Thursday, 12 September 2019

Likely rate cut by European Central Bank

European Central Bank monetary policy announcement scheduled today is one the most important event risks of the week. Analysts should not be surprised if EUR/USD pair broke below 1.10 ahead of this rate decision.

Investors have big expectations for this meeting because of widespread deterioration in the Eurozone economy and talk of recession in Germany. EUR hit a 2-year low last week against the USD as German bund yields tumbled deeper into negative territory.

Back in July, Mario Draghi, Chief of European Central Bank brought up the benefits of a combination of measures and since then the need for stimulus intensified. While investors are preparing for a massive dose of stimulus, there's also a reasonable chance the ECB may under deliver.

The Eurozone economy needs help. Retail sales, inflation, employment and manufacturing activity slowed across the region and in Germany, growth contracted in the second quarter. The region's largest economy is crippled by weak global growth and a collapse in manufacturing. Not only did the PMI manufacturing index fall for the eighth month in a row but it reached to its weakest level in 7 years.

The Bundesbank said there's a very good chance that Germany will fall into a technical recession in the third quarter. With a tense trade war and weakening US and global growth, the grim outlook for the region is why the ECB needs to find ways to stimulate the economy.

The European Central Bank has many options including a rate cut, stronger forward guidance, a new program of asset purchases and compensation for banks to relieve the negative effects of negative interest rates. They prefer a combination of measures because they feel that a package is "more effective than a sequence of selective actions."

The market expects a minimum of a 10bp rate cut. If the central bank combines this with rate tiering or a new Quantitative Easing program, EUR/USD will sell off aggressively but if all they do is cut rates and strengthen their low rate pledge, euro will soar in disappointment.

With EUR so weak, less aggressive measures could trigger a sharp short squeeze in the currency. Unfortunately, there's resistance to a package that includes QE - one of the strongest forms of easing.

Bank of France Governor Villeroy is skeptical of the immediate need for QE while German and Dutch policy makers also believe its too early for the move.

Given the market's lofty expectations, EUR/USD traders could be setting themselves up for disappointment. Draghi could also opt for a stimulus package that does not include the most aggressive measures to leave his successor Christine Lagarde with ammo to fight a deeper slowdown.
  

Friday, 6 September 2019

Rising mental disorder in young Israelis


Nearly three-quarters (73%) of Israeli children aged between 13 to 18 experience some sort of a mental problem or crisis, according to a survey carried out by Enosh – The Israeli Mental Health Association.

The research, which surveyed 500 teenagers and 500 parents of teenagers, found that 78% of teenage girls reported previous mental health issues, compared with 66% of teenage boys. Almost one-third of respondents (32%) said they had experienced mental health problems on at least three separate occasions.
The survey was carried out to coincide with the opening of the “headspace” center in Jerusalem, a facility designed to assist young people aged 12 to 25 who are experiencing mental health issues. Treatments are provided free of charge, and are supervised by the health, welfare and education ministries.

A total of 45% of teenage respondents said they believed or were certain that they would not seek treatment or counseling if they experienced a mental health problem. Only 12% said they would certainly seek treatment or counseling. Willingness to turn to professional help was higher among those 13-14 than those 15-18, the survey revealed, and higher among secular respondents than religious teenagers.

The first source of assistance that teens said they might turn to was a psychologist (48%). Approximately one-third (34%) said they would first approach a school member, and only 17% said they would turn to their family physician. Older teenagers were increasingly likely to turn to psychologists and doctors than school staff.

The leading barrier to receiving treatment was fear of shame, 40% of teenagers said. Other obstacles include the belief that treatment does not help (38%), fear that treatment will negatively impact their future (24%), and that treatment is too expensive (23%).

“The statistics prove that mental health is an issue that affects all of us,” said Enosh executive-director Hilla Hadas. “It’s not a niche issue that matters to only a few, but rather to the wider public.”

The vast majority of patients (94%) said they would probably or definitely refer their child for treatment if they experienced a mental health problem or crisis. Parents expressed a preference for referring their child to private treatment (59%) rather than the public health system (23%). A further 16% of parents said they had no preference, while 2% said they would choose another form of medical assistance.

