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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

Dollar Firm as US-China Tensions Continue to Rise

4 days ago

Tensions between the US and China continue to rise; the dollar is finding some traction
Fed Beige Book contained no surprises; NY Fed President Williams said the Fed is “thinking very hard” about targeting yields; weekly jobless claims are expected at 2.1 mln vs. 2.438 mln last week
Germany reports May CPI; ECB is likely to ease next week; BOE continues to show its dovish colors; Poland is expected to keep rates steady at 0.5%
Japan’s Cabinet Office maintained its view that the economic outlook continues to deteriorate; Korea cut rates 25 bp to 0.5%, as expected
The dollar is mostly firmer against the majors as US-China tensions continue to rise.  Stockie and Kiwi are outperforming, while Nokkie and Aussie are underperforming.  EM currencies are mostly softer.

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Asia Lockdowns vs. Re-Openings

5 days ago

By Ilan Solot and Kieran Chard
We apply the five-factor model used to analyse lockdowns and openings in developed markets and in Latin America to Asian Markets. It evaluates the restrictions imposed by different countries in the region, how they compare in terms of severity of lockdown, and where they are heading in the spectrum of reopening. The scale we use measures grade restrictions from 1 (open) to 4 (closed) across the following five factors: (a) schools/universities, (b) non-essential businesses, (c) borders, (d) social distancing and (e) severity of penalties/prosecution. Please see the below table for the breakdown of the measure’s ratings.

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China
China recorded the world’s first case on the December 31 in the Hubei province, taking just 24

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Hong Kong Turbulence Likely to Rise as US-China Relations Worsen

7 days ago

Recent moves by China call into direct question the “one country, two systems” approach. Hong Kong assets have held up surprisingly well but we see turbulence ahead as US-China relations are set to deteriorate further.
POLITICAL OUTLOOK
Legislation was introduced last week that allows Beijing to directly impose a national security law on Hong Kong. Local legislative approval would be circumvented but Chief Executive Lam said Hong Kong authorities would fully cooperate with China to enact the legislation. Protests erupted in Hong Kong over the weekend and are likely to persist. The security law would allow China to directly address political dissent in Hong Kong, something that Lam has been unable to do. Yet this move calls into question the “the one country, two

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Restricted Market Trading Comments

7 days ago

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot
Covid-19 related measures for restricted markets remain largely unchanged this week. Philippines, Bangladesh and Kuwait have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity. Please see trading comments below
Sri Lanka: The Colombo Stock Exchange (CSE) resumed operations on May 11, 2020 following an extended period of closure. Foreign exchange trading is still permitted between the hours of 8:30am and 1.15pm.

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Bangladesh: On May 14 the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) announced they will remain closed until May 30. Local banks will continue to operate on the reduced hours of 10:00am to 2:30 pm. While there is no trading and settlement

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Dollar Firm as China’s Hong Kong Gambit Triggers Risk-Off Trading

12 days ago

Legislation was introduced that allows Beijing to directly impose a national security law on Hong Kong; US-China tensions are still rising; the dollar is bid as risk-off sentiment takes hold
There are no US data reports or Fed speakers today; Canada reports March retail sales; Mexico reports mid-May CPI
ECB publishes the account of its April 30 meeting; UK reported April retail sales and public sector net borrowing; parts of the UK curve remain negative
China scrapped its long-standing policy of setting an annual growth target
Legislation was introduced that allows Beijing to directly impose a national security law on Hong Kong; political risk has seen USD/HKD move off the strong end of the 7.75-7.85 trading band
BOJ met overnight; Fitch cut the outlook on its AAA

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Dollar Firm as US-China Tensions Flare

13 days ago

The virus news stream is mixed; the dollar has stabilized; US-China tensions continue to ratchet up
We will get some more US economic data for May; weekly jobless claims are expected at 2.4 mln
Eurozone and UK reported firm preliminary May PMI readings; BOE officials continue to take a very dovish tone
South Africa is expected to cut rates 50 bp to 3.75%; Turkey is expected to cut rates 50 bp to 8.25%
Japan and Australia reported preliminary May PMIs; Korea reported weak trade data for the first 20 days of May

The dollar is broadly firmer against the majors as rising US-China tensions dent market sentiment. Euro and sterling are outperforming, while the Antipodeans are underperforming. EM currencies are mixed. INR and RUB are outperforming, while CNY and TRY are

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Dollar Treads Water Ahead of FOMC Minutes

