Tuesday , September 26 2017
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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: Week Ahead Preview

19 hours ago

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

10 days ago

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

15 days ago

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

17 days ago

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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Emerging Markets: What has Changed

24 days ago

Summary
India Prime Minister Modi has started a cabinet shuffle.
Freeport McMorAn ceded control of the world’s second largest copper mine to the Indonesian government.
Central Bank of Russia took over Bank Otkritie, once Russia’s largest private bank.
Kenya’s top court nullified last month’s presidential election.
Fitch cut Qatar’s rating by one notch to AA- with negative outlook.
Chile’s economic team saw a big shake-up.
Banco de Mexico boosted its growth forecasts in the latest quarterly inflation report.
Stock Markets

In the EM equity space as measured by MSCI, Egypt (+4.8%), Russia (+4.1%), and Thailand (+3.0%) have outperformed this week, while Czech Republic (-1.5%), Mexico (-1.5%), and Indonesia (-1.3%)

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Emerging Market: Preview of the Week Ahead

29 days ago

Stock Markets
EM FX ended last week on a strong note, buoyed by perceived dovishness from Yellen at the Jackson Hole symposium. However, US jobs data this Friday could test the market’s convictions. Within EM, data are likely to support our view that EM central banks can retain their largely dovish posture into 2018.

Stock Markets Emerging Markets, August 23 Source: economist.com – Click to enlarge

Mexico
Mexico reports July trade Monday, with a deficit of -$1.04 bln expected. Export growth was 11.5% y/y in June, driven by gains in both manufacturing and petroleum shipments. Import growth has lagged, leading the 12-month trade deficit to narrow over the past several months.
Turkey
Turkey reports July

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Emerging Markets: What has Changed

August 12, 2017

Summary:
Tensions on the Korean peninsula are still rising. 
Hong Kong boosted its 2017 growth forecast.
S&P affirmed Israel’s A+ rating but moved the outlook from stable to positive.
The corruption investigation against Israeli Prime Minister Netanyahu has intensified.
South Africa’s parliament voted down the no confidence motion against President Zuma. 
Argentina officials are taking steps to support the peso. 
Banco de Mexico has ended its tightening cycle.
Stock Markets
In the EM equity space as measured by MSCI, Peru (+1.8%), Czech Republic (+0.7%), and Hungary (+0.5%) have outperformed this week, while India (-3.9%), Korea (-3.5%), and Hong Kong (-2.1%) have underperformed.  To put this in better context, MSCI

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Emerging Markets: The Week Ahead

August 7, 2017

Stock Markets
EM FX appears to be rolling over (see our recent piece “Is EM FX Finally Turning?”). Technical indicators are stretched as many EM currencies bump up against strong resistance levels. Strong US jobs data is bringing Fed tightening back into focus. We think ZAR could be shaping up to be the canary in a coalmine.  It was -3% vs. USD last week and by far the worst in EM.

Stock Markets Emerging Markets, August 2nd Source: economist.com – Click to enlarge

Indonesia
Indonesia reports Q2 GDP Monday, which is expected to grow 5.08% y/y vs. 5.01% in Q1. However, officials appear to be getting more concerned about growth. Bank Indonesia just turned more dovish after signaling that the easing cycle had ended.

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Emerging Markets: What has Changed

August 5, 2017

Summary
The Reserve Bank of India started an easing cycle by cutting all policy rates 25 bp.
Bank Indonesia has tilted more dovish after signaling earlier this year that the easing cycle was over.
Czech National Bank became the first in Europe to hike.
Political risk is rising in Israel.
President Trump signed the Russia sanctions bill.
Nigeria is trying to unify its system of multiple exchange rates.
Brazil President Temer survived a lower house vote that sought to put him on trial for corruption.
Fitch moves its outlook on Mexico’s BBB+ rating from negative to stable.
The US put sanctions on Venezuelan President Maduro.
Stock Markets
In the EM equity space as measured by MSCI, Hungary (+2.9%), Brazil (+2.4%), and

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Emerging Markets: Preview of the Week Ahead

July 31, 2017

Stock Markets
EM FX was mixed last week, as markets await fresh drivers. Jobs report this Friday could provide greater clarity with regards to Fed policy. BOE and RBA meet but aren’t expected to change policy. Data is likely to reinforce the notion that inflation remains low in EM, allowing those central banks to remain dovish. Czech National Bank is the main exception, as it may start the tightening cycle this week.

