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Win Thin

Win Thin

Win Thin is a senior currency strategist with over fifteen years of investment experience. He has a broad international background with a special interest in developing markets. Prior to joining BBH in June 2007, he founded Mandalay Advisors, an independent research firm that provided sovereign emerging market analysis to institutional investors. He received an MA from Georgetown University in 1985 and a B.A. from Brandeis University 1983. Feel free to contact the Zurich office of BBH

Articles by Win Thin

Emerging Markets: Preview of the Week Ahead

5 days ago

Stock Markets
EM FX continues to rally as the dollar remains on its back foot. With no obvious drivers this week that might help the dollar, we believe EM FX can extend the recent gains. Still, we continue to advise caution when investing in EM, as differentiation should again become evident as idiosyncratic risks remain in play.

Stock Markets Emerging Markets, January 10 Source: economist.com – Click to enlarge

Indonesia
Indonesia reports December trade data Monday. Exports are expected to rise 13.7% y/y and imports by 18.0% y/y. Bank Indonesia then meets Thursday and is expected to keep rates steady at 4.25%. CPI rose 3.6% y/y in December, below the 4% target but within the 3-5% target range. Price pressures

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Emerging Markets: What Changed

7 days ago

Summary
China State Administration of Foreign Exchange (SAFE) disputed press reports that it was slowing or halting purchases of US Treasury bonds.
Korean officials warned that it will take stern steps to prevent one-sided currency moves.
Bulgaria is talking “intensively” with the ECB and other EU representatives about entering the Exchange Rate Mechanism by mid-year.
Hungary announced general elections on April 8.
Poland’s government shuffled the cabinet.
Romanian central bank unexpectedly hiked rates for the first time in almost a decade.
Angola devalued the kwanza.
S&P downgraded Brazil by a notch to BB- with a stable outlook.
Stock Markets
In the EM equity space as measured by MSCI, Qatar (+6.7%), Egypt

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Emerging Market Preview: Week Ahead

12 days ago

Stock Markets
EM FX was mostly firmer last week, but ended on a mixed note Friday.  Best performers on the week for COP, MXN, and BRL while the worst were ARS, PHP, and CNY.  We continue to warn investors against blindly buying into this broad-based EM rally, as we believe divergences will once again assert themselves in the coming weeks.

Stock Markets Emerging Markets, January 03 Source: economist.com – Click to enlarge

Turkey
Turkey reports November IP Monday, which is expected to rise 7.0% y/y vs. 7.3% in October.  Current account data will be reported Friday, and a deficit of -$3.85 bln is expected.  If so, the 12-month total would rise to -$43.5 bln, the highest since December 2014.  The external

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Emerging Markets: What Changed

14 days ago

Summary
Tensions on the Korean peninsula appear to be easing.
Relations between Pakistan and the US have worsened.
The Philippine central bank is tilting more hawkish.
The ANC may consider removing Zuma from the presidency at the January 10 meeting of its National Executive Committee.
Turkish banker Atilla was convicted of helping Iran evade US financial sanctions.
Argentina sold $9 bln of dollar-denominated external debt.
Former Peru President Fujimori is now a free man.
Stock Markets
In the EM equity space as measured by MSCI, Peru (+6.4%), Russia (+5.9%), and Colombia (+5.7%) have outperformed this week, while Egypt (-2.5%), Qatar (+0.1%), and South Africa (+0.1%) have underperformed.  To put this in better

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Emerging Markets: What has Changed

23 days ago

Summary
Fitch upgraded Indonesia by a notch to BBB with stable outlook.
EU-Poland tensions entered a new phase.
Cyril Ramaphosa was elected as the new ANC President over opponent Nkosazana Dlamini-Zuma.
Argentina’s lower house approved President Macri’s pension reform bill.
Sebastian Pinera won the Chilean presidency in the second round vote.
Mexico political risk is rising as the PRI slush money scandal widens.
Peru’s Congress voted not to impeach President Kuczynski.
Stock Markets
In the EM equity space as measured by MSCI, Peru (+8.2%), Chile (+7.0%), and Qatar (+5.0%) have outperformed this week, while Korea (-1.5%), Russia (-1.4%), and Mexico (-1.2%) have underperformed.  To put this in better context, MSCI EM

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Emerging Market Preview: Week Ahead

December 18, 2017

Stock Markets
EM FX was mixed last week, with political optimism driving the big winners ZAR and CLP.  We remain cautious, as the Fed has signaled its intent to continue tightening in 2018. 

