Group 1 - The article discusses the political and economic turmoil in Indonesia following the election of President Prabowo, highlighting public dissatisfaction with government policies [6][8] - Prabowo's economic policies aim for an 8% GDP growth while avoiding fiscal deficits, which has led to tension among the elite and dissatisfaction among vulnerable groups [6][7] - Specific policies, such as providing free lunches for students, have faced criticism due to budget constraints and perceived inequities, leading to further unrest [7][8] Group 2 - Historical context is provided, comparing current events to past political upheavals in Indonesia, particularly in 1965 and 1998, where elite power struggles were masked by public dissent [13][17] - The article suggests that the current unrest is driven by economic decline and internal elite conflicts, with the potential for manipulation of public sentiment by political factions [13][18] - The dynamics between political factions, including Prabowo, Jokowi, and opposition groups, are analyzed, indicating a complex interplay of power and public support [19][20] Group 3 - The potential outcomes of the current political situation are discussed, with Prabowo possibly consolidating power while navigating opposition from both Jokowi and other factions [25] - The article posits that despite the turmoil, there is a foundational logic in Indonesian society that seeks stability, suggesting that the ultimate outcome may not be as dire as it appears [25]

Group 1 - The core viewpoint of the article is that after 2020, the fiscal policies of the US, Europe, and Japan have shifted towards proactive expansion, marking a new era of fiscal activism that directly influences their economic strength and stability [1][6][64] - The fiscal policies of developed economies are no longer limited to being passive stabilizers; they are now actively guiding economic development, particularly in sectors like semiconductors and defense [1][6][64] - The tolerance for high deficits has increased among Western countries, with the US political parties showing a narrowing gap in their attitudes towards fiscal deficits, and Japan delaying its budget surplus targets [1][6][15] Group 2 - The correlation between fiscal deficit rates and GDP growth rates has been established, indicating that higher deficits lead to higher GDP growth. The US has benefited the most from this trend, with its GDP growth outpacing that of the EU by 4 percentage points from 2019 to 2023 due to stronger fiscal stimulus [2][20][64] - The US is expected to extend and expand tax cuts and defense spending through the "Inflation Reduction Act," with an anticipated deficit rate of around 7% next year [3][25][34] - Europe is shifting towards a more expansionary fiscal stance, increasing defense, infrastructure, and clean energy spending, with Germany establishing a special fund of €500 billion to support these initiatives [3][34][38] Group 3 - The expected economic growth rates for the US, Europe, and Japan in the coming year are projected to be 2.0%, 1.2%, and 0.5% respectively, with the US maintaining a lead in growth due to its fiscal policies [4][56][64] - Germany is expected to see a significant improvement in its GDP growth rate, projected to increase by 0.9% in 2026, driven by its relaxed fiscal stance and increased defense and infrastructure spending [4][56][64] - The fiscal multiplier effects are anticipated to be strongest in the US, with a projected impact of 0.6% on GDP growth, while the effects in Europe and Japan are expected to be weaker at 0.2% and 0.1% respectively [4][52][56]

Core Viewpoint - France is facing a significant political and financial crisis due to Prime Minister François Bérou's proposed €44 billion austerity plan, which aims to reduce the budget deficit but has met with widespread opposition and market panic [1][2][3]. Financial Situation - The French government plans to reduce the budget deficit from approximately 5.8% in 2024 to 4.6% by 2026, with measures including the cancellation of two national holidays, which has sparked public outrage [2][4]. - France's public debt has exceeded €3.34 trillion, representing 113.9% of GDP, and the country has the third-highest debt level globally, trailing only the US and Japan [4][5]. Market Reactions - Following the announcement of the austerity plan, the Paris CAC 40 index fell by about 1.7%, and the yield on 10-year French government bonds surged above 3.5%, nearing Italian levels [2][3]. - Concerns about the potential collapse of the government have led to fears of increased financing costs, with warnings that France could soon have higher costs than Italy if the situation deteriorates [3][4]. Economic Challenges - The French economy is projected to grow at around 1% this year, significantly below pre-pandemic levels, with consumer spending and investment hampered by limited purchasing power and uncertainty [5][6]. - The International Monetary Fund (IMF) has indicated that France needs "additional significant budget efforts" to avoid losing control over its debt trajectory [5]. Broader Implications - The rising yields on French debt could have repercussions for the global bond market, as France is a key player in the Eurozone, and any instability could affect investor confidence in the euro [6][7]. - The situation raises questions about whether Paris could become the center of the next European financial crisis, especially given the lack of consensus in the political arena [6][7].