Stock Markets Emerging Markets, July 29 – Click to enlarge

China
China reports official July PMI readings Monday, with manufacturing expected at 51.5 vs. 51.7 in June. Caixin manufacturing PMI will come out a day later, and is expected to remain steady at 50.4. CNY was one of the best EM

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Emerging Markets: What has Changed

July 29, 2017

Summary
Indonesia’s parliament approved a revised budget for 2017 that sees a wider deficit.
Pakistan’s Supreme Court has ousted Prime Minister Sharif.
Polish President Duda vetoed portions of the judicial reform bill submitted by the Law and Justice party.
The European Commission (EC) is preparing possible sanctions against Poland.
The US House of Representatives voted to impose new sanctions against Russia, Iran, and North Korea.
Brazil President Temer’s approval rating dropped to a record low..
World Bank’s IFC issued its first sol-denominated global bond
Stock Markets
In the EM equity space as measured by MSCI, China (+1.4%), Indonesia (+1.3%), and Peru (+1.3%) have outperformed this week, while Korea (-2.9%),

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Emerging Markets: Week Ahead Preview

July 24, 2017

Stock Markets
EM FX was mixed on Friday, but largely firmer over the entire week. Top performers were BRL, KRW, and ZAR, while the worst were ARS, MXN, and RUB. FOMC meeting this week poses some potential risks to the global liquidity story that’s supporting EM. Within EM, the low inflation/easy monetary policy narrative should continue with data and events this week.

Stock Markets Emerging Markets, July 22 – Click to enlarge

Singapore
Singapore reports June CPI Monday, which is expected to rise 0.7% y/y vs. 1.4% in May. It then reports June IP Wednesday, which is expected to rise 6.5% y/y vs. 5.0% in May. Price pressures remain low while the real sector has been a bit sluggish. As such, the MAS may maintain its

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Emerging Markets: What has Changed

July 22, 2017

Summary
South Korea proposed resuming military and humanitarian exchanges with North Korea.
The European Union may sanction Poland over its controversial judicial overhaul.
Turkish Prime Minister Yildirim announced a cabinet shuffle after meeting with President Erdogan.
Turkey’s worsening relations with Germany will come with economic costs.
South African Reserve Bank surprised markets by starting the easing cycle with a 25 bp cut to 7.0%.
Brazil will raise fuel taxes and freeze spending in an effort to meet its fiscal targets
S&P raised the outlook on Mexico’s BBB+ rating from negative to stable.

Stock Markets

In the EM equity space as measured by MSCI, South Africa (+1.8%), Chile (+1.6%), and China (+1.5%) have

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Emerging Markets: Preview of the Week Ahead

July 17, 2017

Stock Markets
EM FX ended the week on a firm note, helped by softer than expected US data.  Indeed, EM FX was up across the board for the entire week and was led by BRL, MXN, and ZAR. The ECB meeting this week will draw some interest, especially after the BOC last week became the second major central bank to hike rates.

Stock Markets Emerging Markets, July 05 Source: economist.com – Click to enlarge

Hungary
National Bank of Hungary meets Tuesday and is expected to keep policy steady. The bank has been loosening policy quarterly via unconventional measures, which it just did at its June meeting. Further easing is possible at the September meeting. CPI rose only 1.9% y/y in June, the lowest since December and

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Emerging Markets: What has Changed

