Tag Archives: emerging markets

There’s never a good time for a trade war. Yet here we are on the cusp of one between the US and the EU over unfair aircraft subsidies and comes at a time when renewed COVID-19 outbreaks are making the global economic outlook even cloudier. These developments suggest some caution ahead is warranted for risk assets like EM and equities. RECENT DEVELOPMENTS Back in April, the WTO set forth two distinct pandemic scenarios for world trade. The “relatively optimistic”...

By Dara O’Sullivan, Derrick Leonard, and Ilan Solot There were minimal changes to the status quo as the week commences. Bangladesh has announced revised trading hours on the local exchanges. No change of status in Nigeria and Kenya as they both continue to face limited liquidity. Please see trading comments below. Bangladesh: Effective June 18, the Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE) revised their trading hours until further notice. The...

EM and other risk assets stabilized to end the week after Thursday’s selloff, but remain vulnerable. The risks ahead are the same as before, which include a second wave of infections as well as a longer and shallower than expected recovery in global growth. The Fed’s message of low rates as far as the eye can see was balanced by Powell’s grim outlook for unemployment. The liquidity story should remain positive for EM, with the BOE expected to increase its QE this...

The dollar remains under pressure, due in large part to the Fed’s aggressive efforts to inject stimulus. We see dollar weakness persisting near-term. From a longer-term perspective, we note that the greenback remains largely rangebound and is unlikely to fall below its 2018 lows. Dollar Index, 2015-2020 - Click to enlarge RECENT DEVELOPMENTS There is a growing debate as to the root causes of recent dollar weakness. Is it the burgeoning national debt? The poor US...

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)...

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...

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...

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...

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...

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...