May 17, 2021

China – No Further Acceleration = No Sharp Turns

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

China’s domestic activity indicators reinforced the “no sharp turns” narrative. Hungary surprised with a decidedly hawkish monetary policy comment.

May 14, 2021

U.S. Surprises – EM-Friendly?

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

U.S. growth – slowing or rebalancing? The outcome matters for EM. EM central banks’ guidance is getting more hawkish as economies re-open and the pace of vaccinations picks up.

May 13, 2021

Macro Surprises – Who Benefits?

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

The U.S. tapering narrative is attempting a comeback, but the real rates differentials between some EMs and the U.S. look much more attractive now.

May 12, 2021

Inflation Rollercoaster(s)

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

Most central banks believe inflation spikes will fade later this year. China continues to withdraw policy stimulus, as the recovery becomes more entrenched.

May 11, 2021

Higher Inflation, Steeper Yield Curves?

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

A low base effect pushes EM headline inflation higher. Central banks consider it transitory – can global cost-push pressures be a game-changer, causing local yield curves to re-steepen?

May 10, 2021

Surging Commodity Prices – Friend or Foe?

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

Surging commodity prices can create a strong tailwind for EM FX. Pay attention to country specifics as regards the impact of higher food prices on EM inflation.

May 07, 2021

EM Exports – Rebalancing on the Way?

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

China’s exports beat consensus, but its global exports share is set to decline as other EM benefit from the re-opening. Mexico’s inflation jumped higher, reinforcing expectations of a rate hike.

May 06, 2021

EM Rates – No Deviations From Status Quo

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

Brazil maintained the same pace of rate hikes (75bps) and guidance. Turkey remained on hold with a seemingly hawkish statement – but is it just lip service?

May 05, 2021

EM – Beware of Base Effect Illusion

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

A very low base effect can generate “oversized” data releases in EM in the next couple of months. India’s central bank surprised with additional measures to support growth.

May 04, 2021

EM Activity Gauges – Still Expanding

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

Activity gauges in most EM stayed in expansion zone in April. Brazil’s tax reform shows signs of life – we hope the rapporteur’s presentation will not extinguish them.