July 15, 2017

Summary
Pakistani Prime Minister Nawaz Sharif may face trial on corruption charges.
Turkey will reportedly pay $2.5 bln for a Russian missile defense system.
Nigeria said it was willing to cap its oil production to support OPEC efforts to cut global supply.
Former Brazilian President Lula was sentenced to nine and half years in prison on corruption charges.
S&P downgraded Chile one notch to A+ with a stable outlook.
A consortium of three private companies discovered 1.4-2.0 bln barrels of new oil in Mexico.
S&P downgraded Venezuela by a notch to CCC- and kept the negative outlook.
Stock Markets
In the EM equity space as measured by MSCI, Brazil (+8.5%), Qatar (+6.6%), and Egypt (+5.8%) have outperformed this week,

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Emerging Markets: Preview of the Week Ahead

June 12, 2017

Stock Markets

EM FX was mixed last week but in general held up well in the aftermath of Super Thursday. The global backdrop seems relatively benign right now despite the FOMC meeting this week. We still think investors have to be picky.

TRY, ZAR, and BRL at current levels seem too rich given the underlying risks in all three. On the flip side, we think China is looking stable right now and should help Emerging Asia’s outlook near-term.
 

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

China

China will report May money and new loan data sometime this week. No date has been specified, but these series are expected to show some modest slowing from April. May IP and retail

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Emerging Markets: What has Changed

June 10, 2017

Summary:
The Reserve Bank of India cut its inflation forecast for FY2017/18.
South Korean President Moon suspended the installation of the remaining components of the THAAD missile shield.
S&P cut Qatar one notch to AA-.
Turkey looks likely to get caught up in yet another regional conflict.
Brazil’s structural reform agenda has been delayed as President Temer remains on the ropes.
Stock Markets
In the EM equity space as measured by MSCI, Peru (+2.9%), China (+2.5%), and Poland (+1.5%) have outperformed this week, while Qatar (-6.1%), South Africa (-1.7%), and Indonesia (-1.5%) have underperformed. To put this in better context, MSCI EM rose 0.6% this week while MSCI DM fell -0.4%.

In the EM local currency bond

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Emerging Markets: Preview of the Week Ahead

June 5, 2017

Stock Markets
EM FX closed last week on a firm note as weak US jobs data supported the notion that the Fed will find it hard to tighten in H2.  No major US data will be reported this week and the FOMC embargo for the June 14will be in effect.  As such, there is little on the near-term horizon that might help the dollar, so it’s likely to remain on the defensive this week.
As always, political risk in EM remains significant.  Brazil and South Africa continue to simmer, and we see more bad news ahead from both.  As of this writing, the outcome of the Mexican state elections is not yet known.  

Stock Markets Emerging Markets, May 31 Source: economist.com – Click to enlarge

China
Caixin reports May China services

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Emerging Markets: What has Changed

June 3, 2017

Summary
The Indonesian cabinet is discussing revisions to the 2017 state budget.
The Thai central bank plans to reform some FX rules.
South African President Zuma survived the no confidence vote within his own ANC.
Brazil’s central bank signaled a slower pace of easing ahead after it cut 100 bp again.
Moody’s cut the outlook on Brazil’s Ba2 rating from stable to negative.
Stock Markets
In the EM equity space as measured by MSCI, Egypt (+4.7%), Hong Kong (+2.2%), and Hungary (+1.9%) have outperformed this week, while Russia (-3.2%), South Africa (-3.2%), and Brazil (-2.5%) have underperformed. To put this in better context, MSCI EM fell -0.3% this week while MSCI DM rose 0.9%.
In the EM local currency bond space,

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Emerging Markets: What has Changed

June 3, 2017

Summary
The Indonesian cabinet is discussing revisions to the 2017 state budget.
The Thai central bank plans to reform some FX rules.
South African President Zuma survived the no confidence vote within his own ANC.
Brazil’s central bank signaled a slower pace of easing ahead after it cut 100 bp again.
Moody’s cut the outlook on Brazil’s Ba2 rating from stable to negative.
Stock Markets
In the EM equity space as measured by MSCI, Egypt (+4.7%), Hong Kong (+2.2%), and Hungary (+1.9%) have outperformed this week, while Russia (-3.2%), South Africa (-3.2%), and Brazil (-2.5%) have underperformed.  To put this in better context, MSCI EM fell -0.3% this week while MSCI DM rose 0.9%.
In the EM local currency bond space,

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Emerging Markets: Week Ahead Preview

May 29, 2017

Stock Markets
EM FX closed last week on a mixed note, with markets struggling to find a compelling investment theme. The US jobs data this week could provide some more clarity on Fed policy. We still think markets are still underestimating political risk in the big EM countries, including Brazil (Moody’s outlook moved to negative), Mexico (election in state of Mexico), South Africa (ANC debates Zuma’s fate), and Turkey (ongoing crackdown on opposition).

