Global Investing

Russia’s starting blocs – the EEU

The course is more than 20 million square kilometers, and covers 15 percent of the world’s land surface. It’s not a new event in next month’s IAAF World Championships in Moscow but a long-term project to better integrate emerging Eurasian economies.

The eventual aim of a new economic union for post-Soviet states, known as the Eurasian Economic Union (EEU), is to “substitute previously existing ones,” according to Tatiana Valovaya, Russia’s minister in charge of development of integration and macroeconomics, at a media briefing in London last week.

That means new laws and revamping regulation for “natural monopolies” in the member states, streamlined macroeconomic policy, shared currency policy, new rules on subsidies for the agricultural and rail sectors and the development of oil markets.

Kazakhstan and Belarus are the two other members of what is known as the Single Economic Space (SES), that is, the existing economic partnership between the three bordering countries established in 2012. So far Kyrgyzstan and Tajikistan  are co-operative members, Ukraine, Armenia and Moldova have been given observer status.

Since 1995, the SES3 and observer states have been moving ever closer to a shared set of structures under the EEU umbrella.

from Commodity Corner:

Why are commodities risky assets for investors?

Recently I received an email asking me to explain why commodities are risky assets. "I would think energy and raw
materials would still be in demand, even if Dubai defaults," the writer said.

 It's a good point. People need to eat, drink, drive and live. They can't do it without commodities.

 But for investors commodities are risky. That is because they mostly invest using commodity futures, which are subject to
wild price swings because they react strongly and immediately to demand and supply news and changing expectations for the future.    Since commodities became more popular with investors they have also become highly influenced by market sentiment and macro economic indicators and that's why they have been moving alongside equities.