Tag Archives: emerging markets

Stock Markets EM FX put in a mixed performance Friday, and capped off an overall mixed week. Over that week, the best performers were IDR, TRY, and INR while the worst were BRL, MXN, and ARS. US yields are recovering and likely to put renewed pressure on EM FX. Stock Markets Emerging Markets, May 30 Source: economist.com - Click to enlarge Indonesia Indonesia reports May CPI Monday, which is expected to rise...

Stock Markets EM FX has started the week mixed. Some relief was seen as US rates stalled out last week, but this Friday’s jobs number could be key for the next leg of this dollar rally. On Wednesday, the Fed releases its Beige book for the upcoming June 13 FOMC meeting, where a 25 bp hike is widely expected. We believe EM FX remains vulnerable to further losses. Stock Markets Emerging Markets, May 23 Source:...

Summary President Trump canceled the planned summit with North Korea’s Kim Jong Un. Malaysia’s new Finance Minister Lim was sworn in along with 13 other cabinet ministers. Philippine central bank cut reserve ratios for commercial banks by one percentage point to 18% effective June 1. The United Arab Emirates opened up its economy to more foreign investment. Brazil state-run oil company Petrobras cut the price of...

Stock Markets EM FX ended Friday on a weak note and extended the slide. For the week as a whole, the best EM performers were PHP, TWD, and SGD while the worst were ARS, ZAR, and TRY. With US rates continuing to move higher, we believe selling pressures on EM FX will remain in play this week. Our recently updated EM Vulnerability Table supports our view that divergences within EM will remain. Stock Markets Emerging...

There are a lot of reasons why interest rates may have risen recently. The federal government is expected to post a larger deficit this year – and in future years – due to the tax cuts. Further exacerbating those concerns is the ongoing shrinkage of the Fed’s balance sheet. Increased supply and potentially decreased demand is not a recipe for higher prices. In addition, there is some fear that the ongoing trade...

Summary Bank Indonesia started a tightening cycle with a 25 bp hike to 4.5%. Jailed Malaysia opposition leader Anwar Ibrahim was released by new Prime Minister Mahathir. Malaysia scrapped the controversial 6% goods and services tax (GST). Violent protests shook Israel as the relocated US embassy opened in Jerusalem. Argentina committed to fiscal tightening as part of a comprehensive IMF program. Brazil central bank...

The risk budget changes this month as I add back the 5% cash raised in late October. For the moderate risk investor, the allocation to bonds is still 50% while the risk side now rises to 50% as well. I raised the cash back in late October due to the extreme overbought nature of the stock market and frankly it was a mistake. Stocks went from overbought to more overbought and I missed the rally to all time highs in...

Swiss Franc The Euro has fallen by 0.40% to 1.1804 CHF. EUR/CHF and USD/CHF, May 16(see more posts on EUR/CHF, USD/CHF, ) Source: markets.ft.com - Click to enlarge FX Rates The US dollar is mixed today after the Dollar Index rose to new 2018 highs yesterday. It is being driven by rising US rates, which also punishes short dollar positions. The US 10-year yield rose seven basis points yesterday to nearly 3.10%. It...

Stock Markets EM FX ended Friday on a week note and capped of another generally negative week.  Worst performers last week were ARS, BRL, and TRY while the best were ZAR, RUB, and KRW. We remain negative on EM FX and look for losses to continue. US retail sales data Tuesday pose further downside risks to EM FX. Stock Markets Emerging Markets, May 08 - Click to enlarge India India reports April WPI and...

The yield on the 10 year Treasury note briefly surpassed the supposedly important 3% barrier and then….nothing. So, maybe, contrary to all the commentary that placed such importance on that level, it was just another line on a chart and the bond bear market fear mongering told us a lot about the commentators and not a lot about the market or the economy. As I said last month, despite the recent run up in rates, the...