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 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