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Playing for time in Venezuela
Weekly investor research
06 November 2017
Venezuelan President Nicholas Maduro’s commitment to pay principal on recently matured bonds indicates that he is playing
for time. If he continues to pay coupons he does not face a principal repayment on cross-defaultable bonds until August 2018.
Saudi Arabia’s Crown Prince consolidates power, which bodes well for reforms. Mexico discovers a new oil field as the public
finances improve sharply relative to expectations. Argentina presents a growth enhancing tax reform as S&P upgrades the
sovereign credit rating. Good economic news in both South Korea and Brazil. In the global backdrop Jerome Powell outbids Yellen
in the Fed Chair auction with an unbeatable offer of both easy money and financial deregulation as the Trump tax cut proposal
moves into a more delicate phase.