14 days ago

The virus news stream is mixed; the dollar has stabilized a bit
FOMC minutes will be released; Canada reports April CPI and March wholesale trade sales; the news from Brazil keeps getting worse
Another group of EU nations will release their own plan in a rebuttal of France and Germany; UK reported April CPI data
Japan reported March core machine orders; Australia reported weak preliminary April retail sales
China kept its benchmark Loan Prime Rates unchanged; Thailand cut rates 25 bp to 0.50%, as expected

The dollar is mostly weaker against the majors. Kiwi and Swissie are outperforming, while yen and sterling are underperforming.  EM currencies are mixed. ZAR and RUB are outperforming, while KRW and TRY are underperforming. MSCI Asia Pacific was up 0.5% on the

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Restricted Market Trading Comments

16 days ago

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot
Covid-19 related measures for restricted markets remain largely unchanged this week. Philippines, Bangladesh and Kuwait have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity. Please see trading comments below
Sri Lanka: The Colombo Stock Exchange (CSE) resumed operations on May 11, 2020 following an extended period of closure. Foreign exchange trading is still permitted between the hours of 8:30am and 1.15pm.

Bangladesh: On May 14 the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) announced they will remain closed until May 30. Local banks will continue to operate on the reduced hours of 10:00am to 2:30 pm. While there is no trading and settlement

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Dollar Firm as Risk-off Sentiment Intensifies

20 days ago

Risk-off sentiment has intensified; as a result, the dollar is getting some more traction
Fed Chair Powell pushed back against the notion of negative rates in the US; US Treasury completed its quarterly refunding
Weekly jobless claims are expected at 2.5 mln vs. 3.169 mln last week; Mexico is expected to cut rates 50 bp to 5.5%There have been growing discussions about negative rates in the UK; weak UK data, rising Brexit risks, and a more dovish BOE have taken a toll on sterling
ECB Vice President de Guindos said the region’s economy has “hit the bottom”; the EC is getting ready to roll out a new economic plan to help the most affected countries
Japan machine tool orders plunged -48.3% y/y in April; Australia reported weak April jobs data
The dollar is mostly

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Dollar Mixed as Markets Await Fresh Drivers

21 days ago

The virus news stream is mixed; the dollar continues to consolidate; US-China tensions continue to rise
US Treasury wraps up its quarterly refunding; April budget statement is a harbinger of things to come; the next round of stimulus will be contentious
We got some dovish BOE comments yesterday; UK continues to play Brexit hardball; UK data was slightly better than expected but awful nonetheless
Japan reported March current account data; RBNZ expanded its QE program and opened the door for negative rates; Malaysia’s Q1 GDP surprised on the upside

The dollar is mixed against the majors as markets await fresh drivers. Nokkie and Loonie are outperforming, while Kiwi and Swissie are underperforming. EM currencies are mixed. MXN and RUB are outperforming, while HUF

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Different Type of Crisis, Some Old Concerns

22 days ago

Over the past two months we have witnessed historic turmoil followed by unprecedented intervention by policy makers and central banks in supporting the capital markets (and more). In many ways the 2020 COVID-19 pandemic is very different from the 2008 global financial crisis, but for some, certain old concerns still linger. In the face of short selling bans and worries about market liquidity, we discuss below how best to navigate some of the common objections and concerns related to securities lending and how to position your securities lending program in the current environment and beyond.
Fees and performance remain top of mind
Even more than before, investors in investment funds are increasingly aware of the relationship between fees and performance. Every

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Restricted Market Trading Comments

23 days ago

Restricted Market Trading Comments
By Dara O’Sullivan, Derrick Leonard, and Ilan Solot
Covid-19 related measures for restricted markets remain largely unchanged from last week. Sri Lanka and India have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity. Please see trading comments below
Sri Lanka: The Colombo Stock Exchange (CSE) resumed operations today following an extended period of closure. Foreign exchange trading is still permitted between the hours of 8:30am and 1.15pm.

