Venezuela has one of the worst managed economies on the planet and its bonds are trading at levels that suggest a default is priced in. But it is unlikely to default on its sovereign debt this year.
That is not a view widely held in the markets. Prices of credit-default swaps on Venezuelan debt, a form of default insurance, suggest a 60 per cent chance of default in the next year and a 90 per cent probability in the next five years. But investors may well be underestimating the government’s determination to keep paying its debts on time. Read more
The Brazilian real continued its collapse on Monday, passing the barrier of R$3.10 to the US dollar just three trading days after going through the R$3.00 barrier. The currency is at its weakest for more than a decade and has lost half of its value since its peak of R$1.54 to the dollar in July 2011.
There is little reason to expect a recovery any time soon. Read more
** FT News **
* Juncker calls for creation of EU army | European Commission president says collective force will help counter threats to ‘European values’
* Two men charged over Nemtsov murder | Chechen leader comes to defence of suspect Read more
By Taras Kuzio of the University of Alberta
One of the most challenging tasks faced by journalists writing on international affairs is to compare and contrast language used by neo-Soviet authoritarians and western diplomats with reality on the ground.
Foremost is the Orwellian doublespeak habitually used by neo-Soviet leaders such as Russia’s Present Vladimir Putin and Ukraine’s ex-President Viktor Yanukovych. Testifying before the US Senate’s Foreign Relations Committee, for example, Secretary of State John Kerry said Russian officials had repeatedly lied to him and other western leaders over their country’s intervention in eastern Ukraine. Read more