Core Points - The French government is facing a potential collapse as Prime Minister Francois Bayrou announced a confidence vote, which could occur next month, leading to significant investor sell-offs of French assets and increased hedging against political uncertainty [3][4] - The political landscape is precarious, with opposition parties, including the far-right National Rally and the left-wing "Unsubmissive France," indicating they will vote against the motion, potentially resulting in Bayrou's resignation if the majority opposes him [3][4] - France's 10-year government bond yield rose by 9 basis points to 3.51%, leading the global bond market decline, with the borrowing cost differential between France and Germany widening to 75 basis points, the highest since April [3][5] Economic Context - Bayrou's push for a confidence vote is part of a broader strategy to consolidate support for a €44 billion (approximately $51 billion) spending cut and tax increase plan, which he deems essential to avoid a public finance disaster [5][6] - The French government is currently facing the widest budget deficit in the Eurozone, with the finance minister projecting a deficit of 5.4% of GDP for the year, but warns that a government collapse could lead to borrowing costs exceeding those of Italy within two weeks [5][6] - Bayrou's efforts to gain public support, including launching a YouTube channel to explain fiscal policies, have not significantly improved his approval ratings, which have fallen to the lowest level for any prime minister during Macron's presidency [6]

Core Viewpoint - The French government led by Prime Minister François Bayrou is facing increasing opposition, with three major opposition parties indicating they will vote against a confidence motion, potentially leading to the government's downfall as early as next month [1][3]. Political Situation - The political crisis has caused market volatility, with the French CAC 40 index dropping over 2% for two consecutive days, and the spread between French and German 10-year bond yields nearing its highest point since April, reflecting renewed investor concerns about France's fiscal situation [1][4]. - President Macron is in a difficult position with limited effective solutions, including appointing a new prime minister or dissolving parliament, both of which carry significant risks [3][4]. Government's Fiscal Plan - The government initiated a confidence vote to gain parliamentary support for a fiscal plan that includes €44 billion (approximately $51 billion) in spending cuts and tax increases, which Bayrou believes is crucial to avoid a fiscal crisis [4][6]. - The proposed plan also includes controversial measures such as the cancellation of two public holidays, which has faced strong opposition [4]. Economic Context - Unlike other Eurozone countries, France's public finance recovery has been slow, with the National Audit Office criticizing the government for being overly optimistic about tax revenues and economic growth while failing to control rising expenditures [6]. - France's debt interest payments are projected to exceed €66 billion this year, surpassing spending in other sectors like education, and are expected to rise to €75 billion by 2026 [6]. Market Reaction - The yield on France's 10-year government bonds has reached the highest level in the Eurozone, even surpassing countries like Greece and Portugal, indicating a significant increase in borrowing costs [8]. - The CAC 40 index has declined over 4% since Macron's unexpected announcement of early parliamentary elections last June, contrasting with a 6% increase in the broader European Stoxx 600 index during the same period [9].