Israel
Bank of Israel meets Monday and is expected to keep rates steady at 0.10%. CPI rose 0.7% y/y in April, below the 1-3% target range. With the shekel remaining firm, the central bank is likely to keep rates steady whilst continuing to buy USD/ILS.
South

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Emerging Markets: Week Ahead Preview

May 29, 2017

Stock Markets
EM FX closed last week on a mixed note, with markets struggling to find a compelling investment theme. The US jobs data this week could provide some more clarity on Fed policy.  We still think markets are still underestimating political risk in the big EM countries, including Brazil (Moody’s outlook moved to negative), Mexico (election in state of Mexico), South Africa (ANC debates Zuma’s fate), and Turkey (ongoing crackdown on opposition).

Israel
Bank of Israel meets Monday and is expected to keep rates steady at 0.10%. CPI rose 0.7% y/y in April, below the 1-3% target range. With the shekel remaining firm, the central bank is likely to keep rates steady whilst continuing to buy USD/ILS.
South

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Emerging Markets: Preview of the Week Ahead

May 22, 2017

Stock Markets
EM FX ended last week on a firm note, shrugging off political risk that consumed markets earlier in the week. With US rates remaining low, the dollar remains under pressure against the majors, and so EM FX is likely to benefit also. Yet we warn investors not to jump back into EM countries that are inherently riskier, such as Brazil, South Africa, and Turkey. We continue to favor Asia in the current environment.  

Stock Markets Emerging Markets, May 17 Source: economist.com – Click to enlarge

Taiwan
Taiwan reports April export orders Monday, which rose 12.3% y/y in March. It reports April IP Tuesday, which is rose 3.2% y/y in March. The central bank does not have an explicit inflation target, but low price pressures should allow it to keep rates steady at its quarterly policy meeting in June.
Singapore
Singapore reports April CPI Tuesday, which is expected to rise 0.5% y/y vs. 0.7% in March. The MAS does not have an explicit inflation target, but low price pressures led it to keep policy accommodative at its April meeting. Many look for a change in MAS forward guidance at its October meeting that sets the table for tightening in 2018. Singapore then reports April IP Friday, which is expected to rise 5.5% y/y vs. 10.2% in March.

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Emerging Markets: What Has Changed

May 20, 2017

Summary
China’s government approved the creation of a bond link between Hong Kong and the mainland.
S&P upgraded Indonesia one notch to investment grade BBB- with stable.
Fitch revised the outlook on Vietnam’s BB- rating from stable to positive.
Egypt will announce a package of social spending soon.
Moody’s changed the outlook on Poland’s A2 rating from negative to stable.
Brazil press reported that meat-packing company JBS has submitted compromising tape recordings to the Supreme Court.
Chile central bank surprised markets with a 25 bp cut but signaled a move to a neutral bias.
Stock Markets
In the EM equity space as measured by MSCI, Hungary (+2.6%), Indonesia (+2.0%), and Peru (+1.4%) have outperformed this week, while Brazil (-11.1%), Poland (-1.8%), and Egypt (-1.7%) have underperformed.  To put this in better context, MSCI EM fell -0.3% this week while MSCI DM was flat.

In the EM local currency bond space, India (10-year yield -11 bp), Korea (-7 bp), and Peru (-4 bp) have outperformed this week, while Brazil (10-year yield +155 bp), Argentina (+28 bp), and Turkey (+22 bp) have underperformed.  To put this in better context, the 10-year UST yield fell 8 bp to 2.25%.
In the EM FX space, SGD (+1.3% vs. USD), ZAR (+1.0% vs. USD), and THB (+0.9% vs. USD) have outperformed this week, while BRL (-4.

