Emerging EMEA
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March 25, 2024
EMEA Outlook: Elections Set the Scene in Q2
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
January 29, 2024
South Africa: Structural Issues to Dominate Long Term Growth
January 29, 2024 9:00 AM UTC
Bottom line: We expect 1.3-1.5% GDP growth in South Africa in the 2025-2030 period. We are concerned with the structural problems affecting economic dynamics negatively, including loadshedding, transportation bottlenecks, and shrinking trade surplus. Despite structural problems; growing population,
December 04, 2023
Moderate Increase in Turkiye’s Inflation in November
December 4, 2023 11:28 AM UTC
Bottom Line: As we predicted, Turkish CPI moderately surged to 62% annually and 3.3% monthly in November due to continued adverse impacts of deterioration in pricing behaviour, strong consumption, depreciating Turkish Lira (TRY) and high inflation expectations, while the acceleration pace of the CPI
November 30, 2023
Turkish Economy Expands 5.9% in Q3 2023
November 30, 2023 1:40 PM UTC
Bottom Line: Turkish Statistical Institute (TUIK) announced on November 30 that the economy expanded by a 5.9% YoY in Q3 2023, driven by the strong domestic demand and lending, public investments and massive construction projects after February 6 twin earthquakes. (Note: GDP expanded 0.3% in Q3 from
November 29, 2023
Russian Economy Grows by 5% in October
November 29, 2023 7:11 PM UTC
Bottom Line: The Russian economy grew by a strong 5% in October YoY, thanks to increased defense spending boosting industrial production, invigorated consumer activity triggered by domestic labor market, and growth of real money income of households. We foresee Russian GDP to grow by 1.7% in 2023 si
November 24, 2023
SARB Holds Key Rate at 8.25% at Third Straight MPC
November 24, 2023 10:11 AM UTC
Bottom Line: As expected, SARB kept rates unchanged at 8.25% at MPC on November 23, which was the last MPC meeting of the year. According to press statement released, SARB remained worried about inflation risks since the upward trend in CPI continued in October as it hit 5.9% due to higher fuel, hea
November 23, 2023
Sixth Straight Rate Hike: CBRT Continued Strong Monetary Tightening
November 23, 2023 12:53 PM UTC
Bottom Line: Despite we pencilled a 250 bps policy rate hike by Central Bank of Turkiye (CBRT) on November 23 MPC meeting, CBRT continued its monetary tightening cycle by lifting the key rate by 500 bps to 40%. This is the sixth straight rate hike by CBRT since May presidential elections, simply to
November 22, 2023
The Bells Are Tolling as the Spiking Cycle Continues: South Africa’s Inflation Jumped to 5.9% in October
November 22, 2023 3:48 PM UTC
Bottom Line: After increasing to 5.4% YoY in September, the upward trend in CPI continued in October as it hit 5.9% due to higher fuel, health, transport and food prices. Consumer prices increased on average by 0.9% between September and October, the highest monthly rise in three months. Department
November 20, 2023
Ukraine War: Western Support Weakens, Elections on the Horizon, Peace Negotiations Remains Unlikely
November 20, 2023 11:28 AM UTC
As Ukraine counter offensive operations continues without much success, the possibility of a stalemate and frozen conflict increase in the medium term taking into account Russia's continued failure to gain ground in late 2023. What will happen in 2024?
Bottom Line: We foresee a protracted conflict,
November 14, 2023
South Africa: Structural Issues to Dominate Long Term Growth
November 14, 2023 1:07 PM UTC
Bottom line: We expect 1.3-1.5% GDP growth in South Africa in the 2025-2030 period. We are concerned with the structural problems affecting economic dynamics negatively, including loadshedding, transportation bottlenecks, and shrinking trade surplus. Despite structural problems; growing population,
October 31, 2023
October 03, 2023
September 29, 2023
September 28, 2023
September 07, 2023
August 14, 2023
August 07, 2023
Navigating the Path to Peace: Saudi Talks on Ukraine-Russia Conflict
August 7, 2023 10:59 AM UTC
The ongoing conflict between Ukraine and Russia has been a global concern, with efforts continuously being made to find a peaceful resolution. In a recent development, Saudi Arabia hosted a summit in Jeddah last week that brought together top officials from around 40 countries, including key players
August 02, 2023
U.S. and EZ Government Bond Yields and Peaking Rates
August 2, 2023 7:52 AM UTC
Bottom Line: We feel that the Fed is getting close to peaking and the ECB has already peaked with the July rate hike. However, this is already priced into 2yr yields, with the current discount to policy rates, and we see 2yr U.S. Treasuries and Bunds to 4.8% and 3.05% by end 2023 respectively. Inver
July 27, 2023
EM Divergent Rate Hikes and Coming Cuts
July 27, 2023 7:54 AM UTC
Bottom Line: Major EM government bond spreads have narrowed versus the U.S. (Figure 1), as inflation in EM countries has moved closer to their target. Some further narrowing should be evident, but this will likely be modest as EM policy easing will likely be gradual in the remainder of 2023 and into
June 28, 2023
June 23, 2023
June 22, 2023
Outlook Overview: Headline Inflation Slowing, Core Inflation and Policy Rates in Focus
June 22, 2023 10:29 AM UTC