Stock Markets Emerging Markets, December 18 Source: economist.com – Click to enlarge

Brazil
Brazil reports October monthly GDP proxy Monday, which is expected to rise 2.8% y/y vs. 1.3% in September. Brazil then reports November current account and FDI data Wednesday.  It then reports mid-December IPCA inflation Thursday, which is expected to rise 2.95% y/y vs. 2.77% in mid-November. The central bank releases its quarterly inflation report that same day. Last COPOM statement suggested a 25 bp cut to 6.75% could be seen at

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Emerging Markets: Preview of the Week Ahead

December 11, 2017

Stock Markets
EM FX closed on a firm note, though most currencies were down for the entire week. TRY and ZAR outperformed, but we do not think that will be sustained.  FOMC meeting this week will provide some event risk for EM.

Stock Markets Emerging Markets, December 06 Source: economist.com – Click to enlarge

China
China reports November money and loan data this week, but no schedule has been set. China reports November retail sales and IP Thursday. The former is expected to rise 10.3% y/y and the latter by 6.2% y/y. The markets appear to be comfortable with China’s economic outlook right now.
Turkey
Turkey reports October current account and Q3 GDP data Monday. Growth is expected at 8.5% y/y, though this

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Emerging Markets: What Changed

December 9, 2017

Summary
China eased curbs on coal use for heating in the northern provinces to cope with colder weather.
Poland announced a cabinet shuffle.
Poland’s lower house approved the controversial judicial reform bill.
President Trump announced that the US recognizes Jerusalem as Israel’s capital.
Brazil COPOM was more dovish than expected after cutting rates 50 bp to 7.0%.
Chile central bank cut its 2017 and 2018 inflation forecasts and shifted to a more dovish stance.
Stock Markets
In the EM equity space as measured by MSCI, Turkey (+4.0%), Qatar (+2.7%), and Philippines (+2.1%) have outperformed this week, while South Africa (-3.7%), Chile (-3.4%), and Egypt (-3.2%) have underperformed. To put this in better context,

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Emerging Markets: Preview of the Week Ahead

December 4, 2017

Stock Markets
EM FX ended the week on a mixed note. US jobs data may refocus market attention on Fed tightening. Most EM inflation readings this week are expected to show easing price pressures, supporting a dovish EM central bank outlook. The major exceptions are Mexico and Turkey, whose central banks may be forced to tighten policy in the coming weeks.

Stock Markets Emerging Markets, November 29 Source: economist.com – Click to enlarge

Indonesia
Indonesia reports November CPI Monday, which is expected to rise 3.4% y/y vs. 3.6% in October. If so, it would still be below the 4% target and in the bottom half of the 3-5% target range. Next policy meeting is December 14, no change is expected.
Turkey
Turkey

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Emerging Markets: What Changed

December 2, 2017

Summary
Bank of Korea hiked rates by 25 bp to 1.50%, the first hike in six years.
Egypt central bank lifted the last remaining currency controls.
S&P cut South Africa’s foreign currency rating one notch to BB with stable outlook.
Turkey President Erdogan was implicated in an alleged plot to help Iran evade US sanctions.
Moody’s upgraded Argentina one notch to B2 with stable outlook.
The IMF approved a new $88 bln Flexible Credit Line (FCL) for Mexico.
Mexico shook up its economic team.
Brazil press is reporting that the pension reform vote may be delayed to 2018 due to lack of support.
Stock Markets
In the EM equity space as measured by MSCI, Egypt (+2.4%), Czech Republic (+1.1%), and Korea (+0.8%) have

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Emerging Market Preview: Week Ahead

November 27, 2017

Stock Markets
EM FX ended the holiday-shortened week on a soft note. While most were up on the entire week, notable laggards were TRY, CLP, and ZAR. All three currencies underperformed due to rising political risks, and we suspect that will continue. We believe MXN and BRL are likely to rejoin the laggards in the coming days.

Stock Markets Emerging Markets, November 22 Source: economist.com – Click to enlarge

Israel
Bank of Israel meets Monday and is expected to keep rates steady at 0.10%. Inflation was 0.2% y/y in October, well below the 1-3% target range. However, the bar to further stimulus is very high. Instead, the central bank will likely continue trying to weaken the shekel.
Mexico
Mexico reports

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Emerging Market Preview: Week Ahead

November 20, 2017

Stock Markets
EM FX ended the week firm, and capped off a good week overall.  Best performers last week for ZAR and KRW, while the worst were TRY and IDR.  Until we get higher US rates, the dollar may remain under modest pressure.  This would help EM maintain some traction, though we remain cautious.  
 
