Tag Archives: emerging markets

Stock Markets EM FX was whipsawed last week but ended on a firm note. We look past the noise and believe that the true signals for EM remain higher US interest rates and continued trade tensions, both of which are negative. Turkish markets reopen after a week off. Nothing fundamentally has changed there, and so it still poses some spillover risk to wider EM. Stock Markets Emerging Markets, August 22 - Click to...

Stock Markets EM FX stabilized last week as the situation in Turkey calmed somewhat. Reports Friday that the US and China are hoping to resolve the trade dispute also helped EM FX ahead of the weekend. However, TRY remains vulnerable as the US threatens more sanctions due to the pastor. Both S&P and Moody’s downgraded it ahead of the weekend and our own ratings model points to further downgrades ahead. Turkish...

Stock Markets EM FX came under greater pressure last week as the situation in Turkey deteriorated.  With no weekend developments as of this writing, we expect Turkish assets to remain under pressure this week. Five worst EM currencies YTD are TRY (-41%), ARS (-36%), RUB (-15%), BRL (-14.5%), and ZAR (-12%). All five have serious baggage that warrants continued underperformance.Yet it’s worth noting that the five best...

Stock Markets EM FX has come under pressure again due to ongoing trade tensions and rising US rates but saw some modest relief Friday after the PBOC announcement on FX forwards. This helped EM FX stabilize, but we do not think the negative fundamental backdrop has changed. Best performers last week were MXN, PHP, and PEN while the worst were TRY, ZAR, and KRW. Stock Markets Emerging Markets, August 01 - Click...

The risk budget is unchanged again this month. For the moderate risk investor, the allocation between bonds and risk assets is evenly split. The only change to the portfolio is the one I wrote about last week, an exchange of TIP for SHY. Interest rates are on the rise again, the 10 year Treasury yield punching through 3% again this morning. That is an indication that growth and/or inflation expectations have risen...

Stock Markets EM FX enjoyed a respite from the ongoing selling pressures, with most currencies up on the week vs. the dollar. Best performers were CLP, MXN, and ZAR while the worst were TRY, CNY, and COP.  BOJ, Fed, and BOE meetings this week may pose some risks to EM FX. Stock Markets Emerging Markets, July 25 - Click to enlarge South Africa South Africa reports June money, loan, and budget data Monday. June...

We are waiting for trade-war clouds to become less threatening before adopting a more positive stance on EM debt.In a Flash Note in May, we argued that the rise in yields of emerging market (EM) debt could offer compelling opportunities for investors who had the patience to ride out the storm. EM credit spreads and yields have indeed recently being shown some signs of stabilising after a period of rising yields. The faltering rise in US Treasuries yields, some effective EM rate hikes and the...

Stock Markets EM FX saw some violent swings last week, due in large part to some unhelpful official comments Friday. BRL and TRY were the best performers last week, while RUB and CLP were the worst. When all is said and done, however, we think Fed policy remains unaffected and so we remain negative on EM FX. Also, global trade tensions remain high after Trump threatened tariffs on all Chinese imports entering the US....

A survey of central banks and sovereign wealth funds by Invesco sheds light on their investment plans. The traditional separation of markets and the state may be helpful for ideological arguments, but the real situation is more complicated. Central banks and their investment vehicles (sovereign wealth funds) are market participants. In some activities, such as custodian, central banks compete with the private sector....

Stock Markets EM FX ended Friday mixed, capping off a mostly softer week. TRY, MXN, and RUB were the top performers and the only ones up against USD, while ARS, CLP, and BRL were the worst.  Looking ahead, US jobs data on Friday pose some risks to EM, coming on the heels of a higher than expected 2% y/y rise in PCE. China will also remain on the market’s radar screen, with the first snapshots of June economic activity...