EM ended Friday under renewed selling pressures, and capped off a mostly softer week. COP, THB, and TWD were the best performers last week, while TRY, RUB, and ZAR were the worst. Despite a widely expected 25 bp hike, this week’s FOMC meeting still has potential to weigh on EM. Continue reading
Hong Kong may impose a tax on unsold apartments as an effort to increase supply and cool off the housing market. Bank of Israel’s MPC had a split vote last month for the first time in three years. South Africa President Ramaphosa said the ANC wants Julius Malema of the opposition EFF to rejoin the party. Former South Africa President Zuma will face trial on 16 criminal charges. Continue reading
Trade issues have become more salient for investors as the US seeks to redress the large and chronic trade deficit. In part, the issue turns on the size of the trade deficit. Much work has been done that suggests the shortfall may be not accurately measured. One of the knock-on consequences is that US savings may be undercounted as well.
Serbia’s central bank meets tomorrow and is expected to keep rates steady at 3.5%. With inflation falling to cycle lows, we see risks of a dovish surprise. The growth outlook remains favorable for equities, while the inflation outlook is favorable for bonds. Continue reading
Trade wars, like trade itself, produces winners and losers. Here is a brief overview of some of the considerations.
EM FX ended Friday on a firm note, and capped off a mostly firmer week. MXN, KRW, and ZAR were the best performers last week, while CLP, CZK, and PLN were the worst. US jobs data was mixed, with markets focusing on weak average hourly earnings rather than on the strong NFP number. Still, the data did nothing to change market expectations for a 25 bp by the FOMC this month. Continue reading
Indonesia will freeze prices for electricity, gasoline, and diesel fuel until next year. US President Trump and North Korean President Kim Jong Un will hold a summit meeting this spring. National Bank of Poland has tilted even more dovish. Moody’s downgraded Turkey a notch to Ba2 with stable outlook. Saudi Arabian Energy Minister hinted that the Aramco IPO could be delayed until 2019. Tanzania finally obtained a sovereign rating after years of discussion. Continue reading
Peru’s central bank meets today and is expected to cut rates 25 bp to 2.75%. Yet political risk remains high even as the economy suffers from the ripple effects of the corruption scandals in the construction sector. Continue reading
A discussion of trade policy approach of the Trump Administration. The key to whether a trade war can be avoided is how other countries respond. Understanding Navarro, Ross, and Lighthizer’s trade views is even more important given the resignation of Cohn.