Less than two weeks after stepping down as U.N. Secretary-General, a move many interpreted as an indication of his intention to run for the Presidency of South Korea, two of Ban Ki-Moon’s relatives have been indicted in the U.S. on charges of bribery. According to the Daily Mail, Ban Ki-Moon’s brother, Ban Ki-sang, and nephew, Joo Hyun “Dennis” Bahn who is a New York real estate broker, have been indicted for an alleged scheme to bribe a Middle Eastern official to use his country’s sovereign wealth fund to purchase a struggling $800 million real estate complex in Vietnam. Joo Hyun Bahn has been arrested in New York City and is expected to appear in court later today according to the office of U.S. Attorney Preet Bharara.
Two relatives of former U.N. Secretary-General Ban Ki-Moon have been indicted on U.S. charges that they engaged in a scheme to bribe a Middle Eastern official in connection with the attempted $800 million sale of a building complex in Vietnam.
Joo Hyun “Dennis” Bahn, a New York real estate broker who is Ban Ki-Moon’s nephew, and his father Ban Ki-sang, Ban Ki-moon’s brother who was a senior executive at South Korean construction firm Keangnam Enterprises Co Ltd, were charged in an indictment unsealed on Tuesday in Manhattan federal court.
Bahn is in custody and expected to appear in court later on Tuesday, a spokeswoman for Manhattan U.S. Attorney Preet Bharara said. Defense lawyers could not immediately be identified.
Hong Kong Chief Executive Leung Chun-ying said he won’t seek a second term. Korea’s parliament voted 234-56 to impeach President Park. Czech National Bank raised the possibility of negative rates to help manage the currency. A Brazilian Supreme Court justice removed Senate chief Renan Calheiros from his post, but was later overturned by the full court. Brazil central bank signaled a possibly quicker easing cycle. In the EM equity space as measured by MSCI, UAE (+6.2%), Poland (+6.0%), and Mexico (+5.9%) have outperformed this week, while Czech Republic (-0.6%), Hong Kong (-0.2%), and China (+0.6%) have underperformed. To put this in better context, MSCI EM rose 2.8% this week while MSCI DM rose 2.8%.
In the EM local currency bond space, Brazil (10-year yield -60 bp), the Philippines (-59 bp), and Indonesia (-40 bp) have outperformed this week, while India (10-year yield +20 bp), China (+5 bp), and Czech Republic (-1 bp) have underperformed. To put this in better context, the 10-year UST yield rose 3 bp this week to 2.41%.
In the EM FX space, BRL (+3.1% vs. USD), COP (+2.9% vs. USD), and CLP (+2.8% vs. USD) have outperformed this week, while EGP (-2.3% vs. USD), CNH (-0.8% vs. USD), and SGD (-0.7% vs. USD) have underperformed.
Hong Kong Chief Executive Leung Chun-ying said he won’t seek a second term. He cited family reasons. The next chief executive will be selected in March by a committee of 1,200. China has veto power over the final selection, and so it’s clear that another establishment leader will be chosen.
The IEA forecast that the surplus in global oil markets will last for longer than previously thought.
Philippine President Duterte called for US troops to leave the southern island of Mindanao.
Relations between Poland and the EU are deteriorating.
Former head of Brazil’s lower house Eduardo Cunha was expelled and banned from public office for eight years.
Brazil’s central bank cut the amount of daily reverse swap contracts sold to 5,000.
In the EM equity space as measured by MSCI, Thailand (+2.2%), Qatar (flat), and Indonesia (-0.1%) have outperformed this week, while Colombia (-4.0%), Brazil (-3.4%), and Taiwan (-3.0%) have underperformed. To put this in better context, MSCI EM fell -2.7% this week while MSCI DM fell -0.9%.
In the EM local currency bond space, South Africa (10-year yield -6 bp), Czech Republic (+1 bp), and China (+1 bp) have outperformed this week, while Hong Kong (10-year yield +20 bp), the Philippines (+18 bp), and Russia (+16 bp) have underperformed. To put this in better context, the 10-year UST yield rose 1 bp this week to 1.69%.
In the EM FX space, ZAR (+0.8% vs. USD), PLN (+0.7% vs. EUR), and CNH (+0.6% vs. USD) have outperformed this week, while MXN (-3.7% vs. USD), KRW (-2.1% vs. USD), and MYR (-1.4% vs. USD) have underperformed.
Brazil’s Supreme Court President Ricardo Lewandowski had held consultations with senators and was ready to schedule the special session for the vote on 11 a.m. local time (14:00 GMT), the Globo news portal reported on Tuesday.
