THE WEEK AHEAD
We’ll find out soon whether Israel will squeeze more financial support out of the U.S.,
Is a sustainable thaw between China and Taiwan in store?
In a milestone event, the leaders of China and Taiwan will meet this week, the first such meeting since the creation of the People’s Republic of China in 1949 and its subsequent refusal to this day to recognize the sovereignty of the former Formosa as anything other than a territory of Mainland China. Discussions on a wide range of disputes between the two countries will be conducted not by subordinates, as is customary in a thaw, but by top leaders Xi Jinping, president of China, and Ma Ying-jeou, president of Taiwan.
Will Israel squeeze more financial support out of the U.S.?
Benjamin Netanyahu meets Barack Obama at the White House Monday, begging bowl in hand, requesting as much as a 66-per-cent hike in U.S. military aid to Israel starting in 2018, or a new annual total of up to $5 billion (U.S.). Relations between hardliner “Bibi” and Obama have always been rancid. Lately, Netanyahu has been hyper-alarmist and is opposing the tentative deal by which Iran would give up its nuclear ambitions, a centrepiece of Obama’s foreign policy. And last week, Bibi had to consider rescinding his planned appointment for Israel’s chief of diplomatic relations, who once labeled Obama anti-Semitic.
Will there be a further humbling for Bombardier this week?
At the Dubai Air Show, which runs through Tuesday, any talk of Bombardier will focus on its long-delayed nextgeneration commuter jet, the troubled CSeries. Bombardier’s salespeople might play up Quebec’s recent $1-billion backstopping of a program that is vying with the Avro Arrow has a hard-luck aviation story. Then again, perhaps not, since Justin Trudeau has yet to buckle to pressure to have Ottawa match Quebec’s support. Most likely is that Bombardier will instead hype its Global 7000 private jet, to be assembled at its Downsview plant.
How strict will new regulations on superbanks be?
On Monday, the Basel-based Financial Stability Board (FSB) unveils its rules of conduct for “systemically important” banks. These are lenders so big that their collapse would trigger an encore of the global financial system meltdown of 2008-09. Mark Carney, head of FSB and governor of the Bank of England, will set the bar higher for the “total loss-absorbing capacity” of the world’s biggest banks. Superbanks are likely to be told they have to hold much bigger reserves against potential losses. Bankers will hate this, since additional reserves will come off the bottom line. On Wednesday, Carney will host a day-long conference in London on the FSB and other proposed financial-markets reforms, where speakers will include key regulator Mario Draghi, president of the European Central Bank (ECB). The week ahead
Monday: Earnings include Sotheby’s . . . leading indicators include Canada housing starts (October).
Tuesday: Much-maligned McDonald’s Corp. uses a webcast today to disclose its turnaround game plan . . . leading indicators include U.S. small business optimism (October), China consumer inflation (October), Japan current account balance and France industrial production (September).
Wednesday: With online shopping event “Singles’ Day,” Alibaba Group Holding Ltd. hopes to break last year’s record for sales to bargain hunters, when it generated five times’ the sales of 2014’s Cyber Monday in the U.S. . . . major earnings include Macy’s Inc., Carlsberg A/S, and Pirelli & C. SpA.
Thursday: Major earnings include Manulife Financial Corp., Encana Corp., Cisco Systems Inc., Nordstrom Inc., Kohl’s Corp., Viacom Inc., and SAB Miller PLC . . . leading indicators include Canada new house price index and Brazil retail sales (September), Russia GDP (3Q), Australia unemployment (October).
Friday: The International Energy Agency (IEA) releases its closely watched World Energy Outlook with latest forecasts for global oil supply and demand . . . major earnings include J.C. Penney Co. and Tyco International PLC . . . leading indicators include U.S. retail sales (October), Eurostat’s first estimate of euro-area 3Q GDP, expected to have risen about 0.4 per cent. Hong Kong GDP (3Q), euro-area trade (September).