EM Country Research
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May 16, 2024 10:30 AM UTC
Most of the surge in debt/GDP in Japan and 40% in France is due to higher government debt and this should not be a binding constraint provided that large scale QT is avoided – we see the ECB slowing QT in 2025 and are skeptical about BOJ QT in the next few years. The adverse impact of higher deb
May 15, 2024 9:55 AM UTC
While part of corporate debt is quasi government (SOE and LGFV’s) and China creditors can be pursued to rollover by the authorities for larger borrowers, households and part of the private sector are focused on the previous buildup of debt. With China authorities reluctant to aggressive ease fis
May 13, 2024 7:54 AM UTC
The latest China money supply and lending figures show that private household and business lending is very subdued. More need to be done to boost credit demand as well as credit supply. However, the authorities desires to avoid too much Yuan weakness will likely mean that the next move is a 25bp
May 13, 2024 6:58 AM UTC
India's power sector faces rising demand and power shortages, sparking fears of the most significant power shortfall in a decade. With coal imports continuing to rise and hydropower generation declining, India's aim to become a manufacturing hub could become challenging. Energy transition is likely
May 10, 2024 1:06 PM UTC
Fed easing expectations for 2025 and 2026 can shift from a terminal 4% Fed Funds rate towards 3%, as the U.S. economy slows due to lagged tightening effects. Combined with Fed easing starting in September this should mean a consistent decline in 2yr yields. However, 10yr U.S. Treasury yields wil
May 10, 2024 12:44 PM UTC
Banxico's decision to maintain the policy rate at 11% reflects a cautious stance amidst rising inflation and a slowing economy. Despite external volatility, the MXN remains resilient. The main concern is services inflation being stickier. With a revised inflation forecast indicating a longer period
May 9, 2024 10:22 AM UTC
Bottom Line: Central Bank of Turkiye (CBRT) released the second quarterly inflation report of the year on May 9, and lifted end-year inflation prediction from 36% to 38% citing that the rebalancing process for demand will be more delayed compared to what was projected that in the first inflation rep
May 8, 2024 2:20 PM UTC
China equities can see a tactical bounce of 5-10% in the coming months. Cheap valuations and underweight global fund positions means that the scale of pessimism only has to get less bad on the economy and China authorities attitude towards businesses. While we see a tactical opportunity, we do
May 8, 2024 12:06 PM UTC
Bottom Line: The offensives at the front lines started to pick up steam after March/April as the Russian forces plan for their larger summer 2024 offensive operation, aiming to seize more territory before the U.S. presidential elections in November. In the meantime, U.S. approved a $61 billion warti
May 3, 2024 2:14 PM UTC
Bottom Line: According to the figures announced by the Russian Ministry of Economic Development, Russia's GDP grew by 4.2% YoY in March owing to strong fiscal stimulus, high military spending, invigorating consumer demand and investments. We now foresee Russian economy will expand by 2.6% in 2024
May 3, 2024 7:40 AM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on May 3 that Turkish CPI ticked up 69.8% annually and 3.2% monthly in April due to increases in transportation, restaurant & hotel and education prices, coupled with the lingering impacts of the wage hikes on the services sector. We feel u
May 2, 2024 10:50 AM UTC
Politburo statement in late April suggests extra support for residential property. However, we see this as being incremental rather than any game changers and we still see residential investment remaining a negative drag on 2024 GDP growth.
May 1, 2024 6:45 PM UTC
Bottom line: South Africa policy makers remain concerned about government debt trajectory, large domestic and international financing needs and elevated country risk premium before fast-approaching elections on May 29. We think South Africa’s general government fiscal balance and debt trajectory w
April 29, 2024 1:00 PM UTC
We feel that a devaluation of the Yuan is unlikely in 2024, both to avoid potentially politically destabilizing capital outflows but also to avoid upsetting the next U.S. president. Policy is geared more towards controlled depreciation to help competiveness but reduce other risks. The Yuan has a
April 29, 2024 11:26 AM UTC
In a pre-emptive move to both curb inflationary pressures and safeguard the Indonesia Rupiah (IDR) against furhter depreciation, Bank Indonesia, in a surprise move, increased its main policy rate by 25 bps to 6.25%. However, further rate hikes are not expected as the central bank remains wary of hur
April 26, 2024 9:30 AM UTC
Bottom line: While much focus is on the cyclical economic position to determine 2024 monetary policy prospects, the 2025-28 structural growth trajectory differs to the pre 2020 GDP trajectory for major economies. While global fragmentation has a role to play, aging populations are already having a
April 24, 2024 9:30 AM UTC
Total non-financial sector debt, plus the IMF estimates of government debt/GDP, do seem to matter for the action of China authorities, as fiscal policy stimulus is targeted rather aggressive as in 2009 or 2015. The overall debt picture also matters for the growth outlook, as the excess debt/GDP le
April 24, 2024 9:26 AM UTC
Bottom line: According to the Monetary Policy Review Report by the South African Reserve Bank (SARB) on April 23, the risk of higher inflation still remains and inflation returning to the midpoint of the target band is only expected in the last quarter of 2025. SARB highlighted in its report that ma
April 23, 2024 11:12 AM UTC
With inflation within target range and the need to defend the currency amid global uncertainties and US dollar strength, Bank Indonesia (BI) is likely to extend its pause on rate adjustments in the upcoming monetary policy meeting on April 24. BI remains committed to stabilising the Indonesian rupia
April 22, 2024 3:18 PM UTC
