Investing Market Map to bring more clarity to the process of identifying mainstream impact investing companies and thematic investments so that asset owners and fund managers can better assess opportunities in this market.

Should Impact Investors Aim for Market Returns?
Fund houses are increasingly launching impact products to rival mainstream alternatives

American Century Investments Research Shows the Appeal of ‘Impact Investing’ Growing, with Millennials Taking the Lead
“Impact investing”–financial investments designed to generate a measurable, positive impact on society, while also providing potential returns–is growing in popularity.

Why ‘Good Guy’ Stocks Can Help You Beat the Market
Today there’s a growing body of evidence showing that companies that put social responsibility first can also finish first in the market. The question is no longer whether you can do well while doing good, but how best to distinguish the do-gooders.

 

United States & Europe

Powell Signals More Hikes Ahead if US Economy Stays Strong
Federal Reserve Chairman Jerome Powell signaled Friday that he expects the Fed to continue gradually raising interest rates if the U.S. economic expansion remains strong.

 

Developing Economies

Rural Areas and Small Cities Hold the Key to Economic Growth
According to the State of Food and Agriculture report by the UN’s Food and Agriculture Organisation (FAO), the key to achieving the 2030 Agenda for Sustainable Development are transforming rural communities and promoting agriculture.

Nigeria’s Central Bank to Stimulate Lending, Buy Corporate Bonds to Boost Growth
Nigeria’s central bank plans to stimulate lending to manufacturers and invest in corporate bonds to revive the economy ahead of next year’s presidential election.

Southeast Asia Deploys Stimulus to Maintain 5% in 2Q
Indonesia, Philippines and Malaysia try to fend off impact of trade war.

Chile Economy Posts Biggest Jump in Growth in Six Years
Chile’s gross domestic product grew 5.3 percent in the second-quarter of 2018 compared with a year earlier, its biggest jump in nearly six years, the central bank said.

Weekly Impact Investment Market Update: August 17, 2018

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Impact Investing & ESG
 

To Invest for Impact, We Need to Start by Agreeing What ‘Impact’ Means 
Michele Giddens, partner at Bridges Fund Management, explains how the Impact Management Project is the first sector-wide effort to produce a commonly-recognized convention for analyzing and talking about impact.

State of the Small & Growing Business Sector- 2017 Impact Report
ANDE shares the progress of 283 member organizations in over 150 countries that have invested US $14.8 billion directly into SGBs and supported over 730,000 SGBs with capacity development services.

Nudging the Investment Ecosystem by Incentivizing Impact
This paper furthers the conversation on Impact Measurement and Management, IMM 2.0, through brainstorming practical ideas and viewpoints in the impact investing value chain: those who provide capital, those who manage it, and those who receive it.

Climate Change Considerations up Five-Fold over Two Years in Money Manager Decisions
Climate change considerations soared more than five-fold over two years in money managers decisions, a new report by US SIF: The Forum for Sustainable and Responsible Investment revealed.

California Could Be the First US State to Set Quotas for Women on Boards
California legislators have introduced a bill that would require publicly traded companies based in the state to have at least one woman on their board starting in 2020.

 

United States & Europe
 

Powell to Discuss Economy and Monetary Policy at Jackson Hole
Federal Reserve Chairman Jerome Powell will headline this year’s central bank gathering in Jackson Hole, Wyoming on August 24th with a speech about monetary policy in a changing economy.

 

Developing Economies
 

How Technology Can Make South Africa a More Equal Country
South Africa is the most unequal country in the world, according to a recent report published by the World Bank. Technology has the power to help level the economic playing field in South Africa, facilitating more and better access to money and access to jobs.

Indonesia to Impose Import Curbs to Halt Currency’s Slide
Indonesia plans to restrict imports of capital and consumer goods and accelerate the use of biofuel to cut crude oil purchases to stem a slide in the nation’s currency.

Weekly Impact Investment Market Update: August 3, 2018

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Impact Investing & ESG
 

The Rise of ESG & Sustainable Governance in Blockchain
A changing of the guard is taking place right now, as the Baby Boomer generation moves into retirement and Millennials form a growing proportion of total capital investments.

The Rise of B Corps Highlights the Emergence of a New Way of Doing Business
People increasingly want to work for, buy from and invest in companies that have mission and impact at their heart of their model. So for entrepreneurs, there’s an increasingly attractive business case for an impact-driven approach.

ESG in Fixed Interest Doesn’t Have to Cost: Altius
Fixed income investors could use an environmental, social and governance approach to add another layer of risk management and do no harm to portfolio returns, an Australian ESG bond pioneer says.

