EM Preview for the Week Ahead

blog-icons-empreview emerging markets previewEM FX ended Friday mixed, capping off a mostly softer week.  TRY, MXN, and RUB were the top performers and the only ones up against USD, while ARS, CLP, and BRL were the worst.  Looking ahead, US jobs data on Friday pose some risks to EM, coming on the heels of a higher than expected 2% y/y rise in PCE.  China will also remain on the market’s radar screen, with the first snapshots of June economic activity just starting to emerge.  We remain negative on EM FX. Continue reading

What Has Changed in EM

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  • PBOC fixed USD/CNY at the highest level since December 14
  • Bank Indonesia delivered a larger than expected 50 bp to 5.25%
  • Bulgarian Prime Minister Boyko Borissov survived a second no confidence vote this year
  • Turkish President Recep Tayyip Erdogan was re-elected but with sweeping new powers
  • Saudi Arabia, Kuwait, and UAE are reportedly in talks to help stabilize Bahrain
  • The South African Reserve Bank basically ruled out further easing
  • Brazil government cut the inflation target to 3.75% +/- 1.5 percentage points for 2021 Continue reading

EM Preview for the Week Ahead

blog-icons-empreview emerging markets previewEM FX ended Friday mixed, and capped off a mixed week overall as the dollar’s broad-based rally was sidetracked.  EM may start the week on an upbeat after PBOC cut reserve requirements over the weekend.  Best EM performers last week were ARS, MXN, and TRY while the worst were THB, IDR, and BRL.  Continue reading

What Has Changed in EM

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  • Nor Shamsiah Mohd Yunus was named the new Governor of Malaysia’s central bank
  • Moody’s cut the outlook on Pakistan’s B3 rating to negative from stable
  • National Bank of Hungary tiled more hawkish
  • Israeli Prime Minister Benjamin Netanyahu’s wife was charged with misusing public funds
  • MSCI added Saudi Arabia and Argentina to its Emerging Markets index
  • Brazil’s government is split on the inflation target for 2021.
  • Ivan Duque will be the next president of Colombia Continue reading

BOE Spurs Dollar Pullback

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  • The BOE’s hawkish hold yesterday changed the near-term dynamics in the FX market
  • A modest recovery in the euro area flash PMI helped provide some fuel for the move that was already underway
  • Japan reported its All-Industries Index, which rose 1.0%in April after a flat reading in March
  • OPEC appears to be moving toward a formal hike of as much as a million barrels
  • Mexico mid-June CPI is expected to rise 4.57% y/y vs. 4.46% in mid-May
  • Brazil auctioned another $2 bln in FX swaps yesterday  Continue reading