Tag Archive: win-thin

Emerging Markets: What Changed

2018-02-03

by

2018-02-03

India plans to increase spending and widen its budget deficit targets ahead of key elections. India appears to be cracking down on cryptocurrencies. South Africa’s parliament has scheduled a no- confidence vote for Zuma on February 22. Turkish central bank raised its end-2018 inflation forecast in its quarterly inflation report. Peru’s Popular Force party expelled Kenji Fujimori and several of his allies.

Read More »

Emerging Markets: Week Ahead Preview

2018-01-29

by

2018-01-29

EM FX closed Friday on a mixed note, but still posted solid gains for the week as a whole. Best performers last week were ZAR, PLN, and CZK while the worst were ARS, PHP, and IDR. The bearish dollar environment remains intact and so we see further gains for EM FX this week. However, we continue to warn that divergences within EM are likely to assert themselves.

Read More »

Emerging Markets: What Changed

2018-01-27

by

2018-01-27

Korea policymakers have asked state-owned banks and companies to limit the issuance of global bonds. Malaysia's central bank hiked rates for the first time in four years. Pakistan’s central bank unexpectedly hiked rates for the first time in over four years. Moody’s raised its outlook on Russia’s Ba1 rating from stable to positive. Argentina’s central bank surprised markets with its second straight 75 bp rate cut.

Read More »

Emerging Markets: Week Ahead Preview

2018-01-22

by

2018-01-22

EM FX ended last week on a soft note, but still enjoyed a relatively positive tone for the week as a whole. Best performers last week were MXN, ZAR, and CNY while the worst were ARS, TRY, and CLP. With little on the horizon to give the dollar some traction, we think EM FX will likely continue to firm this week. However, we again urge caution and look for divergences within EM.

Read More »

Emerging Markets: Preview of the Week Ahead

2018-01-15

by

2018-01-15

EM FX continues to rally as the dollar remains on its back foot. With no obvious drivers this week that might help the dollar, we believe EM FX can extend the recent gains. Still, we continue to advise caution when investing in EM, as differentiation should again become evident as idiosyncratic risks remain in play.

Read More »

Emerging Markets: What Changed

2018-01-13

by

2018-01-13

China State Administration of Foreign Exchange (SAFE) disputed press reports that it was slowing or halting purchases of US Treasury bonds. Korean officials warned that it will take stern steps to prevent one-sided currency moves. Bulgaria is talking “intensively” with the ECB and other EU representatives about entering the Exchange Rate Mechanism by mid-year.

Read More »

Emerging Markets: What has Changed

2017-12-28

by

2017-12-28

Fitch upgraded Indonesia by a notch to BBB with stable outlook. EU-Poland tensions entered a new phase. Cyril Ramaphosa was elected as the new ANC President over opponent Nkosazana Dlamini-Zuma. Argentina’s lower house approved President Macri’s pension reform bill. Sebastian Pinera won the Chilean presidency in the second round vote.

Read More »

Emerging Market Preview: Week Ahead

2017-12-18

by

2017-12-18

EM FX was mixed last week, with political optimism driving the big winners ZAR and CLP. We remain cautious, as the Fed has signaled its intent to continue tightening in 2018.

Read More »

Emerging Markets: Preview of the Week Ahead

2017-12-11

by

2017-12-11

EM FX closed on a firm note, though most currencies were down for the entire week. TRY and ZAR outperformed, but we do not think that will be sustained. FOMC meeting this week will provide some event risk for EM.

Read More »

Emerging Markets: What Changed

2017-12-09

by

2017-12-09

China eased curbs on coal use for heating in the northern provinces to cope with colder weather. Poland announced a cabinet shuffle. Poland’s lower house approved the controversial judicial reform bill. President Trump announced that the US recognizes Jerusalem as Israel’s capital. Brazil COPOM was more dovish than expected after cutting rates 50 bp to 7.0%. Chile central bank cut its 2017 and 2018 inflation forecasts and shifted to a more dovish...