Stock Markets Emerging Markets, November 15 Source: econnomist.com – Click to enlarge

Chile
Chile will hold elections Sunday.  Former President Pinera is widely expected to win.  If so, we expect policies that may be more business-friendly than outgoing President Bachelet enacted in her second term.  Chile reports Q3 GDP and current account data Monday.  GDP is expected to grow 2.2% y/y vs. 0.9% in Q2.

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Emerging Markets: What has Changed

November 18, 2017

Summary
Moody’s raised India’s sovereign debt rating for the first time since 2004 by a notch to Baa2.
Nigerian officials are on a global roadshow to support plans to issue its longest-dated Eurobonds ever
The head of South Africa’s budget office resigned.
President Robert Mugabe was placed under house arrest by the Zimbabwe military.
Turkey’s central bank will introduce FX hedges for domestic companies with FX liabilities.
President Erdogan has reignited tensions with Turkey’s central bank.
Colombia’s fiscal rule may be adjusted by the next government.
Stock Markets
In the EM equity space as measured by MSCI, Korea (+4.2%), South Africa (+3.2%), and Thailand (+1.9%) have outperformed this week, while Egypt (-5.1%),

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Emerging Markets: Week Ahead Preview

November 13, 2017

Stock Markets
EM FX closed the week on a soft note.  For the week as a whole, best performers were MYR, PLN, and COP, while the worst were BRL, ZAR, and INR.  US inflation and retail sales data will likely set the tone for EM.  Also, the US fiscal debate is set to continue this week, so expect lots of choppy trading across many markets.

Stock Markets Emerging Markets, November 13 Source: economist.com – Click to enlarge

China
China will likely report October money and loan data this week.  October retail sales and IP will be reported Tuesday.  The former is expected to rise 10.5% y/y and the latter by 6.2% y/y.  Price pressures are picking up, but we not think the PBOC will change policy for the foreseeable

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Emerging Markets: What has Changed

November 11, 2017

Summary
China announced that it will remove foreign ownership limits on banks and other measures to open up the financial sector.
Central Bank of Turkey lowered commercial bank FX reserve requirements in an effort to support the lira.
US-Turkey relations appear to be thawing slightly.
Middle East tensions are rising on a variety of fronts.
Argentina central bank unexpectedly hiked rates again.
Former President Cardoso called on his PSDB party to quit the government coalition.
Press reports suggest that Brazil pension reform is dead in the water.
Stock Markets
In the EM equity space as measured by MSCI, Russia (+5.3%), Korea (+4.5%), and Colombia (+3.7%) have outperformed this week, while UAE (-3.7%), Qatar (-3.1%),

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Emerging Markets: Week Ahead Preview

November 6, 2017

Stock Markets
EM FX ended the week under pressure. News of the Venezuela debt restructuring was digested well, but sentiment went south as the day wore on.  Weakness was concentrated in the weakest links TRY, BRL, RUB, and ZAR, while MXN and COP were dragged along for the ride.  We see EM selling pressures persisting into 2018.

Stock Markets Emerging Markets, November 04 Source: economist.com – Click to enlarge

Czech Republic
Czech Republic reports September industrial and construction output, retail sales Monday.  Some slowing is expected.  It then reports October CPI Thursday, with inflation expected to remain steady at 2.7%.  If so, it would still be above the 2% target and supports the case for further

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Emerging Markets: What has Changed

November 4, 2017

Summary
Russia’s Finance Ministry announced plans to increase its dollar. purchases in November
Bahrain has reportedly asked its Gulf allies for financial assistance.
S&P upgraded Argentina a notch to B+ with stable outlook.
Brazil raised BRL6.15 bln ($1.9 bln) by auctioning off the rights to explore 6 of the 8 deep-water oil blocks.
Venezuela bowed to the inevitable, announcing that it would have to restructure its debt.
Stock Markets
In the EM equity space as measured by MSCI, Korea (+5.6%), Turkey (+3.7%), and Egypt (+2.7%) have outperformed this week, while Brazil (-4.6%), Colombia (-4.5%), and Mexico (-2.9%) have underperformed.  To put this in better context, MSCI EM rose 1.3% this week while MSCI DM rose

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Emerging Markets: What has Changed

October 30, 2017

Stock Markets
EM FX gained some limited traction Friday but still capped off another awful week.  So far this quarter, the worst EM performers are TRY (-6%), MXN (-5%), ZAR (-4%), COP, and BRL (both -2.5%). We expect these currencies to remain under pressure as political concerns are unlikely to dissipate anytime soon.

