Investor Insights
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
The global backdrop for EM remains challenging. Trade tensions remain high and show no sign of letting up. China PMIs will offer the first snapshot of the economy for May and it won’t be pretty. Lastly, press reports suggest the US will consider allowing tariffs on countries that have undervalued currencies. No good will come of this for EM.
28 May 2019
Game Over, Zambia – Please Insert IMF Token to Continue Playing
In the world of emerging and frontier markets, there is rarely a dull moment. But while countries like Venezuela or Argentina continue grabbing headlines, one country in southern Africa is starting to creep ever so slowly into the limelight – and it’s not Mozambique.
24 May 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM remains hostage to global trade tensions. Last week’s moves by the US to with regards to Japan, EU, Canada, and Mexico should only be viewed as a change in tactics. China is now the sole focus, but these other trade skirmishes are likely to flare again. We remain negative on EM within this environment.
20 May 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX ended last week on a firm note on optimism that a trade deal will be reached. We think that optimism is misplaced and so look for EM weakness to resume this week. Indeed, rhetoric from both sides over the weekend suggest things will get worse before they get better.
13 May 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX was whipsawed last week by conflicting Fed views and softer than expected US weekly earnings. We continue to believe that the bar is set very high for a rate cut this year, and that markets have not adjusted accordingly yet. The divergence theme that favors the dollar should come back to the forefront as RBA, RBNZ, and Norges Bank are all likely to deliver dovish holds. Indeed, there are…
7 May 2019
Brazil: Lack of Focus or Lack of Interest?
President Bolsonaro loses focus all too easily. Instead of discussing public policies to promote growth and tackle high unemployment, he again criticized IBGE’s methodology for determining the unemployment rate. He says that these numbers serve "to deceive the populace," thus implying that the situation is better than the data indicated.
2 May 2019
Ashmore Group: Beware of Big Fiscal
Having exhausted most monetary policy levers, fiscal stimulus appears to be the ultimate go-to solution for lack of growth in the developed world – but it is often very costly, and tends to stand in the way of deeper, much-needed structural reform. Ashmore's Jan Dehn looks at how this dilemma may be resolved.
30 Apr 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX had an awful week, with virtually every currency down against the dollar. The lone exception was MYR, which managed to end flat on the week. The divergence theme remains supportive for the dollar, and that should keep downward pressure on EM. We may see some corrective bounces from time to time but we remain negative on EM. FOMC meeting and China PMI readings should help set the tone for…
29 Apr 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
The dollar rally is back on track as the divergence theme re-emerges. DXY traded last week at its highest level since April 2 and is on track to test that day’s cycle high near 97.71. For EM, that has translated into broad-based losses this past week. ARS, RUB, and a handful of other were able to notch small gains last week, but most EM currencies were down against the greenback. COP, BRL, ZAR,…
23 Apr 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX is coming off a good week, capitalizing on broad-based dollar weakness. Better than expected data out of China helped boost market sentiment too. Key US and China data will come out this week and should help determine the short-term outlook for the dollar.
15 Apr 2019