RSS feedemerging markets
’World Bank joins the gloomfest
From the World Bank’s latest global economic outlook (emphasis ours):
While contained for the moment, the risk of a much broader freezing up of capital markets and a global crisis similar in magnitude to the Lehman crisis remains.
Is China secretly consuming more, or not?
The Barclays Capital note we discussed earlier this week, postulating that China had already begun to see a critical increase in its household consumption-to-GDP ratio, has generated a few questions over email.
Hungary — the good, the bad, and the conditionality
Hungary — still in basket-case mode earlier on Thursday… (a snapshot courtesy of Bloomberg):
The government sold 35 billion forint ($140 million) of one-year bills, 10 billion forint less than targeted,
Kazakh bank bail-ins, encore
ALMATY/LONDON, Jan 4 (Reuters) – BTA, Kazakhstan’s third-largest bank by assets, failed to make around $160 million in coupon payments due by Jan. 3, three sources told Reuters on Wednesday…
Yep, it’s Kazakh bank debt!
The interesting story here is with BTA’s recent restructuring saga…
Long EM, short G10: FX hedge edition
Tin hats at the ready. If the eurozone trouble deepens, emerging market equities could once again overshoot fair value in a wave of deleveraging.
So it’s time to put a value on them hedges…
Let’s look at FX plays for now.
Honey, I shrunk Emerging Europe
Eurozone banks selling assets in Emerging Europe – to tart up their capital ratios under crisis pressure – is not front-page news at the moment.
Frankly, we think it should be!
It’s a huge test case.
Kicking the Can(nes)
Under-promise then under-deliver. Then watch markets tank. That’s the prognosis for the G20 summit, courtesy of Capital Economics’ crystal ball.
After poo-pooing suggestions Bric nations will ride to the eurozone’s rescue or take constructive measures to resolve global imbalances,
And the G20 total returns winner is…
Something to take G20 Cannes delegates’ minds off Greece…
How’s this for evidence that the emerging markets growth story is overblown? Of all the G20 countries, the US would have given you the greatest equity returns over the past year,
Emerging market yields are still enslaved to the G3
Here, charted, is the master-servant relationship between emerging and developed markets.
The following shows the average local-currency yield spread — 10-year government bond yields less 3-month interbank rates — in the G3 compared to the average spread across 25 major EM economies,
Citi: EM rate cutters sheathed
If you were expecting widespread easing of policy rates across the emerging world, think again.
Since the end of August three EM central banks have cut rates — Brazil, Israel and Indonesia – but don’t go expecting much more monetary easing,
Eurozone running out of knights
Knights in shining armour that is.
The recently-floated plan for the big emerging markets to send money to Europe via an IMF-led SPV, which could be used alongside the EFSF to buy sovereign debt, is getting the lead balloon treatment.
Dad, where does growth come from?
So much for emerging markets propelling the world economy out of its current malaise.
Forget China’s healthy manufacturing data; the debt crisis in the Eurozone, deleveraging in the US and sluggish economic growth across the developed world will restrain EM economic activity for the rest of this year and into 2012.
Won’t somebody think of the emerging sovereigns?
We’ve been hearing a lot about major banks’ exposure to various European countries, via the banks’ holdings of sovereign and corporate bonds. Perhaps not in quite enough detail, but the subject is certainly getting attention.
Time to revisit/rethink EM equities?
Investors are making tentative steps back to emerging market equities.
Last week EM equity funds reported positive flows, on aggregate, for the first time in three months — fund flow data from EPFR Global showed a net inflow of $667m for the week to Wednesday October 19.
Fund management woe – redux
Another grim update from UK fund management sector. This one’s from Ashmore.
The emerging markets specialist, which recently joined the FTSE 100, has revealed a big fall in assets under management and a Paulsonesque performance from its recently acquired equities business.
The central bank Treasuries dump is not about Twist
“Are foreign central banks rejecting Operation Twist?”
That’s the provocative question asked in a note by RBS strategists this morning — and while the answer is “no”, the rationale for it is both intriguing and touches on some interesting developments happening around the globe.
Albert Edwards and the killer wave
Not sure what to make of this.
Über bear Albert Edwards has abandoned his empirical approach for (shock horror) the mystical world of technical analysis.
Behold the killer wave.
For those of you not familiar with the Coppock indicator here’s a quick primer,
Ashmore: Hey Brics, keep away, or at least get yours
Freshly arrived in our inbox and for those curious to know what an unabashed EM partisan thinks of the speculation that the Brics might buy EU sovereign debt….
A blood-sniffing take from the ubiquitous (in the pages of the FT,
The BBB recovery
An early morning helping of doom and gloom, courtesy of Morgan Stanley, which has cut its global growth forecast for 2011-12 by a full percentage point.
The bank – one of the more bearish houses on the Street – reckons the US and Europe are dangerously close to recession because of fiscal tightening and policy blunders,
Do not underestimate rising EM inflation risk
The official Chinese PMI for July came in at 50.7 — another month-on-month decline — although it was not as high as expected. In fact, it suggests we could be seeing signs of a soft landing in China.
[Paul Donovan] Why prejudice is really, really bad for growth
Economists have long observed the inverse correlation between prejudice and economic competitiveness and economic development. Advanced economies tend to have less racism, religious intolerance, homophobia,
Latin America safe from Europe’s debt crisis, Nomura says
It’s a shame the internet doesn’t do smell-o-vision, as there’s a rich, warm waft of historical irony hanging over this post.
It’s about Latin America being secure from Europe’s debt troubles, especially in terms of its exposure to Spanish banks should they go under.
European money market funds are hemorrhaging
Here’s an interesting chart from Société Générale compiled using data from EPFR Global.
It shows recent flows in and out of European money-market funds.
As can be seen, they’re seemingly hemorrhaging once again:
Does prejudice hinder economic growth?
For UBS economist Paul Donovan it’s not even a question, really
In a 16-page piece of research out this Thursday, he argues that “the issue of prejudice in society is not an abstract concept that investors can afford to ignore.”
The BIS still doesn’t like low interest rates
Those low interest rate u-Zirpers at the BIS are back.
The Bank for International Settlements, often known as the central banker’s bank, seems to share little in common with its low interest rate-advocating cousins in places like the UK and the US.
Luanda, via Lisbon
Big call from Citi’s Kato Mukuru and Alex Atienza.
In a 132-page note out on Wednesday, they recommend investors buy Portuguese banks — in order to gain exposure to Africa, and specifically Angola.
UBS on the commods crash – and getting ready for the next one
We’ve heard from Deutsche Bank, who blamed the coming end of QE for last week’s precipitous price moves.
UBS have now added their view to the causes of the commodities crash. In a nutshell, they’re citing:
Emerging loan demand
If you’ve ever wondered what a survey of senior lending officers in 45 emerging markets might look like (as opposed to, say, all those stagnant developed loan market surveys) here’s your chance.
The Institute of International Finance (IIF) has just released first-quarter data from its (enlarged) emerging markets lending conditions survey,
Greek bank risk – another New Europe tour
Greece debt restructuring chatter => Greece CDS blows out => peripheral sovereigns blow out with it. Usual stuff.
What’s wrong with this picture?
We think there’s something missing. Actually a whole group of sovereigns has been more or less absent lately…
EMs to IMF on capital controls: nice try
So much for learning to play nice.
According the Wall Street Journal on Monday morning, the tentative consensus on capital controls found last week has already unraveled (or was never there to begin with):