Emerging Markets

  • This will be another busy week in the emerging markets

    The Week Ahead in the Emerging Markets

    Global risk-off sentiment and the reelection of Dilma Rousseff as the Brazilian president is setting EM off on the back foot to start the week. However, the lack of large moves in the dollar could mean that negative sentiment will be contained to equity markets. Aside from positioning adjustment following the Brazilian elections, we don’t see any major idiosyncratic risk to look out for this week, and assume that the tone will be set mostly by developed markets.

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  • The latest news from the emerging markets

    What's Happening in the Emerging Markets?

    1) India’s equity index continues to outperform following Prime Minister Modi’s decision to end fuel subsidies on diesel 

    2) On Friday, Moody's cut Russia by a notch to Baa2 and kept the outlook at negative 

    3) Russian state oil company Rosneft is reportedly seeking over RUB2 trln from the Wellbeing fund 

    4) South Africa's mid-term budget review was positive 

    5) Petrobras had its credit rating cut by Moody’s 

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  • An Emerging Markets Week Preview

    This Week in the Emerging Markets is Busy Again

    Emerging market assets have started off the week mixed, with few clear signals to follow. The major currencies also appear directionless at the moment; though eurozone flash PMIs on Thursday could help put the spotlight back on weakness there.

    As long as the dollar strengthening trend does not resume in earnest, EM currencies should be OK. On the equity side, EM is taking the back seat, constrained to a high-beta status. Lower oil prices, if sustained, will help the likes of India and Turkey, though this is yet to be priced in.

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  • The Emerging Markets Review

    An Update on the Emerging Markets

    1) OPEC members have started a price war even as their oil output climbed to the highest level in over a year

    2) Recent inflation data out of India came as a much welcomed relief, and a fuel subsidy reduction is in sight

    3) Bank of Korea cut rates again, negating their forward guidance of a “one and done” move back in August

    4) The ruling party in Hungary, Fidesz, scored another resounding victory

    5) The Russian central bank announced a $50 bln repo agreement running through 2016 to help support the ruble, even as continues to lose ground

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  • Economic Events in the Emerging Markets

    Economic News from the Emerging Markets in the Coming Week

    A better mood in equity markets and a softer dollar at the start of the week gives us some hope for a bounce in EM assets, even if short lived. While the focus remains on major markets for now, several local stories - mostly of which political - will continue to play a large role in country-specific performance. 

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  • The Situation Among the Emerging Markets

    Emerging Markets Over the Last Week

    (1) The second round of the Brazilian elections is off to an exciting start

    (2) The situation in Turkey is becoming tenser as ISIS advances on Kurdish towns in Syria near border

    (3) The ruble continues to push through all-time highs

    (4) The Polish central bank cut rates for the first time since July 2013

    (5) Hong Kong democracy protests have died down, but the situation remains fluid

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  • Emerging Markets Preview of Economic News

    A Preview of this Week's Events Among the Emerging Markets

    EM assets are starting the week on the front foot under the favorable constellation of a weaker dollar, stronger stocks and the unexpected result of the presidential elections in Brazil.  In addition, after nearly a month of losses (MSCI EM is down nearly 10% from its peak); one also has to assume that positioning is a lot lighter.  If the bounce in EM continues, we would expect the higher-beta currencies such as TRY and ZAR to lead the way, and could give us a good opportunity to re-enter relative value trades with these currencies on the short end against stronger EMs.

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  • Changes Aplenty in Many Emerging Markets

    Changes Abound Throughout Emerging Markets

    1) USD/HKD traded at its highest level since May 2012.

    2) Russian officials confirm that capital controls are not on the cards.

    3) The Turkish central bank started to push bank against currency weakness – albeit slightly.

    4) Dilma’s chances of re-elections increased further.

    5) Argentine central bank Governor Fabrega resigned.

    6) Uruguay has cut the reserve requirement on government bonds to zero, and on central bank bond purchases to 30%.

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  • Too Close to Call for Marina and Dilma?

    Brazil's Marina Silva losing ground to Dilma Rousseff or Not

    Several variables are changing simultaneously which are hurting the prospects for Brazilian assets. The main ones are: (A) Dilma is gaining ground and Marina losing momentum faster than we expected, (B) the broad strong dollar trend hitting EM across the board, and (C) a global equity sell off. 

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