Core Viewpoint - The article discusses the significant decline in the French stock market, driven by political instability and the potential collapse of the French government due to a confidence vote initiated by Prime Minister Francois Bayrou [2][3]. Political Instability - Prime Minister Bayrou announced a confidence vote that could lead to the government's downfall, prompting investors to sell French assets and increasing hedging against political uncertainty [3]. - Opposition parties, including the National Rally, La France Insoumise, and the Greens, have expressed intentions to vote against the motion, while the Socialist Party also indicated non-support [3]. - If the majority of lawmakers oppose Bayrou, he will be forced to submit his government's resignation, highlighting President Macron's precarious position [3]. Economic Impact - The yield on French 10-year government bonds rose by 9 basis points to 3.51%, leading the global bond market decline, with the spread between French and German borrowing costs widening to 75 basis points, the highest since April [3]. - France's borrowing costs are now higher than those of Greece and Portugal, only slightly lower than Italy [3][4]. - Bayrou's proposed austerity measures, including a €44 billion (approximately $51 billion) spending cut and tax increase plan, face significant opposition, which he argues is crucial to avoid a public finance disaster [4]. Public Sentiment and Government Response - Bayrou's approval ratings have plummeted to the lowest level among all prime ministers during Macron's presidency, despite efforts to engage the public through a YouTube channel explaining fiscal policies [5]. - The French government is currently facing the widest budget deficit in the Eurozone, with a projected deficit of 5.4% of GDP for the year [4].

Group 1 - Economist Alexis Puete warns that the dollar exchange rate in Argentina may exceed 1500 pesos by the end of the year, criticizing the government's policy of suppressing the dollar rate at all costs [1][2] - The current economic situation is described as a "defensive liquidity syndrome," where banks prefer to maintain liquidity rather than pursue profitability, raising questions about the logic of government policies [1] - High interest rates paid by the government to banks, reaching up to 60%, with collateralized loans at 74% and overdraft rates at 80%, are highlighted as a significant concern [1][2] Group 2 - Puete predicts that the pressure on the dollar will soon be felt, particularly impacting supermarket prices due to the dollar component in all goods [2][3] - The Argentine economy faces multiple challenges, with the government attempting to control inflation and stabilize the exchange rate while dealing with significant fiscal tightening pressures [2][3] - The warning reflects long-standing structural economic issues in Argentina, including high inflation, exchange rate instability, and fiscal deficits [2]

Macro Factors - UBS highlights concerns over rising populism leading to irresponsible fiscal policies, estimating a need for a 3% GDP fiscal tightening to stabilize the US government debt-to-GDP ratio [2] - Bank stocks perform better relative to other sectors during rising bond yields, with their performance closely tied to the steepening of the yield curve [2] - The growth of private sector loans is rebounding in Europe, particularly in corporate loans in France and Italy, with UBS's macro model indicating European bank stocks are currently fairly valued [2] Valuation Insights - Bank stocks in Europe and the US are trading at approximately 10% below their long-term average P/E ratios, with UBS suggesting that the cost of equity in Europe is too high at 11.6% compared to 8.8% in the US [3] - A 20 basis point increase in default loss rates or a drop in interest rates below 1% would be required to achieve the estimated 10%-14% EPS downgrade already factored into valuations, which UBS believes is unlikely [3] - UBS maintains global GDP growth forecasts at 2.9% for 2025 and 2.8% for 2026, indicating a stable economic outlook [3] Reasons for Revaluation of Bank Stocks - Banks have demonstrated stronger resilience during the current downturn due to stress tests, high capital requirements for risky loans, and strict regulations [4] - Non-macro headwinds have significantly diminished, with deleveraging nearly complete and a reduction in litigation and fines against banks [4] - The risk of disruption from emerging technologies has decreased as these "disruptors" face stricter regulations and some have been acquired by traditional banks [4][5] Tactical Considerations - The banking sector is not overly crowded, ranking 8th globally and 9th in Europe in terms of sector crowding [6] - Earnings expectations for the banking sector are improving, with UBS ranking it 2nd in Europe and 5th globally for earnings revisions [6] - The banking sector is not severely overbought, with current overbought levels at one standard deviation, typically leading to outperformance [6] Recommended Banks - UBS recommends several banks across different regions, including BAWAG, ING, Standard Chartered, Barclays, and Intesa in Europe/UK, and Citizens Financial, KeyCorp, and Webster Financial in the US [7] - The selection criteria focus on countries nearing the end of interest rate hikes or those with high rates expected to decrease, as well as banks in strong currency countries [7] Strategic Preferences - UBS's global equity strategy team favors retail banks in Europe, select emerging market exposures, US investment banks like JPMorgan, and Japanese banks [8] - The preference for US banks is weaker due to anticipated domestic demand slowdown and faster-than-expected interest rate declines [8] - UBS identifies banks with a consensus "sell" rating but positive earnings revision trends, such as the Canadian National Bank and ABN AMRO, as potential investment opportunities [8]