“It is encouraging to see that Israeli parents understand the importance of mental health care when it comes to their children,” said Hadas. “It is of critical importance to seek assistance in the case of mental health, and we must ensure that there are no barriers preventing teens from receiving help and care at such a critical stage in their lives.”


Monday, 2 September 2019

Is the world ignoring Iran Israel tension?


Media across the Middle East during this past week was focused on Israel-Iran tensions, including inflammatory comments from Beirut to Baghdad about the war on the horizon. Yet much of the tension failed to attract the attention of international community. That doesn’t mean that behind the scenes the US, France and others were not working to calm the issue, but it does appear that most did not take the crises seriously.
The reason is that in Europe is engrossed Brexit, while Trump-centric news cycle spent time wondering if the US would buy Greenland, or if hurricanes would be nuked, or if the G7 would hold a meeting with Russia at a Trump resort.
In addition, there are protests in Hong Kong and a crisis in Kashmir. These are important issues, some of them with ramifications as important as what is taking place in the Middle East. Pakistan and India, for instance, have nuclear weapons.
The airstrike by Israel on 24th August, and Hezbollah’s claims that it downed Israeli drones on August 25, also did not lend themselves to much of a crisis. A few little drones that looked more appropriate for a wedding planner and an airstrike where only a grainy video seems to underpin Israel’s claims of “killer drones” is not major news globally.
Also, the allegations of Israeli airstrikes in Iraq are opaque. Some storage containers blew up, but there are not many details. And there is fatigue in Western media for stories about violence in the Middle East. In addition, the US is trying to end the Afghan war in the coming months, a war that also gets almost no media attention anymore.
Nevertheless, the Israel-Hezbollah tensions and US-Iran tensions have major ramifications. Jerusalem has said that Tehran is entrenching in Syria, and that it sends precision guidance technology to upgrade Hezbollah’s arsenal of 130,000 missiles. Hezbollah says it can strike all of Israel. Iranian-backed Shi’ite paramilitaries in Iraq are important, as is their long-term affect on Iraq and the region. Hezbollah holds the US and Israel responsible.
That could have an impact on US-Iraqi relations, and the long-term strategy to defeat ISIS. It is no surprise that ISIS is trying to expand again in Syria and Iraq with small attacks. Baghdad has launched major offensives to crush the ISIS networks, but Iraqis are dying in these battles every day. These tensions also relate to other tensions in the Gulf, as well as between Saudi Arabia and Houthi rebels in Yemen.
The Houthis tried to use drones or rockets to attack Saudi Arabia almost every day over the last week. These conflicts are linked, from Hezbollah to Houthis to Iraq and Syria. Yet they are so complex and have so many different leaders and groups involved that many feel they are too complicated to understand.
Outside of simple binaries like “Hezbollah vs. Israel” or “Iran vs. America,” the story is difficult to explain. Trump’s comments about Greenland, or Boris Johnson suspending parliament, seem easier to understand. A million people protesting in Hong Kong seems more important than two Hezbollah operatives killed.