Stock Markets Emerging Markets, October 30 Source: economist.com – Click to enlarge

South Africa
South Africa reports September budget, money, and loan data Monday.  We expect the budget numbers to continue worsening, as Finance Minister Gigaba did not set forth any serious measures to control the deficit in his mid-term budget speech last week.  Q3 unemployment and September trade will be

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Emerging Markets: What has Changed

October 28, 2017

Summary
President Xi Jinping’s concepts of socialist thinking were written into China’s constitution.
Malaysia Prime Minister Najib presented an expansionary budget for 2018 ahead of elections.
Czech billionaire Andrej Babis’ ANO party won the elections.
South Africa’s mid-term budget statement acknowledged the deteriorating outlook but offered little in the way of solutions.
Press reports suggest Germany is working to cut funding for Turkish banks.
Argentina President Macri’s Cambiemos alliance was the winner of the congressional mid-term elections.
Argentina central bank unexpectedly hiked rates by 150 bp.
Brazil’s lower house voted not to advance the corruption charges against President Temer.
Banco de Mexico

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Emerging Markets: Week Ahead Preview

October 23, 2017

Stock Markets
EM FX ended the week on a soft note. Indeed, nearly every EM currency was down for the entire week, led by ZAR, BRL, and TRY. While higher US rates will pressure EM FX as a whole, we think heightend political risk will continue to hit these three currencies particularly hard, plus perhaps MXN too.

Stock Markets Emerging Markets, October 21 Source: economist.com – Click to enlarge

Korea
Korea reports trade data for the first 20 days of October Monday. It then reports Q3 GDP Thursday, which is expected to grow 3.0% y/y vs. 2.7% in Q2. The economic outlook is solid, while price pressures remain low. For now, the BOK can take a wait and see approach and keep rates steady well into 2018.
Singapore

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Emerging Markets: Preview of the Week Ahead

October 16, 2017

Stock Markets
EM FX closed the week on a firm note, as softer than expected US CPI data weighed on the dollar. We continue to believe that investors are underestimating the Fed’s tightening potential. Meanwhile, idiosyncratic political risk remains high for MXN, TRY, and ZAR.

Stock Markets Emerging Markets, October 14 Source: economist.com – Click to enlarge

China
China reports CPI and PPI Monday. The former is expected to rise 1.6% y/y and the latter by 6.4% y/y. The 19th CPC National Congress begins Wednesday. China then reports September retail sales, IP, and Q3 GDP Thursday. The y/y readings are expected at 10.2%, 6.4% y/y, and 6.8% y/y, respectively. Over the weekend, China reported stronger than expected

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Emerging Markets: What has Changed

October 14, 2017

Summary
Thailand announced general elections will be held in November 2018.
Czech police filed criminal charges against ANO leader Andrej Babis.
South Africa President Zuma may face corruption charges that were previously dropped.
The US suspended visa services for travelers from Turkey.
Kenyan opposition candidate Odinga withdrew from a redo of the annulled presidential election.
Saudi Arabia will take a more gradual approach to removing fuel subsidies.
Former Mexican First Lady Zavala said she’s leaving PAN to run as an independent.
Stock Markets
In the EM equity space as measured by MSCI, Hungary (+2.8%), Qatar (+2.6%), and Taiwan (+2.5%) have outperformed this week, while Mexico (-1.3%), Egypt (-0.8%), and

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Emerging Markets: Week Ahead Preview

October 9, 2017

Stock Markets
EM FX ended the week under pressure, as US data points to a rate hike in December and perhaps more in 2018. FOMC minutes this Wednesday will be closely studied for clues. US retail sales and CPI data Friday will also be important. We believe the most vulnerable currencies in this environment are ZAR and TRY, but one could also add MXN and perhaps RUB to that mix too.

Stock Markets Emerging Markets, October 07 Source: economist.com – Click to enlarge

China
China reports September foreign reserves Monday, which are expected to tick up to $3.1 trln. Money and new loan data could come out this week, but no date has been set. Trade data will be reported Friday. Exports are expected to rise 9.8% y/y

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Emerging Markets: What has Changed

October 7, 2017

Stock Markets
In the EM equity space as measured by MSCI, China (+4.1%), South Africa (+3.2%), and Hungary (+2.4%) have outperformed this week, while Egypt (-2.8%), Qatar (-2.7%), and Mexico (-1.7%) have underperformed. To put this in better context, MSCI EM rose 1.9% this week while MSCI DM rose 0.6%.
 
In the EM local currency bond space, Argentina (10-year yield -13 bp), Nigeria (-5 bp), and Thailand (-4 bp) have outperformed this week, while Mexico (10-year yield +20 bp), Brazil (+17 bp), and Poland (+14 bp) have underperformed. To put this in better context, the 10-year UST yield rose 4 bp to 2.38%.
 
