Economists’ insight: More control over financial risks in China (p. 1)
› The latest data from China suggest that GDP growth should converge towards its 2017 target of 6.5%
› The decline in lending activities and the normalisation of the housing cycle should prevent economic activity from gaining momentum
› A push by the banking supervisory authorities to curtail informal lending is likely to raise the risk profile of smaller banks. Bond yields could start trending upwards
Focus on Brazil: Political risk is back (p. 3)
› Despite the corruption allegations against Michel Temer, Brazil should emerge from recession in 2017
› But the political uncertainty looks set to last, which calls for caution when it comes to Brazil’s growth outlook
› A depreciating real would limit the central bank’s options and threaten the investment cycle recovery
