To build the Global Macro Scoreboard, we identified 34 issues driving global markets (see the master list at the bottom). We then built a signal for each based on digital traffic (in every available language) relevant to that issue. The Scoreboard shows which signals correlated most strongly to a master signal covering all of the issues. (The strength of that correlation is represented as a percentage on the vertical axis). In other words, the Scoreboard displays the 16 issues that this week garnered the most attention in the overall conversation online.
A week-to-week comparison shows which issues are rising and falling in significance. Below we highlight some of this week's top stories and surprising movers.
It's Never Too Early to Start Worrying about a Debt-Ceiling Showdown
Healthcare reform drew a lot of attention this week, with John McCain's dramatic no-vote to kill the Senate's barebones repeal bill and reports of bipartisan cooperation to shore up the insurance markets President Trump threatened to allow fail. Interest in tax reform fell slightly but remained an issue of global interest.
But the most surprising story in U.S. policy was the return of a perennial legislative bugbear: the U.S. debt-ceiling. The nation won't exceed its borrowing authority (nearly $20 trillion) until October. Yet the subject gained 63 percentage points on our scoreboard in the last two weeks — the greatest gain of all 34 macro issues we follow. With Republicans in the Senate and House reportedly divided over when to pass a debt-ceiling increase bill, Treasury Secretary Steve Mnuchin is already pressing Congress to approve a clean, rider-free hike by September 29. He is right to fret. In the Obama era, House conservatives played chicken with a default to try to force spending cuts.
EM Presidents in Peril
The macro story drawing the most engagement this week was the fate of Jacob Zuma, South Africa's long-embattled president, who faces a no-confidence vote on August 8. The vote was called after Zuma sacked respected Finance Minister Pravin Gordhan, a move that triggered a country credit rating downgrade to junk. Leaders in the ANC expect Zuma to survive the vote, but our signals give reason for uncertainty.
In Brazil, Congress voted not to send a bribery case against President Michel Temer to the Supreme Court. The outcome indicated that the abysmally unpopular Temer still retains control over a sizable coalition in the legislature. Some observers, however, noted his support was weaker than expected and questioned his ability to push through remaining economic reforms. Moreover, Brazil's prosecutor general is likely to bring fresh indictments against Temer in the coming weeks. Still, markets reacted positively to the vote, and our signals have suggested Temer is more resilient than many give him credit for.
A Market-Friendly Grexit and Gre-entry
Discussion around Greek debt more than doubled its score as two rare pieces of good news for Greece's economy broke in as many weeks. On July 12, the European Commission recommended Greece's exit from the Excessive Deficit Procedure, signaling the end of Brussels' increased scrutiny over Athens' budget. Then last week, Greece reentered global debt markets, holding its first public debt auction in three years. The government raised €3 billion in five-year bonds at a rate of 4.62%. Concerns do persist: the ECB has not yet said that Greek bonds meet the criteria for purchase in the bank's QE programs. Still, Greece is a surprising bright spot on this week's Scoreboard.