Core Points - The signing of the controversial spending cut bill by President Trump on July 18 officially rescinds $9 billion in foreign aid and public broadcasting federal spending [1] - The bill is seen as a continuation of the budgetary conflicts between the two parties following the passage of the "One Big Beautiful Bill" in June, reflecting Trump's political victory in budget and administrative leadership [1][2] Group 1: Budget Reconfiguration - The "One Big Beautiful Bill" allocated over $2 trillion for defense, infrastructure, and social security, with Republicans compromising on some Democratic social spending and international aid [2] - The spending cut bill aims to address dissatisfaction within the Republican Party by reclaiming previously compromised fiscal expenditures, serving as a tool for the Trump administration to demonstrate fiscal tightening [2] - The bill is part of a two-phase budget negotiation process, with the first phase being the bipartisan compromise of the "One Big Beautiful Bill" and the second phase focusing on internal Republican priority restructuring [2] Group 2: Impact on Foreign Aid - The spending cuts primarily affect humanitarian, global health, food security, and climate aid projects under the U.S. Agency for International Development (USAID), including contributions to UN peacekeeping and climate funds [2][3] - The UN Secretary-General's office warned that U.S. aid cuts would directly impact the world's most vulnerable populations, with potential project suspensions and disruptions in food and medicine supplies for recipient countries [3] Group 3: Public Broadcasting Cuts - Federal funding for public broadcasting, which is allocated to the Corporation for Public Broadcasting (CPB) and subsequently distributed to NPR, PBS, and local stations, is significantly impacted by the cuts [4] - Although the federal budget for CPB is only $535 million, it represents about 4% of NPR's and 15% of PBS's funding, crucial for maintaining over 1,400 public broadcasting stations, especially in rural areas [4] - The cuts threaten the operational viability of local stations that rely on federal funding, potentially affecting public service delivery in underserved communities [4] Group 4: Political Debate and Division - The spending cut bill has sparked intense debate, with Republicans framing it as a commitment to "shrinking government," while moderate Republicans and Democrats express concerns over its implications for public health and local media [6][5] - The bill passed narrowly in both the House and Senate, highlighting deep divisions within the Republican Party and between the two parties regarding fiscal priorities and social services [6][7] - The swift signing of the bill by Trump was necessary to avoid automatic funding reinstatement, marking a significant political maneuver amid ongoing budgetary conflicts [7]

尽管公共预算吃紧，法国总统马克龙仍于当地时间7月13日宣布，将进一步提升法国国防预算投 入：未来两年将在原有预算基础上增拨约65亿欧元。这一计划原定于2030年实现，现在提前至2027年。 应对安全考量 法国经济部长隆巴尔在出席2025年艾克斯经济论坛时警告，7月4日起法国的利率已高于意大利，提 醒法国人注意国家债务问题。 不止是法国，其他欧洲国家也在计划扩大国防预算。英国希望到2027年将国防预算增至2.5%， 2029年后增至3%。德国的目标是到2029年将国防预算提高到1620亿欧元，占其国内生产总值的3.5%。 波兰已经将GDP的4.7%用于国防。 法国加速扩军计划正深度重构欧洲安全格局。此举与德国将军费提至GDP的3.5%形成战略联动， 试图在美国暂停对乌援助背景下填补"安全真空"。 马克龙更突破传统核政策，命令法国高级军事和国防官员与欧洲伙伴展开"战略对话"，探讨法国核 武库在保护欧洲方面可能发挥的作用。法国和英国近日已达成一项特殊协议，同意在核防御问题上进行 合作。 财政重压难免 马克龙公布加码国防预算的计划，正值法国财政承压之际——政府计划在2026年节省约400亿欧元 支出，以达到欧盟要求的 ...