Report Finds Growing Interest in Impact Investing Among Wealthy Folks in Canada
Impact entrepreneurs seeking funding: You might want to move to Canada. That’s one conclusion you might draw from Market Momentum: Impact Investing & High Net Worth Canadians, a recently released report from SVX, a Toronto-based impact investing platform.

18 Impact Investing Trends You Haven’t Seen Before and 1 You Have
There are 19 trends in the impact investing world that are most likely unknown to you, because they are developing in pockets and corners of the arena where most people don’t have visibility. One or two of these may be familiar to readers who work in the space.

A New Tax Break for Impact Investing Has Arrived
Financial advisers have a new way to deliver impact investing to wealthy clients — one that comes with substantial tax benefits — courtesy of a fledgling federal tax law.

Sustainable Investing for Institutions
Sustainable investing is at once intuitive and confusing; it seems like the right thing to do, but there are many different ways to do it. It promises a contribution to solving global issues, but perhaps at the expense of investment returns. It represents new risks, opportunities, and ways of doing business in a rapidly changing world of finite resources.

 

United States & Europe
 

Fed Leaves Key Rate Unchanged with Economy Growing at ‘Strong Rate’
Federal Reserve officials left U.S. interest rates unchanged and stuck with a plan to gradually lift borrowing costs amid “strong” growth that backs bets for a hike in September.

US Added 157,000 Jobs in July; Unemployment Rate Slips to 3.9%
Over all in July, employers increased payrolls by 157,000, while the unemployment rate edged downward to 3.9 percent, near the 18-year low achieved in May.

 

Developing Economies
 

IMF Staff Concludes Visit to Kenya
A team from the International Monetary Fund (IMF), led by Benedict Clements, visited Kenya from July 23 to August 2, 2018 to hold discussions on the second review under a precautionary Stand-By Arrangement (SBA).

Zambia Committed to Eurobonds; to Pay Debt ‘on Time, in Full’
Zambia is committed to meeting repayment obligations on its Eurobonds “on time and in full,” and comments by the president that it’s seeking help to refinance the securities are not “a signal of failure” to repay the debt, Finance Minister Margaret Mwanakatwe said.

Growth Forecasts Remain Positive for Developing Asia
Asia’s developing economies are on track to register growth of 6% for 2018 and 5.9% for 2019. However, increasing instances of protectionist trade measures from the U.S. and subsequent measures from China have resulted in downside risks to the region’s outlook and could dampen future growth.

Malaysia’s June Export Growth Gathers Pace
Malaysia’s exports growth picked up pace, rising 7.6% in June from a year earlier, thanks to stronger shipments of electronics and demand from China, official data Friday showed.

Weekly Impact Investment Market Update: July 27, 2018

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Impact Investing & ESG
 

The Next Step in Impact Investing: Breaking the Shackles of Extractive Thinking
Those who influence the allocation of capital have an obligation to consider whether current practices solve or perpetuate the challenges impact investing aims to address.

How to Attract the Socially Conscious Investor
Like consumers, investors are voting with their wallets for socially responsible businesses. Here’s how to get their vote.

This Socially Responsible Investor Says What a Company Does is Even More Important than How They Do It
David Fanger is the CEO and founder of Swell, an impact investing platform that helps people invest in equity portfolios that map to the UN Sustainable Development Goals. It identifies high-impact, high-potential companies that are focused on a positive future.

Using ESG Ratings to Build a Sustainability Investing Strategy
The authors, who previously studied sustainability ratings issued by the mass media, now turn their attention on rankings used by the investing community itself.

 

United States & Europe
 

US Economy Growing at Annual Rate of 4.1%, Fastest Pace in Four Years
The US economy roared ahead in the second quarter of 2018, growing at an annual rate of 4.1%, its fastest pace in four years, the commerce department announced on Friday.

 

Developing Economies
 

The Pursuit of Inclusive Growth in Africa
Global growth is projected at 3.9 percent in 2018 and 2019, in line with our April forecasts. But the expansion is becoming less even, and its rate appears to have peaked in some major advanced economies.

In Emerging-Market Rout, Asian Economies are Financially Healthy
Asian emerging economies, particularly those in Southeast Asia, are in a stronger position financially than their global peers to weather risks from rising U.S. interest rates.

Ecuador Economy on Right Track but Reform Follow-Through is Key
Ecuador’s recent turn toward a more market friendly economic policies has lifted investor sentiment toward the Andean country, but follow-through beyond fiscal discipline will be key in order for the positive market reaction to continue.