Bangladesh: On May 7, 2020, the Bangladesh Bank (BB), the central bank, amended banking hours to the new time of 10:00am to 2:30 pm. On May 5, the government announced market lockdown will continue until May 16. While there is no trading and

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Dollar Mixed as Doves Fly

27 days ago

Measures of cross-market implied volatility have been stable for a few weeks now
Weekly jobless claims are expected at 3 mln; reports suggest House Democrats are pushing ahead with a possible vote next week on another relief package
Canada reports April Ivey PMI; Peru is expected to keep rates steady; Brazil COPOM delivered a dovish surprise last night
The Bank of England delivered a dovish hold; The Norges Bank surprised markets with a 25 bp cut to 0%; Czech National Bank is expected to cut rates 50 bp to 0.50%
Eurozone data came in  very weak; China data were mixed; Philippines Q1 GDP contracted -5.1% q/q
The dollar is mixed against the majors after the BOE delivered a dovish hold.  Nokkie and Aussie are outperforming, while Swissie and yen are underperforming.

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Negative News from Europe Helps Dollar Build on Gains

28 days ago

UK has been confirmed to have the highest death toll in Europe the dollar is getting more traction
Reports suggest Congress is resisting President Trump’s call for a payroll tax cut; ADP private sector jobs data is expected to come in at -21 mln
Brazil is expected to cut rates 50 bp; Fitch cut its outlook on Brazil to negative; Chile is expected to keep rates steady
Sterling remains under pressure as Brexit talks sour; the EC warned that the future of the eurozone is at risk if the pandemic response is badly handled
Central Bank of Russia will release its quarterly inflation report; reports suggest China policymakers may drop a growth target for this year
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The dollar is mostly firmer against the majors as it continues to build on recent gains. Yen and Aussie are

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Restricted Market Trading Comments

29 days ago

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot
Covid-19 related measures for restricted markets remain largely unchanged from last week. Sri Lanka and India have extended their lockdown periods, while Kenya and Nigeria continue to face limited liquidity. Please see trading comments below
 
Sri Lanka: The government announced on May 1 that the current lockdown will remain in place until May 11, when it will be reviewed. The Colombo Stock Exchange (CSE) remains closed. Foreign exchange trading is still permitted between the hours of 8:30am and 1.15pm.

Philippines: The market continues to operate under reduced hours from 9:00 to 14:00 until May 15. The cut off for FX activity is set at 2:00 pm.

India: The Reserve Bank of India (RBI) announced on April 30 an

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Dollar Remains Under Pressure as Europe Unveils Some Plans to Reopen

May 3, 2020

Global equity markets continue to trend higher; the dollar remains under pressure
The two-day FOMC meeting ends today; the first look at Q1 US GDP comes out
France and Spain laid out plans to reopen; the UK will rely on a contact tracing plan to limit the viral spread
Ahead of the ECB meeting Thursday, European policymakers are showing a similar willingness to act as needed
Fitch cut Italy by a notch to BBB- with stable outlook; Germany reports April CPI
Reports suggest that governors in Japan will ask the national government to extend the state of emergency; Australia reported higher than expected Q1 CPI
The dollar is mostly weaker against the majors as risk-on sentiment persists.  Kiwi and Loonie are outperforming, while Nokkie and sterling are underperforming.

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Some Thoughts on Recent Foreign Exchange Intervention

May 1, 2020

Dollar softness this week will take some pressure off of the foreign currencies but it’s too early to sound the all clear.  This piece focuses on how  central banks around the world may be intervening to influence their currencies.  Most of the world, particularly EM, is grappling with supporting weak currencies but a select few are dealing with stronger currencies. This is a very opaque process and so we are simply making our best guesses.  As April reserves data trickle out, we will update our numbers.
One must take care to adjust for valuation effects.  That is, the dollar has risen about 3% YTD vs. the euro and 6% YTD vs. sterling and so the dollar value of any reserve holdings in those currencies will fall.  On the other hand, the dollar has lost about 2%

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Restricted Market Trading Comments

April 30, 2020

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot
As the week commences, a few markets such as Sri Lanka and Philippines are extending their lockdown periods while others such as Nigeria and Kenya continue to experience USD liquidity issues. Please see comments below.
Sri Lanka: The Colombo Stock Exchange (CSE) was expected to resume operations on April 27 but, due to an uptick in Covid-19 cases, the exchange remains closed until May 4. Foreign exchange trading is still permitted between the hours of 8:30am and 1.15pm.

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Philippines: The market extended the current period of reduced operating hours from 9:00 to 14:00 until May 15, 2020. The cut off for FX activity remains 2:00 pm.