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Emerging Market Preview: Week Ahead

May 15, 2017

Stock Markets
EM FX ended last week on a firmer note, helped by lower US rates and softer than expected CPI and retail sales data. Stabilizing commodity prices also helped EM. Yet these supportive conditions seem unlikely to persist, and we remain defensive on EM.  

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

Brazil
Brazil will report April tax collections this week, but no date has been scheduled. Collections are expected to rise 8% vs. 3% in March. If so, that would set the table for better budget data that month. The fiscal numbers worsened in March, reflecting a weak economy and rising borrowing costs.
China
China reports April retail sales and IP Monday. The former is expected to rise 10.8% y/y and the latter by 7.0% y/y. With the exception of new loans, April data have come in a bit on the soft side but markets appear comfortable with this.
Poland
Poland reports March trade and current account data Monday. It reports Q1 GDP Tuesday, which is expected to grow 3.9% y/y vs. 2.7% in Q4. National Bank of Poland meets Wednesday and is expected to keep rates steady at 1.5%. Poland then reports April industrial and construction output, PPI, and retail sales Friday, with the data expected to show some moderation from the strong March readings.

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Emerging Markets: What Has Changed

May 13, 2017

Summary
Moon Jae-in was elected president of South Korea
Philippine President Duterte named Nestor Espenilla as central bank governor
Nigerian President Buhari traveled to London for a follow-up to the initial medical visit earlier this year
Market expectations for 2018 inflation in Brazil rose for the first time in more than a year
Peru’s central bank unexpectedly started the easing cycle with a 25 bp cut to 4.0%
Stock Markets
In the EM equity space as measured by MSCI, Brazil (+5.5%), Hungary (+4.3%), and Colombia (+4.3%) have outperformed this week, while Thailand (-0.9%), Poland (-0.7%), and the Philippines (-0.6%) have underperformed.  To put this in better context, MSCI EM rose 2.5% this week while MSCI DM fell -0.2%.
In the EM local currency bond space, Poland (10-year yield -14 bp), Brazil (-12 bp), and Hungary (-10 bp) have outperformed this week, while Czech Republic (10-year yield +25 bp), Argentina (+21 bp), and Turkey (+17 bp) have underperformed.  To put this in better context, the 10-year UST yield fell 1 bp to 2.34%.
In the EM FX space, RUB (+1.5% vs. USD), BRL (+1.4% vs. USD), and MXN (+1.2% vs. USD) have outperformed this week, while TRY (-0.7% vs. USD), PEN (-0.5% vs. USD), and ARS (-0.3% vs. USD) have underperformed.

Stock Markets Emerging Markets, May 13 Source: economist.

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Emerging Markets Preview

May 8, 2017

Stock Markets
EM FX got some limited traction as the week closed, helped by stabilizing commodity prices.  However, oil, copper, and iron ore have all broken important technical levels that suggest further weakness ahead.  We also think the FOMC and jobs data support our view that the next Fed hike will be in June. This backdrop should keep EM on the defensive this week.  

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

China
China reports April trade figures on Monday. Exports are expected to rise 11.3% y/y and imports by 18.0% y/y. China reports April CPI and PPI Wednesday. The former is expected to rise 1.1% y/y while the latter is expected to rise 6.7% y/y. For now, markets are digesting signs of slowing in China’s economy.
Turkey
Turkey reports March IP Monday, which is expected to rise 2.5% y/y vs. 1.0% in February. It then reports March current account data Thursday, which is expected at -$3.20 bln vs, -$2.53 bln in February. If so, the 12-month total would fall slightly to -$33.2 bln. External accounts are in good shape, but mostly due to sluggish growth.
Taiwan
Taiwan reports April trade Monday. Exports are expected to rise 10.9% y/y and imports by 18.0% y/y. EM trade data has come in largely stronger than expected in April, and Taiwan should be no exception.