The Constitutional Court dismissed cases against Vice President Gibran Rakabuming Raka and President Joko Widodo. In Gibran's case, the court didn't disqualify him from running for president but sanctioned the election committee for not amending regulations following a previous ruling. This ruling l
April 19, 2024 1:14 PM UTC
Bottom line: We continue to foresee two possible outcomes of South African presidential elections on May 29, either an African National Congress (ANC) win or a coalition government. According to recent polls, ANC is at the serious risk of losing its majority dipping below 50%, even as low as 37% acc
April 19, 2024 12:18 PM UTC
Bottom Line: Turkiye’s annualized current account deficits (CAD) stood at $31.8 billion as of February 2024 when compared to $37.6 billion a month earlier, driven by a marginal increase in the services surplus, a reduction in the gold trade deficit, and a recovery in net energy trade. We envisage
April 18, 2024 2:00 PM UTC
Bottom Line: A China coastguard vessel blocked two Philippines government vessels over the weekend in the Second Thomas shoal area near the Philippines, which has raised questions over whether the South China Sea will be another geopolitical flashpoint. We would say not in 2024, both given China
April 17, 2024 12:34 PM UTC
Global markets are being driven by a scale back in Fed easing expectations and we see a 5-10% U.S. equity market correction being underway. However, with the market now only discounting one 25bps Fed cut in 2024, any downside surprises on U.S. growth or better controlled monthly inflation numbers
April 15, 2024 12:35 PM UTC
India's inflation trajectory in March 2024 showcased divergent trends in both consumer and wholesale price indices. While consumer inflation dipped to its lowest in ten months at 4.9% y/y, wholesale inflation rose to 0.5% y/y, driven by surging food prices. The outlook suggests gradual WPI escalatio
April 11, 2024 7:38 PM UTC
Bottom Line: According to preliminary figures announced by the Russian Ministry of Economic Development, Russia's GDP grew by 7.7% YoY in February after expanding by 4.6% in January, owing to strong fiscal stimulus, high military spending, invigorating consumer demand and investments. We foresee R
April 10, 2024 8:21 PM UTC
Bottom Line: After hitting 7.4% YoY in January and December, the inflation rate remained stable at a one-year peak of 7.7% YoY in March after February. We think stubborn price pressures continue to be strong due to high military spending, currency weakening particularly after March 11, tight labour
April 10, 2024 2:57 PM UTC
The latest CPI data from Brazil reveals a modest increase of 0.16% (m/m) in March, slightly below market forecasts. Despite this, the year-on-year CPI has dropped to 3.9%, remaining within the BCB bands but above the central target. Notably, the Food and Beverages group saw the most significant rise
April 3, 2024 9:16 AM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on April 3 that Turkish CPI surged to 68.5% annually and 3.2% monthly in March, and annual inflation swung to a 16-month high due to increases in food and education prices, coupled with the lingering impacts of the minimum wage hike on the
April 2, 2024 9:00 AM UTC
Into Q2, data and policy (actual and perceived) will dominate DM markets. The ECB will likely take the spotlight with a 25bps cut on June 7, as the Fed face a better growth/more fiscal policy expansion and a tighter labor market than the EZ but also with a better productivity backdrop and outlook to
April 1, 2024 1:33 PM UTC
Indonesia's latest Consumer Price Index (CPI) data has revealed a notable acceleration in inflation, surpassing expectations and marking the highest rate since August 2023. The surge, driven primarily by heightened demand during the fasting month of Ramadan, highlights significant price pressures ac
March 25, 2024 2:00 PM UTC
· Unlike South Africa and Russia, Turkiye continued with tightening monetary policy in Q1 due to stubborn inflation, pressure on FX and reserves. Meanwhile, Russia and South Africa halted their tightening cycles as of 2024 and will likely start cutting interest rates in Q3 depending on how
March 22, 2024 7:04 PM UTC
· Brazil and Mexico growth will decelerate from the growth rates seen in 2023. The stronger basis of comparisons in 2023 and the tight monetary policy will diminish growth during 2024. Brazil robust agricultural growth will not repeat in 2024, while Mexico growth is restrained by a tigh
March 22, 2024 12:18 PM UTC
· In 2024, growth trends across emerging Asia will exhibit a mixed pattern. Encouragingly, there will be a resurgence in demand for global electronics following a period of stagnation in 2022‑23, which will provide a boost to regional trade. Moreover, the initiation of monetary policy
March 20, 2024 1:37 PM UTC
Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on March 20, the inflation jumped to 5.6% YoY in February due to higher housing & utilities, miscellaneous goods & services, food and non-alcoholic beverages and transport prices, couple
March 20, 2024 11:00 AM UTC
China’s 5% growth target will likely be tough to meet with residential property investment likely to knock 1.0-1.5% off GDP and net exports a small negative. With sluggish private investment, this means some of the old engines of growth are not firing. Some additional fiscal stimulus will likely
March 18, 2024 5:40 AM UTC
Bank Indonesia (BI) will likely maintain the key 7-day reverse repo rate unchanged in March at 6%, in line with recent trends. The stability of the rupiah remains a crucial consideration for BI, alongside CPI inflation, which has moderated within the new target band of 2.5+/-1%.
March 15, 2024 10:29 AM UTC
Bottom line: We foresee two possible outcomes of Russian presidential election on March 15-17, either a Putin win (99%) or a second round on April 7 (1%), despite the latter has a very small chance to occur. We think Putin will secure his fifth term in Kremlin despite there are alleged concerns that
March 13, 2024 9:33 PM UTC
Bottom Line: After remaining unchanged at 7.4% YoY in January and December, we saw an uptick in the inflation hitting 7.7% in February. We think stubborn price pressures continue to be strong due to high military spending, currency weakening, tight labour market, high salaries and benefits, and invi