Tag Archives: emerging markets

Summary Fitch upgraded Taiwan by a notch. Thailand has a new king. South Africa’s Finance Minister Gordhan has been summoned to appear in court to face charges. Brazil’s Congress voted to approve a constitutional amendment to freeze government spending in real terms for at least the next 10 years. Brazil’s Petrobras cut fuel prices and introduced a new pricing mechanism. Stock Markets In the EM equity space...

In the years before the 2008 financial crisis, investors flocked to equities in fast-growing emerging economies. But when the crisis put the brakes on global growth, that attraction to emerging markets proved a fickle one, and investors sought safe haven in less risky investments. In late 2016, however, the pendulum is swinging back again, with investors citing several reasons for renewed confidence in emerging market equities. Among the most surprising? Their politics are relatively more...

Stock Markets Despite the weaker than expected US jobs report, the dollar remains firm and EM is ending the week on a soft note.  The main culprit was higher US rates, with the 2-year yield moving up to 0.85% and is the highest since early June.  Concerns about Brexit impact and as well the health of European banks remain ongoing and could weigh on risk sentiment this coming week.  Lastly, oil may come under more...

Summary China reported lower than expected September reserve figures. Polish central bank Governor Glapinski adjusted the forward guidance. Brazil will open up development of its so-called pre-salt oil fields to foreign companies. Colombia’s referendum on the FARC peace agreement failed by a razor-thin 50.2% to 49.8% margin. In the EM equity space as measured by MSCI, Brazil (+5.3%), Czech Republic (+4.4%), and...

Stock Markets EM initially benefitted from the FOMC decision, but softened into the weekend.  One culprit was lower oil prices, as reports suggest an output deal is unlikely at the OPEC meeting this week in Algeria.  But it wasn’t just EM, as the greenback closed firmer against the majors as well.  We still believe that risk and EM should do fine over the next few weeks, as the Fed basically set a two-month window of...

Summary The Hungarian central bank capped the amount commercial banks can keep at its 3-month deposit facility. S&P upgraded Hungary from BB+ to BBB- with stable outlook. Bank of Israel will move to 8 meetings per year starting in 2017, down from 12 currently. S&P raise the outlook on Russia’s BB+ rating from negative to stable. The South African Reserve Bank signaled a potential end of the tightening...

Julius Baer Group Ltd. said Asia may overtake Europe as its biggest revenue-generating region, as the Swiss wealth manager steps up hiring in Hong Kong and Singapore. “In the next five years, Asia could be the biggest region for us if we grow at double-digit” rates, Chief Executive Officer Boris Collardi said Wednesday in an interview in Singapore. More than half of about 200 new bankers that Julius Baer plans to hire...

[unable to retrieve full-text content]EM ended the week on a soft note. Volatility is likely to remain high as markets are jittery and choppy ahead of the BOJ/FOMC meetings on Thursday. Dollar gains were broad-based last week, but EM certainly underperformed. China markets will reopen after a two-day holiday, but good news out of the mainland is doing little to help EM.

Summary The IEA forecast that the surplus in global oil markets will last for longer than previously thought. Philippine President Duterte called for US troops to leave the southern island of Mindanao. Relations between Poland and the EU are deteriorating. Former head of Brazil’s lower house Eduardo Cunha was expelled and banned from public office for eight years. Brazil’s central bank cut the amount of daily...

EM ended last week on a soft note. Perhaps it was the North Korean nuclear test (see below).  Perhaps it was disappointment in the ECB or rising Fed tightening odds. Whatever the trigger was, EM FX weakness persisted and appears likely to carry over into this week. Indeed, as the September 21 FOMC meeting approaches, markets are likely to get even more jittery and choppy.  Just to keep things in perspective,...