Daily BriefsMacro

Macro: The Philippines: Scenarios for 2022 Presidential Elections and more

In today’s briefing:

  • The Philippines: Scenarios for 2022 Presidential Elections
  • Biden-Xi Virtual Summit Improved Ties But Risks Remain
  • Malaysia: UMNO Sweep in Melaka Could Herald Early Elections in 1H22
  • Chile’s Market-Friendly Election Outcome Allows Exit from Trade Recommendation

The Philippines: Scenarios for 2022 Presidential Elections

By Nicholas Chia

  • There is a crowded field of presidential candidates for the May 2022 election. With several heavyweights with national appeal contending, much can change in the next few months.
  • Our best guess is that Ferdinand Marcos Jr is likely to win in May. He is leading the polls and his most formidable rival, Sara Duterte, is his running mate.
  • If it comes about, Marcos’s victory will be controversial as memories of his father’s dictatorial rule and corruption are still strong.

Biden-Xi Virtual Summit Improved Ties But Risks Remain

By Manu Bhaskaran

  • The Biden-Xi summit seems to have made more of a difference than first thought. 
  • Talks on strategic nuclear issues, for example, will be held. 
  • However, a brewing confrontation in the South China Sea between the Philippines and China could set back the improvement in ties.

Malaysia: UMNO Sweep in Melaka Could Herald Early Elections in 1H22

By Manu Bhaskaran

  • Melaka is a small state but its demographics are representative of west Malaysia, so the election results give a sense of how the likely general election next year will go.
  • The once-dominant UMNO led BN to romp home with a two-thirds majority. However, a closer look at the voting trends shows that UMNO is not as strong as it seems.
  • The next few months promise to be turbulent. UMNO is likely to press for early elections. There will be factional and leadership ructions within several parties.

Chile’s Market-Friendly Election Outcome Allows Exit from Trade Recommendation

By Gautam Jain, PhD, CFA

  • Chile’s political polarization was apparent in Sunday’s general elections where the two leading candidates for the presidency who are headed for a run-off election are leftist and ultra-conservative. 
  • The markets reacted positively to the elections in which right-wing parties performed well, which allowed me to recommend taking profits on a long Chilean peso vs South African rand trade.
  • While there is room for the peso to continue to outperform, I recommend closing the trade for now as I anticipate market volatility to pick up again.

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