July 30, 2021

Playing the Waiting Game in China and Peru

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

As we wait for the next batch of China’s activity gauges, the Politburo expressed concern about the growth outlook and signals more fiscal support. Peru’s politics spooked the market—and some questions are still unresolved.

July 29, 2021

EM Policy Contagions - From Good to Controversial

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

A tame Fed provided a much-needed market respite, and EM with strong policy frameworks are set to benefit. As this happens, be mindful of EM policy “contagions” of another kind, which can be less forgiving.

July 28, 2021

Growth, Rebalancing and Persistence

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

The vaccination gap between EM and DM is the main reason why the IMF lowered its 2021 growth forecast for EM. The IMF also expressed concerns that inflation risks can prove more persistent.

July 27, 2021

China Contagion vs EM Policy Breakthroughs

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

China’s sell off continued this morning, but the newsflow in other EM was more encouraging. Which one will prevail?

July 26, 2021

China’s Policies - Moving Targets?

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

China is trying to balance more support for smaller privately owned companies that are still struggling with more regulation in “bubbly” sectors.

July 23, 2021

EM Rate Hawks – First In, First Out?

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

Russia delivered a hefty 100bps rate hike, but signaled that it might take a pause. Brazil cannot afford such luxury yet, as mid-month inflation accelerated to 8.59% year-on-year.

July 22, 2021

Hawkish Surprises Keep Coming

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

Mexico’s inflation keeps surprising to the upside, supporting the market expectation of more rate hikes in the next 3 months. Other EMs are still expected to normalize their policies, but not yet due to headwinds from low vaccination rates.

July 21, 2021

Peak Growth or Peak Concerns?

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

China’s financial stability concerns are back in headlines, but the near-term growth outlook remains unfazed.

July 20, 2021

Policy Response and Growth/Rates Dichotomy

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

Lower global rates contrast with optimistic growth forecasts. EMs are expected to continue hiking, which should help to bring the average EM real policy rate back to positive territory in early 2022.

July 19, 2021

EM – Local Policies vs. Global Concerns

by Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Strategy

EM central banks will be making rate-setting decisions amongst diverging inflation/growth outlooks and another global risk-off episode.