In the EM FX space, CLP (+0.8% vs. USD), CZK (+0.4% vs. EUR), and ILS (+0.3% vs. USD) have outperformed this

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Emerging Markets: Preview of the Week Ahead

October 2, 2017

Stock Markets
EM FX firmed Friday, but capped off a bad week overall. US jobs data this Friday is unlikely to provide much clarity on Fed policy, though we think it remains on track to hike again in December. The Fed’s balance sheet reduction will start this month. We remain negative on EM, and believe selling pressures are likely to persist in Q4.

Stock Markets Emerging Markets, October 02 Source: economist.com – Click to enlarge

Thailand
Thailand reports September CPI Monday, which is expected to rise 0.5% y/y vs. 0.3% in August. If so, it would still be well below the 1-4% target range. Some analysts are calling for an eventual rate cut, but we believe steady rates will be seen for the foreseeable future.

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Emerging Markets: What has Changed

September 30, 2017

Summary
India Prime Minister Modi announced an INR163.2 bln program to deliver electricity to all households.
Poland’s President Duda is trying to reach a compromise on judicial reforms.
Fitch raised the outlook on Russia’s BBB- rating from stable to positive.
Saudi Arabia announced it will remove the ban on women driving.
South Africa’s biggest labor organization stepped up its opposition to President Zuma.
Turkey is planning to hike taxes on a variety of sectors and products
Argentina may allow short selling in the equity market.
Brazil successfully completed several power and oil auctions.
Stock Markets
In the EM equity space as measured by MSCI, Russia (+1.8%), Peru (+1.3%), and Thailand (+0.6%) have

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Emerging Markets: Week Ahead Preview

September 25, 2017

Stock Markets
EM FX was mostly firmer on Friday, but capped off a week of broad-based losses. US rates gave back some of post-FOMC rise, and that weighed on the dollar. Not much in the way of US data until Friday’s core PCE reading and Chicago PMI.

Stock Markets Emerging Markets, September 20 Source: economist.com – Click to enlarge

Singapore
Singapore reports August CPI Monday, which is expected to remain steady at 0.6% y/y. It then reports August IP Tuesday, which is expected to rise 14.3% y/y vs. 21% in July. MAS holds its semiannual policy meeting in October. No change in policy is seen. In addition, we think it’s unlikely that the statement language is adjusted to signal possible tightening at the April

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Emerging Markets: What has Changed

September 16, 2017

Summary:
China plans to issue its first USD-denominated bond since 2004.
China’s largest banks banned North Koreans from opening new accounts.
The UN Security Council approved new sanctions on North Korea.
Relations between Poland and the European Commission remain tense.
Brazil’s central bank appears to be signaling discomfort with ongoing BRL strength.
Brazil President Temer faces a second set of criminal charges.
Peru’s entire cabinet resigned after losing a confidence vote in Congress.
Stock Markets
In the EM equity space as measured by MSCI, Czech Republic (+2.7%), China (+2.4%), and Korea (+2.3%) have outperformed this week, while Qatar (-2.0%), Singapore (-0.9%), and Egypt (-0.7%) have underperformed. To put

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Emerging Markets: Preview for the Week Ahead

September 11, 2017

Stock Markets
EM FX ended the week on a mixed note, but still capped off a strong week overall. US data this week could challenge the market’s dovish take on the Fed. For now, though, the global liquidity outlook still seems to favor further gains in EM.

Stock Markets Emerging Markets, September 11 Source: economist.com – Click to enlarge

China
China should report August new loan and money supply data this week, but no date is set. New loans are expected at CNY950 bln vs. CNY826 bln in July. China reports August retail sales and IP Thursday. The former is expected to rise 10.5% y/y and the latter by 6.6% y/y.
Czech Republic
Czech Republic reports August CPI Monday, which is expected to rise 2.6% y/y vs. 2.5%

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Emerging Markets: What has Changed

September 9, 2017

Summary: 
South Korea completed installation of the THAAD missile shield.
Indonesia is considering issuing its first global IDR-denominated sovereign bonds.
Taiwan is undergoing a cabinet shuffle.
Brazil has seen some positive political developments.
Brazil’s central bank signaled that the easing cycle is nearing an end and that the pace of easing will slow.
Chile’s central bank boosted its growth forecasts.
Stock Markets
In the EM equity space as measured by MSCI, Brazil (+3.1%), Russia (+1.8%), and Colombia (+1.3%) have outperformed this week, while South Africa (-2.0%), Poland (-2.0%), and Turkey (-1.9%) have underperformed. To put this in better context, MSCI EM rose 0.1% this week while MSCI DM was flat.
In

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