What Has Changed in EM

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  • President Trump threatened US tariffs on $500 mln of Chinese imports
  • Malaysia Finance Minister Lim Guan Eng cut his growth forecast for this year to 5%
  • Pakistan central bank hiked rates 100 bp over the weekend and then devalued the rupee again
  • Israeli Knesset passed a controversial bill that defines Israel as “the national home of the Jewish people” 
  • Brazil presidential candidate Geraldo Alckmin has reportedly won backing from some key centrist parties
  • The last round of competitive oil auctions in Mexico have been delayed Continue reading

Dollar Consolidates After Trump Wades In

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  • President Trump’s explicit displeasure with the Fed’s rate hikes sucked the wind from the dollar’s sails yesterday
  • Although the dollar’s rally was halted, the impact on Fed expectations was marginal
  • Japan reported June inflation figures that were uninspiring
  • Canada reports May retail sales and June CPI
  • Taiwan reported much weaker than expected export orders; Brazil mid-July IPCA inflation is expected to rise 4.63% y/y

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Greenback Extends Gains

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  • The US dollar is extending its recent gains against most of the world’s currencies
  • UK consumers returned in Q2, but the quarter ended on a soft note
  • Australia reported strong of jobs data but AUD has been unable to hold on to its initial gains
  • The US calendar is light
  • Bank Indonesia left rates steady at 5.25%, as expected; South African Reserve Bank is expected to deliver a hawkish hold

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Greenback Extends Gains – For Now

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  • The dollar has recovered with the help of assurances by Fed Chair Powell
  • Powell testifies before a House committee today
  • Sterling had been holding the $1.3080 area before the soft UK CPI data
  • Between Powell and the oil figures, the market may look past the expected softness of housing starts
  • South Africa CPI rose 4.6% y/y in June vs. 4.8% expected

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