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Emerging Markets: What has Changed

May 6, 2017

Summary
Relations between China and North Korea appear to be worsening.
The THAAD missile shield has been deployed earlier than expected in South Korea.
An amendment to India’s Banking Regulation Act gives the RBI more power to address bad loans.
Tensions are rising between Czech Prime Minister Sobotka and Finance Minister Babis.
Brazil pension reform bill was passed 23-14 in the lower house special committee.
Stock Markets
In the EM equity space as measured by MSCI, the Philippines (+2.4%), UAE (+2.3%), and Singapore (+2.1%) have outperformed this week, while Russia (-4.3%), Turkey (-1.8%), and Qatar (-1.6%) have underperformed.  To put this in better context, MSCI EM fell -0.4% this week while MSCI DM rose 0.7%.

In the EM local currency bond space, Czech Republic (10-year yield -10 bp), Hungary (-5 bp), and India (-5 bp) have outperformed this week, while Russia (10-year yield +18 bp), Argentina (+16 bp), and Colombia (+8 bp) have underperformed.  To put this in better context, the 10-year UST yield rose 8 bp to 2.36%. 

In the EM FX space, ILS (+0.7% vs. USD), ARS (+0.5% vs. USD), and HUF (+0.4% vs. EUR) have outperformed this week, while RUB (-2.7% vs. USD), ZAR (-1.7% vs. USD), and PEN (-1.3% vs. USD) have underperformed. 

Stock Markets Emerging Markets, May 06 Source: economist.

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Emerging Markets: Week Ahead Preview

May 1, 2017

Stock Markets
EM FX ended last week on a mixed note.  Indeed, the week and the month were also very much mixed for EM, reflecting a variety of global and country-specific drivers impacting these countries.  This week’s US jobs data could bring Fed tightening back as a major driver for EM.  
We will also get the first snapshots of trade in April from Korea and Brazil, as well as Caixin PMI readings for China.  Official April manufacturing PMI was reported over the weekend at 51.2 vs. 51.7 expected and 51.8 in March, and so there are downside risks to this week’s Caixin PMI readings.

Stock Markets Emerging Markets, April 26 Source: www.economist.com – Click to enlarge

Korea
Korea reports April trade data Monday.  Exports are expected to rise 17% y/y and imports by 18.7% y/y.  It then reports April CPI Tuesday, which is expected to rise 2.1% y/y vs. 2.2% in March.  Given downside risks from political uncertainty (both domestic and regional), we think the BOK will remain on hold for now.  Next policy meeting is May 25, no change expected then.
Thailand
Thailand reports April CPI Monday, which is expected to rise 0.72% y/y vs. 0.76% in March.  This would be below the BOT’s target range of 1.0-4.0%.

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Emerging Markets: What has Changed

April 29, 2017

Summary
Moody’s moved the outlook on Vietnam’s B1 rating from stable to positive.
Nigeria’s central bank introduced a new FX window for portfolio investors.
Moody’s moved the outlook on Romania’s Baa3 rating from positive to stable.
Central Bank of Russia accelerated its easing cycle.
Central Bank of Turkey delivered a hawkish surprise.
Brazil’s lower house easily approved the labor reforms, but popular resistance is rising.
Stock Markets
In the EM equity space as measured by MSCI, Poland (+5.0%), Korea (+3.0%), and South Africa (+2.9%) have outperformed this week, while Colombia (-3.3%), Chile (-3.3%), and Egypt (-2.4%) have underperformed.  To put this in better context, MSCI EM rose 1.6% this week while MSCI DM rose 2.1%.
In the EM local currency bond space, Czech Republic (10-year yield -16 bp), Colombia (-13 bp), and Russia (-10 bp) have outperformed this week, while Brazil (10-year yield +26 bp), Argentina (+16 bp), and South Africa (+6 bp) have underperformed.  To put this in better context, the 10-year UST yield rose 5 bp to 2.30%.
In the EM FX space, TRY (+2.6% vs. USD), MYR (+1.3% vs. USD), and ILS (+1.3% vs. USD) have outperformed this week, while COP (-2.7% vs. USD), CLP (-2.0% vs. USD), and BRL (-1.8% vs. EUR) have underperformed.

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