Emerging Market FX ended Friday on a mixed note, as risk assets recovered a bit from broad-based selling pressures. Best Emerging Market performers on the week were ZAR, PHP, and CNY while the worst were COP, RUB, and ARS. Besides the risk-off impulses still reverberating through global markets, we think lower commodity prices are another headwind on EM.
12 Feb 2018
With fresh forecasts predicting a deceleration in the country’s economic contraction and borrowers making fresh strides in the local credit market, Nigeria is poised to make strong gains in 2018. Transforming those gains into longer-term sustainable growth will depend heavily on the country’s commitment to reforms, but with elections in the offing and oil prices rising, some analysts question its…
9 Feb 2018
The decline in the Dollar versus Emerging Markets (EM) currencies began two years ago with more room to run, in our view. The unwinding of QE policies in the coming years will continue to weigh on the Dollar, and EM stands to benefit as capital inflows to EM ease important financial constraints. This should unleash stronger domestic demand and eventually more rate hikes than the Fed will deliver.
8 Feb 2018
With Zimbabwe’s infamous revolutionary-turned-dictator Robert Mugabe out and one of his main rivals left to pick up the pieces of an economy in tatters, the country’s prospects are anything but clear. Analysts are optimistic that policymakers can find a path to normalisation – creating significant opportunities for international and regional lenders, and the country’s credit markets, in the…
30 Jan 2018
Vietnam has become one of the most stable and high-performing economies in Asia over the past decade, providing a cheaper alternative for global production and manufacturing giants to the resurgent China. As the country looks to develop and further open its capital markets, unsustainable credit growth and the burden of funding the Party machine could bring a dark twist to this tale of prosperity.
26 Jan 2018
I have covered Paraguay since 2004, when I was working for Merrill Lynch. At that time, to open a relationship in Paraguay and get all approvals from compliance was a nightmare. The ROI was amazing, but the headache given by the account was three times greater than any other country in the region, too. Since 2003, however, Paraguay changed a lot.
22 Jan 2018
YES Bank opened a gateway into the Japanese market with a dual-currency syndication that attracted an unusually high number of Taiwanese lenders.
12 Dec 2017
It has been a stellar year for emerging market credit, with most of the key benchmark indices outperforming and EM fundamentals broadly improving – while the global economy continues to heat up. But with QE – one of the main forces driving yield-hungry investors into EMs – winding down, a slew of EM elections on the horizon, and uncertainty over the direction of large developed economies like the…
7 Dec 2017
How far can this EM FX correction go? Since mid-November, the greenback has been broadly softer due to a variety of factors. EM FX has taken advantage of this, and the top EM performers are ZAR (+5.5%), MXN (+3.8%), and RUB (+3%). TRY has been noticeably lagging, -1.4% since November 15. Many EM currencies are starting to bump up against key chart points, and so the dollar may finally get some…
1 Dec 2017
With real GDP growth at near zero and fiscal projects trending downward, it’s unsurprising Standard & Poor’s didn’t wait for the ANC leadership contest in late 2017, or the next budget release, to cut the country’s credit rating to junk. The real question now is: how quickly can the country reverse course?
29 Nov 2017