Emerging Markets

What's Up for the Emerging Markets?

EM ended last week on a firm note, helped by the weaker than expected US Q2 GDP report as well as the small bounce in oil.  With the RBA and BOE expected to ease this week, the global liquidity backdrop remains favorable for EM and “risk.”  US jobs report Friday will be very important for EM going forward.

We get our first glimpse of the Chinese economy for July with the PMI readings this week.  EM CPI data this week should underscore the low global inflation theme.  More EM central banks are likely to join the easing parade in H2.

Indonesia Leads EM Headlines with a Cabinet Reshuffle

In the EM equity space as measured by MSCI, Turkey (+4.8%), India (+1.4%), and Qatar (+1.3%) have outperformed this week, while Colombia (-6.4%), Mexico (-3.2%), and Singapore (-2.9%) have underperformed.  To put this in better context, MSCI EM rose 0.6% this week while MSCI DM rose 0.6%.

This Yahoo has Nothing to do with that Yahoo

Many undergraduates in Nigerian universities dabble in internet fraud. Nicknamed “yahoo-yahoo” after the international web portal and search engine, this perfidy has become a way of life for the young con-artists. Many of these fraudsters – dubbed “yahoo-boys” – have become filthy rich.

Emerging Markets Wait for FOMC Meeting

EM ended the week on a soft note, as the dollar reasserted broad-based strength against most currencies. The FOMC meeting this week could see the Fed push back against the market’s dovish take on policy, in which case EM would be likely to remain under pressure.

An Emerging Markets Status Update

The New York Times reported that the US is preparing to seize $1 bln in assets tied to 1MDB, S&P downgraded Turkey a notch to BB with a negative outlook, citing political uncertainty, Turkish President Erdogan declared a three-month state of emergency, The Nigerian Naira weakened above 300 per dollar for the first time, and Brazil’s central bank signaled a longer wait until it cuts rates