The portal added that if 54 senators voted for the impeachment, Rousseff would be removed from office, otherwise the impeachment would be terminated and she would resume the presidency. In May, the upper house of the Brazilian parliament voted 55-22 to start impeachment proceedings against Rousseff after she was accused of concealing the country’s budget deficit ahead of the 2014 election. Rousseff regards the impeachment proceedings as an illegal coup attempt. Rousseff has been suspended from office for 180 days. Vice President Michel Temer has being fulfilling the functions of the presidency during that period.
Brazil’s economy contracted 5.4 per cent in the first quarter from a year earlier as the country’s deep political crisis paralyses what was once one of the world’s fastest-growing emerging markets.
Data on Wednesday showed Brazil’s gross domestic product contracted for the fifth straight quarter in early 2016, shrinking 0.3 per cent from the last quarter of 2015 – further evidence that the country is heading for its worst recession on record.
However, the figures were better than analysts had expected, with a Reuters poll earlier forecasting a 6 per cent year-on-year contraction and a 0.8 per cent decline from the previous quarter.
Following Dilma Rousseff’s suspension from office last month pending an impeachment trial, the government of interim president Michel Temer has struggled to put Latin America’s biggest economy back on track.
In one of his boldest moves yet, Mr Temer last week proposed a constitutional amendment to freeze future public expenses to tackle the country’s fiscal crisis and win back the trust of the world’s investors.
However, the country’s vast corruption investigation into bribery and kickbacks at oil company Petrobras has threatened to destabilise his government – over the past ten days, two of Mr Temer’s ministers have stepped down over the scandal.
On Wednesday, the Brazilian Senate will vote on whether to suspend elected Brazilian President Dilma Rousseff for 180 days, pending an impeachment trial. The proceedings have been dismissed by Brazilian and international analysts as a political coup intended to implant a pro-business government and implement unpopular austerity measures.
Many believed the proceedings had stalled earlier this week when, in a surprise announcement, acting speaker of the Brazilian congress, Waldir Maranhao, announced an annulment of the April 17 vote to recommend impeachment proceedings to the Brazilian Senate.
Less than 24 hours later, the President of the Brazilian Senate, Renan Calheiros, denounced Maranhao’s call to annul the earlier vote, arguing that the Congress had already abdicated authority to the Senate. Shortly thereafter, Maranhao retracted his own calls to annul the Lower House vote in a historic about-face moment.
Many in Brazil see the impeachment effort as a coup led by the Brazilian Democratic Movement Party, a center-right group that includes Michel Temer, who would assume office if the Senate votes to impeach Rousseff, as well as former speaker of the Lower House Eduardo Cunha, who instigated the impeachment proceedings, and the president of the Senate, Renan Calheiros.
If the impeachment proves successful, the Workers Party, winner of the past four elections in Brazil by landslide margins, would be replaced by pro-austerity and pro-privatization forces that are supported by less than 2% of the Brazilian population.
Update: moments ago the Brazilian Congress began its impeachment vote. 504 members of the lower house of Congress are present for the vote, with nine absent. It appears that the 500+ members of Brazil’s lower house will vote 1-by-1, giving little mini-speeches each time.As we reported earlier below, newspaper surveys showed the opposition has only a few votes more than the two-thirds majority needed among 513 deputies to put Rousseff to trial in the Senate.
As reported on Friday afternoon, ahead of Dilma Rousseff’s impeachment vote to be held in Brazil’s Congress later today, a critical threshold was passed when, according to local Folha newspaper, more than the required 342 votes had been gathered.
Sure enough, today all the main Brazilian newspapers dedicate their entire covers to impeachment, with Folha and Estado bringing nominal list of lawmakers’ expected votes for and against, Bloomberg reports. Furthermore, according to the latest tallies from Folha, Estado and Globo the “For” impeachment vote is currently anywhere between 347 and 350 votes, above the 342 needed.
The mood in São Paulo’s financial district as this weekend approaches has been one of euphoria — somewhere between the glory of a World Cup victory, the buzz of carnival and, as one accountant put it, “that ‘Friday feeling’ times a million”.
On Sunday the lower house of Brazil’s congress is set to vote on the motion to impeach President Dilma Rousseff in a move that her critics hope will spell the end for the former Marxist guerrilla and the markets’ longtime nemesis.
After more allies of the ruling Workers’ Party (PT) deserted Ms Rousseff this week, many now believe her opponents will secure the necessary two-thirds majority to oust her, prompting the senate to follow suit.
As early as next month, Brazil could be under the control of a new market-friendly transition government led by vice-president Michel Temer.
“It seems inevitable that she’ll fall — the very fact that we have got to this point, that the chances of her being impeached are so high, basically means the government is already done for,” says Fernando Góes, an analyst at Clear brokerage in São Paulo.
Paulo Teixeira, a staunch defender of the PT in the lower house, was one of many politicians who took to Twitter this week with messages of defiance.
“Sunday will be a victorious day. We will have at least 200 votes against impeachment. There will be no coup. There will be a fight!”