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Nigeria: Liquidity issues continue in the Nigerian market. The CBN remains

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Dollar Remains Under Pressure as Risk-on Sentiment Persists

April 28, 2020

The death toll from the virus continues to trend lower in Europe and the US; the dollar remains under some pressure
The Fed announced an expansion of its Municipal Liquidity Facility (MLF); regional Fed manufacturing surveys for April continue to roll out; other data will be reported
Sweden kept rates and QE steady, as expected; Hungary is expected to stand pat too
Oil prices are tumbling again
Japan reported soft March jobs data; HKMA stepped up its intervention today

The dollar is broadly weaker against the majors as risk-on sentiment persists. The Scandies are outperforming, while Swissie and Kiwi are underperforming. EM currencies are mostly firmer. ZAR and MXN are outperforming, while IDR and MYR are underperforming. MSCI Asia Pacific was up 0.7% on the day,

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Drivers for the Week Ahead

April 27, 2020

The FOMC meets Wednesday; first look at Q1 US GDP comes out Wednesday; weekly jobless claims Thursday are expected at 3.5 mln vs. 4.427 mln last week
Italy dodged a bullet last Friday; ECB meets Thursday; eurozone reports Q1 GDP and April CPI data ahead of the ECB decision; Sweden’s Riksbank meets Tuesday
BOJ meets Monday; Japan has a busy data week after the BOJ meeting
The dollar continues to edge higher. On Friday, DXY traded at the highest level since April 6 before surrendering some of those gains. It is likely to test the April 6 high near 100.931 but a break above the 101.188 area is needed to set up a test of the March 20 cycle high near 103. The euro traded Friday the lowest level since March 24 but has recovered back above the $1.08 area. Sterling

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Thoughts on the Potential Market Impact of US Downgrades

April 25, 2020

Our sovereign rating model suggests the US will lose its AAA/Aaa rating.  With fiscal stimulus efforts continuing with this latest $484 bln package, the case for downgrades just keep getting stronger but the timing is unclear.  How might markets react?  We look back to 2011 for some clues.
RECENT DEVELOPMENTS
The White House and House Democrats struck a deal on a new aid package worth $484 bln.  The extra $500 bln amounts to about 2.5% of GDP.  The IMF estimated that the US budget deficit would be -15.4% of GDP.  Another 2.5 percentage points would move the deficit closer to -20% of GDP this year and that is simply incompatible with a AAA rating.  The IMF sees the deficit narrowing to -8.6% of GDP in 2021 but seems too optimistic.  During the financial crisis,

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Dollar Steady as Global Economy Falls Off a Cliff

April 25, 2020

The virus news stream is negative today; the dollar is trying to build on its recent gains
Weekly jobless claims are expected at 4.5 mln vs. 5.245 mln last week; regional Fed manufacturing surveys for April continue to roll out
ECB confirmed reports that it will accept sub-investment grade debt as collateral; EU leaders will hold a video conference today
Preliminary April eurozone PMI readings were awful; UK readings were even worse
Japan reported weak preliminary April Japan PMI readings
The dollar is mixed against the majors as global economic data continue to weaken.  Nokkie and Kiwi are outperforming, while Swissie and euro are underperforming.  EM currencies are also mixed. RUB and INR are outperforming, while HUF and RON are underperforming.  MSCI Asia

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EM Sovereign Rating Model For Q2 2020

April 23, 2020

The major ratings agencies are punishing Emerging Markets (EM) credits much more than their DM counterparts.  Our own sovereign ratings model suggests that there is still more pain to come.
We have produced this interim ratings model to assist investors in assessing relative sovereign risk across the major EMs.  While the situation is still fluid with regards to the ultimate coronavirus impact on the global economy as well as the policy responses, we thought it would be useful to measure the potential ratings impact of this unprecedented economic crisis.
We have to stress that we are assuming that the ratings agencies have not changed their methodologies.  Our own model was constructed on the long-standing metrics that help determine a country’s

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Dollar Stalls as Market Sentiment Improves

April 22, 2020

The virus news stream remains mixed; oil remains at center stage with still extreme volatility.
The White House and House Democrats struck a deal on a new aid package worth $484 bln
Canada reports March CPI; Mexico delivered a surprise 50 bp cut to 6.0% yesterday afternoon
ECB will consider accepting sub-investment grade bonds as collateral in its operations; reports suggest Italy will boost its fiscal stimulus efforts
UK reported March CPI data; Turkey is expected to cut rates 50 bp to 9.25%; South Africa March CPI rose 4.1% y/y
Australia reported better-than-expected preliminary March retail sales
The dollar is broadly weaker against the majors as market sentiment improves.  The dollar bloc is outperforming, while Nokkie and euro are underperforming.  EM