Read More »

Emerging Markets: Preview of the Week Ahead

2017-12-04

by

2017-12-04

EM FX ended the week on a mixed note. US jobs data may refocus market attention on Fed tightening. Most EM inflation readings this week are expected to show easing price pressures, supporting a dovish EM central bank outlook. The major exceptions are Mexico and Turkey, whose central banks may be forced to tighten policy in the coming weeks.

Read More »

Emerging Market Preview: Week Ahead

2017-11-27

by

2017-11-27

EM FX ended the holiday-shortened week on a soft note. While most were up on the entire week, notable laggards were TRY, CLP, and ZAR. All three currencies underperformed due to rising political risks, and we suspect that will continue. We believe MXN and BRL are likely to rejoin the laggards in the coming days.

Read More »

Emerging Market Preview: Week Ahead

2017-11-20

by

2017-11-20

EM FX ended the week firm, and capped off a good week overall. Best performers last week for ZAR and KRW, while the worst were TRY and IDR. Until we get higher US rates, the dollar may remain under modest pressure. This would help EM maintain some traction, though we remain cautious.

Read More »

Emerging Markets: What has Changed

2017-11-18

by

2017-11-18

Moody's raised India's sovereign debt rating for the first time since 2004 by a notch to Baa2. Nigerian officials are on a global roadshow to support plans to issue its longest-dated Eurobonds ever. The head of South Africa’s budget office resigned.

Read More »

Emerging Markets: Week Ahead Preview

2017-11-13

by

2017-11-13

EM FX closed the week on a soft note. For the week as a whole, best performers were MYR, PLN, and COP, while the worst were BRL, ZAR, and INR. US inflation and retail sales data will likely set the tone for EM. Also, the US fiscal debate is set to continue this week, so expect lots of choppy trading across many markets.

Read More »

Emerging Markets: What has Changed

2017-11-11

by

2017-11-11

China announced that it will remove foreign ownership limits on banks and other measures to open up the financial sector. Central Bank of Turkey lowered commercial bank FX reserve requirements in an effort to support the lira. US-Turkey relations appear to be thawing slightly. Middle East tensions are rising on a variety of fronts. Argentina central bank unexpectedly hiked rates again.

Read More »

Emerging Markets: Week Ahead Preview

2017-11-06

by

2017-11-06

EM FX ended the week under pressure. News of the Venezuela debt restructuring was digested well, but sentiment went south as the day wore on. Weakness was concentrated in the weakest links TRY, BRL, RUB, and ZAR, while MXN and COP were dragged along for the ride. We see EM selling pressures persisting into 2018.

Read More »

Emerging Markets: What has Changed

2017-11-04

by

2017-11-04

Russia’s Finance Ministry announced plans to increase its dollar. purchases in November. Bahrain has reportedly asked its Gulf allies for financial assistance. S&P upgraded Argentina a notch to B+ with stable outlook. Brazil raised BRL6.15 bln ($1.9 bln) by auctioning off the rights to explore 6 of the 8 deep-water oil blocks. Venezuela bowed to the inevitable, announcing that it would have to restructure its debt.

Read More »

Emerging Markets: What has Changed

2017-10-30

by

2017-10-30

EM FX gained some limited traction Friday but still capped off another awful week. So far this quarter, the worst EM performers are TRY (-6%), MXN (-5%), ZAR (-4%), COP, and BRL (both -2.5%). We expect these currencies to remain under pressure as political concerns are unlikely to dissipate anytime soon.

Read More »

Emerging Markets: What has Changed

2017-10-28

by

2017-10-28

President Xi Jinping’s concepts of socialist thinking were written into China’s constitution. Malaysia Prime Minister Najib presented an expansionary budget for 2018 ahead of elections. Czech billionaire Andrej Babis’ ANO party won the elections. South Africa's mid-term budget statement acknowledged the deteriorating outlook but offered little in the way of solutions. Press reports suggest Germany is working to cut funding for Turkish banks.

Read More »