Emerging Markets

We think that it is still too early to say whether Friday's price action was simply profit taking ahead of the weekend, or the resumption of overall negative market sentiment.  We think the global backdrop remains conducive for risk, at...

1) Indonesia announced it will allow full foreign ownership in many local industries in an effort to boost foreign investment, 2) The Thai military government called a referendum on the new constitution on July 31, 3) Poland’s ruling Law and...

EM assets for the most part fared well last week, and positive sentiment should carry over into this week.  China reported January foreign reserves over the weekend, and they fell less than expected to $3.231 bln.  China markets are closed...

1) China relaxed some rules on foreign capital flows, 2) Malaysian Prime Minister Najib is tightening his grip on power, 3) The Czech National Bank (CNB) has tilted more dovish, 4) Ukrainian Economy Minister Abromavicius resigned abruptly, throwing the ruling...

As we suspected, the current EM bounce still has some legs.  The BOJ’s surprise easing helped EM and risk end on last week on a strong note, and we expect that to carry over into this week.  Within EM, we...

1) Korea’s Financial Services Commission will introduce a so-called “omnibus account” for foreigners investing in local stocks, 2) Malaysian Attorney General Apandi Ali closed the investigation into transfers of foreign money into Prime Minister Najib Razak’s personal bank accounts, 3)...

EM enjoyed a nice bounce to end last week. The global liquidity outlook has clearly moved in favor of EM, at least for now.  However, the overall global backdrop has not shifted in favor of EM just yet.  Bottom line: ...

1) Malaysia’s central bank kept rates steady at 3.25%, as expected, but cut bank reserve ratios from 4% to 3.5%, 2) S&P downgraded Poland one notch to BBB+ with negative outlook, 3) Brazil’s central bank did a complete about-face and...

EM ended last week on a sour note. The most important factor for global risk appetite has become China, with the Fed tightening cycle now on the back burner.  Our base case remains that China muddles through, but policymakers there...

1) The Hong Kong dollar posted its biggest two-day decline since 1992, 2) Bank Indonesia restarted its easing cycle, cutting rates for the first time since February 2015, 3) Poland’s current Monetary Policy Council (RPP) held its last policy meeting,...

EM starts the week under broad-based pressure.  We downplay reports of competitive devaluations under way because of China’s FX moves, however.  Many in EM in experiencing negative terms of trade shocks, and so their currencies are expected to depreciate.  We...

1) Chinese policymakers introduced circuit-breakers for its equity markets on Monday, but then suspended them on Thursday, 2) PBOC finally fixed USD/CNY lower (albeit marginally) Friday after eight straight days of higher fixings, 3) Tensions have risen on the Korea...

Meet the New Year - same as the old year.  EM starts 2016 on a weak footing, with negative sentiment carrying over from 2015.  The global backdrop remains poor, with the Fed likely to continue its tightening cycle with another...

1) Argentina eliminated capital controls and allowed the peso to float, 2) Argentina also eliminated export taxes on agricultural goods that include beef, wheat, and corn, 3) Fitch joined S&P in cutting Brazil to sub-investment grade BB+ with a negative...

All eyes are on the US Federal Reserve, which is expected to raise interest rates for the first time in nearly a decade. Since the financial crisis in 2008, the US, along with the Eurozone, UK and Japan have held...