Saturday, 31 August 2019

Deal of Century or an attempt to remove Palestine from world map


The United States believes that “Deal of Century” should create a strong barrier against Iran’s expansionism and must secure interests of US and Israel in the region. Arab countries should pay US$50 billion to US and Israeli companies with regard to Kushner’s plans and prosperity of Palestine. 
Several resolutions and agreements have been signed between Israel and Palestine since 1967 in the process of Peace Talks, the solution of two states, one government, and even confederation have been included in these agreements. In this regard, each of former presidents of the United States presented a peace plan to solve the problem and this time, it was Trump’s turn. 
The family of Donald Trump and Jared Kushner formulated and compiled the ‘Deal of Century’. It was not considered important that the differences between Palestinians and Israelis are a difference in the width of history and in the extent of ideological differences. 
In formulation of the ‘Deal of Century’ not attention was paid to the issue that resolving problem of Israel with the Islamic countries is not the problem that is confined or limited only to the United States or Israel.
From the political point of view, the issue is not even comprehensible for them, despite all international efforts and political initiatives taken in the recent decades, resolving this crisis has become more complicated with the passage of time. 
The situation in Palestine is tied with the Resolution 242 of the United Nations inked in 1967, stipulating that Israel must withdraw from the Golan Heights, Jordan River, Gaza Strip, and the West Bank. The resistance of Palestinian people, which began with the throwing of stone, has now been turned into resistance with the power of deterrence that owns pinpointing rockets and missiles. 
Even if the Palestinians relinquish their inalienable rights, the future of Bait Al Muqaddas (Jerusalem), as the first Qibla of Muslims and the Ascendant of the Holy Prophet of Islam as well as Palestinian citizenship within a ‘geographical area under Israeli mandate’ will turn the Palestinian problem from a territorial problem into an ideological and trans-regional problem. Such a situation would add to the desire Palestinians for more resistance and also would confront Israel with new trans-regional political and armed groups as well. 
Jared Kushner unveiled the plan of ‘Deal of Century’ to the representatives of Arab and European countries in Manama, capital of Bahrain on 25th June 2019. In this initiative plan, Kushner considered economic solution as ‘alternative’ of political solution for ending the conflict between the two parties, Palestine and Israel. In the opening remarks of the ‘Deal of Century’, he clearly put the value of land and territory of Palestine and its identity at US$52 billion. By insulting the Palestinians and their struggles, he called Palestinians as people who have lived without understanding what the peace means.
In the ‘Deal of Century’, Kushner defines Palestine as land and territory which is confined to a geographical area without a nation, government, army and also conceptual boundaries. Moreover, in his defined project, Kushner said that Palestine is an area in the West Bank and Gaza Strip that are connected with each other through railway. This area is supposed to be managed and administered by multinational companies whose staff is from the people of Palestine under the strict supervision of the United States and Israel. In Kushner’s plan, people of Palestine have been supposed as ‘unable, unhealthy’ people and emphasized, “We need a healthy economy and healthy people for empowering them.” 
The ‘government and accountability of the government towards people’ have been highlighted in formulation of the ‘Deal of Century’, while Palestinian land and territory and also Palestinian government have not been taken into consideration. In this Plan, it has only been emphasized that Palestine was established through foreign investment. In formulation of ‘Deal of Century’, Kushner has considered Palestinian land as a free trade zone than a state with clear-cut government, nation and identity. The “Deal of Century” is about turning the Palestinian nation and people into an Israeli-led development project. 
In Kushner’s plan of ‘Deal of Century’, share of Palestinian people in empowerment and reconstruction of Palestine has been considered ‘negligible and insignificant’. In this plan, share of Palestinian people to create equality and justice in the newly-established companies and lending facilities has been considered just $100 million out of US $52 billion that is supposed to be put available to US companies. 
The “Deal of Century” was unveiled in Bahrain Conference with US$52 billion investment of Trump’s family to resolve Palestinian problem. However, it should be considered that what achievements this plan would bring about for Palestine, Israel and other countries if the plan is succeeded. The “Deal of Century” will resolve the problem of Resolution 242 for Israel, allowing Tel Aviv, capital of Israel, to legalize its settlements with the geographical privileges it receives. Under the Plan, Israel can maintain its border security more than before. In addition, risk of outbreak of a civil war, from withdrawing the areas that are home to hundreds of thousands of Jews, will also be removed. 
From the United States point of view, recognizing Al Quds as capital of Israel and relocation of embassies of other countries to Jerusalem (Al Quds) is raised and it is not supposed that a state named ‘Palestine’ will be recognized as the capital of Al Quds. 
In Manama Conference, Kushner emphasized, “After ceding their land and territory, Palestinians can export their traditional foods, which have unique tastes and flavors, along with their handicrafts to the world markets.”
Interestingly, after the plan of “Deal of Century’ was unveiled it was even criticized by the US President Trump and Secretary of State Mike Pompeo. In media circles and public opinion of the United States, this plan has also been nicknamed as “Waste of Time”.