What Has Changed in EM

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  • Tensions on the Korean peninsula are still rising
  • Hong Kong boosted its 2017 growth forecast
  • S&P affirmed Israel’s A+ rating but moved the outlook from stable to positive
  • The corruption investigation against Israeli Prime Minister Netanyahu has intensified
  • South Africa’s parliament voted down the no confidence motion against President Zuma
  • Argentina officials are taking steps to support the peso
  • Banco de Mexico has ended its tightening cycle  Continue reading

Is EM FX Finally Turning?

MindMkts Blog ICON-FX TechPicIs EM FX finally turning?  We have been surprised (and puzzled) by how well EM currencies have held up as DM rates have risen.  Recent price action suggests we may be at an inflection point for EM FX.  We note too that similar patterns are being seen in the major currencies as well. Continue reading

What Has Changed in EM

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  • The Reserve Bank of India started an easing cycle by cutting all policy rates 25 bp
  • Bank Indonesia has tilted more dovish after signaling earlier this year that the easing cycle was over
  • Czech National Bank became the first in Europe to hike
  • Political risk is rising in Israel
  • President Trump signed the Russia sanctions bill
  • Nigeria is trying to unify its system of multiple exchange rates
  • Brazil President Temer survived a lower house vote that sought to put him on trial for corruption
  • Fitch moves its outlook on Mexico’s BBB+ rating from negative to stable.
  • The US put sanctions on Venezuelan President Maduro Continue reading

EM Preview for the Week Ahead

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EM FX was mixed last week, as markets await fresh drivers.  Jobs report this Friday could provide greater clarity with regards to Fed policy.  BOE and RBA meet but aren’t expected to change policy.  Data is likely to reinforce the notion that inflation remains low in EM, allowing those central banks to remain dovish.  Czech National Bank is the main exception, as it may start the tightening cycle this week.  Continue reading