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Dollar Firm as Equities and Oil Start the Week Under Pressure

April 20, 2020

The lockdown vs. opening debate continues in just about every country; the dollar is consolidating recent gains
Reports suggest the White House and House Democrats are nearing a deal on another aid package worth nearly $500 bln; the extra fiscal stimulus will add to downward ratings pressure on the US
Chicago Fed National Activity Index for March will be reported; late Friday, Moody’s downgraded Mexico a notch to Baa1 with negative outlook
The debate about re-opening has intensified in the UK; EU and UK will start the second round of Brexit talks today
Oil prices are under pressure again; Japan reported weak March trade data; China banks passed on the PBOC rate cuts, as expected
The dollar is mostly firmer against the majors as the new week begins with oil and

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Dollar Firm in Thin Holiday Trading

April 15, 2020

The virus news stream is mostly positive today; yet risk assets are starting the week under some modest pressure
The dollar took a hit last week but we think it will recover; some US data releases from Good Friday are worth repeating
With most of Europe closed today, the news stream from the region is very light; oil prices could not extend their gains today after OPEC+ finalized output cuts over the weekend
India March CPI is expected to ease to 5.90% y/y from 6.58% in February

The dollar is mostly firmer against the majors in thin holiday trading. Sterling and yen are outperforming, while Nokkie and euro are underperforming. EM currencies are mostly weaker. IDR and RUB are outperforming, while TRY and KRW are underperforming. MSCI Asia Pacific was down 0.6% on

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Dollar Under Modest Pressure as Europe Returns from Holiday

April 14, 2020

The tug of war between extending vs. softening lockdowns continues
The dollar remains under modest pressure but we think it will eventually recover; Bernie Sanders has endorsed Joe Biden
Europe reopens from holiday today but the news stream remains light; South Africa surprised with an emergency 100 bp rate cut
Japan Prime Minister Abe’s approval rating is taking a hit; China’s trade figures for March came in far better than expected
The dollar is mostly softer against the majors as Europe returns from holiday.  Stockie and Swissie are outperforming, while Loonie and Kiwi are underperforming.  EM currencies are mixed.  The CEE currencies are outperforming, while ZAR and MXN are underperforming.  MSCI Asia Pacific was up 1.7% on the day, with the Nikkei rising

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Restricted Market Trading Comments

April 8, 2020

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot
With many markets still under lockdown and some going out on Easter holidays this week, we continue to see amended trading hours. The most notable change has been in India with a reduction in trading hours, while in Nigeria we saw a small amount of liquidity being released by the Central Bank of Nigeria (CBN). Below are our updates for the week. Please get in touch if you would like further information or to discuss any of these markets.
India: The Reserve Bank of India (RBI) announced the market will reduce their operating hours across market products between April 7 until April 17. All markets will be open from 10:00am local time to 2:00pm local time. For any clients actively trading this market, please make

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Dollar Mixed, Equities Higher as Virus News Stream Improves

April 7, 2020

It was a relatively good weekend in virus-related news; measures of implied volatility continue to trend lower
The dollar is trying to build on its recent gains; investors continue to try and gauge just how bad the US economy will get hit
The outlook for oil prices remains highly uncertain and volatile
Germany signaled that its stance regarding aid to the weaker eurozone countries remains unchanged; the news stream for the UK has turned negative
Prime Minister Abe nearly doubled the size of the next stimulus package to JPY108 trln ($988 bln); Hong Kong Financial Secretary Paul Chan offered a sobering take on the local economy
The dollar is mixed against the majors as the holiday-shortened week begins on an upbeat note.  Nokkie and Aussie are outperforming, while

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EM Preview for the Week Ahead

April 6, 2020

EM may get a little support from a potential OPEC+ deal to limit oil.  Even if a deal is struck, the impact is likely to be fleeting as the global growth outlook remains terrible.  We remain negative on EM for the time being.
AMERICAS
Mexico reports March CPI Tuesday, which is expected to rise 3.37% y/y vs. 3.70% in February.  If so, inflation would move further towards the 3% target.  February IP will be reported Wednesday, which is expected to contract -1.2% y/y vs. -1.6% in January.  Central bank minutes will also be released that day.  At that emergency meeting, Banxico cut rates 50 bp to 6.5% and noted that it will repeat unscheduled decisions if needed.  As such, another 50 bp cut to 6.0% is likely either before or at the next policy meeting May 14.
Brazil

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