DM countries are seeing headline inflation rates come down helped by lower energy prices than 2022, but the downward progress on core inflation is slower. DM central banks are worried that multi-year inflation targets will not be hit, which is leaving some final tightening to be delivered; a tighten
May 25, 2023
Webinar: Uncertain 3 Months, But Bullish Equities 2024
May 25, 2023 3:46 PM UTC
Bottom Line: Provided that the U.S. avoids a temporary default and reaches a debt ceiling agreement, then the key focus for asset allocation over the next 1½ years will switch back to growth/inflation and central bank policy prospects. DM inflation will likely come down further, which will allow F
April 27, 2023
April 20, 2023
Beneficial AI, but AGI Worries
April 20, 2023 9:02 AM UTC
Bottom Line: Focused Artificial Intelligence (AI) can provide economic benefits in the coming years, as it is aligned to different stakeholders needs.Artificial General Intelligence (AGI), in contrast to the emerging regulatory push in the EU and China, is not yet regulated in the U.S. AGI could the
April 17, 2023
Debt: Big EM’s Versus Low Income EM countries
April 17, 2023 6:55 AM UTC
Bottom line: Big EM’s countries outside of China have not seen the scale of debt increase seen in China and some have managed to reduce total non-financial sector debt/GDP since 2007 (this measures includes government/households and corporates). If inflation can be brought down, then this will red
April 11, 2023
Too Much Debt Growth Since 2007: China, Japan and France
April 11, 2023 7:11 AM UTC
Bottom line: China, Japan and France have seen the largest increase in combined government/household and corporate debt/GDP (total non-financial sector debt) followed by Canada/Switzerland and Sweden. In China, Japan and France the surge in debt/GDP is unlikely to be repeated in the coming years, wh
April 04, 2023
March 28, 2023
March 17, 2023
China’s 25bps RRR cut
March 17, 2023 9:58 AM UTC
Bottom Line: The 25bps RRR cut from the PBOC is designed to support the economic recovery, alongside the expansion of fiscal policy in H1. The bounce in the Yuan and low CPI inflation could allow a cut in the 1 and 5 yr LPR rates, if the economy falters. However, a cut is unlikely at the March 20
March 10, 2023
China’s Local Government Debt: Problem or Crisis?
March 10, 2023 8:01 AM UTC
Bottom Line: From a wider macro standpoint, it does seem as though the authorities want to navigate the LGFV problems in a balanced manner by avoiding defaults but also seeking to reduce the problem. Even so, multi-year it remains a concern that China is dependent on loans and debt to sustain growth
March 06, 2023
China 5% growth target for 2023 and 2024/25?
March 6, 2023 10:50 AM UTC
Bottom Line: China’s 2023 growth target of around 5% is likely due to political reasons. An understanding that growth will likely slow in 2024 and especially 2025, which means that a 5% plus target would become an around 5% target in 2024 and 2025. Better to have an around 5% target for all three
March 01, 2023
China PMI Rebound and More State Intervention
March 1, 2023 8:11 AM UTC
Bottom Line: The February manufacturing and non-manufacturing PMI were better than expected, as China’s economy reopened from the lifting of the zero COVID policy. We maintain a forecast of 5.8% for 2023 GDP growth. Additionally, president Xi has signalled more political intervention in the econom
February 15, 2023
U.S./China Geopolitical Tensions, but Ukraine the Real Focus
February 15, 2023 1:59 PM UTC
Bottom Line: Neither President Biden or Xi are interested in significantly escalating tensions between the U.S./China, but some further posturing and U.S. sanctions could be seen in the coming weeks. On Taiwan, we still maintain the view that a China invasion remains low risk in the next five years,
February 14, 2023
China Tax Take Restrains Fiscal Policy
February 14, 2023 7:38 AM UTC
Bottom Line: China has used up fiscal policy space over the last few years with the zero COVID policy, though the strong influence of the authorities on public debt markets still means that scope exists. If a further major shock is seen then fiscal policy stimulation will be used, but otherwise mome
February 10, 2023
China Inflation under Control
February 10, 2023 1:39 PM UTC
Bottom Line: January China CPI rose to 2.1% Yr/Yr and remains consistent with easy PBOC policy. Reopening is unlikely to produce major inflation pressures, as excess savings are less than in DM economies when they reopened and global supply chain problems have eased. We see 2.1% CPI inflation for
February 08, 2023
China: Growth Forecast Revised Upwards
February 8, 2023 7:24 AM UTC
View change: We now forecast 5.8% GDP growth in 2023 versus our December outlook forecast of 4.7% helped by a quicker than expected exit from Zero COVID policies/quick adaption of China’s population and government policy being more supportive. We are also revising up 2024 to 5.5% versus 5.1%, both
January 24, 2023
January 19, 2023
China Equities Outperform India for 2023
January 19, 2023 7:35 AM UTC
Bottom Line: We now feel that China equities can outperform the U.S. (CSI 300 v S&P500) by 10-15% this year, rather than 5-10% we identified in the December outlook. The reopening is going quickly and with less major disruption than we thought, which can start to benefit real sector data in Q1 and p
January 17, 2023
China Q4 Better Than Expected, But
January 17, 2023 9:57 AM UTC
Bottom Line: December retail sales was much better than expected, which helped the Q4 GDP outcome. While scepticism exists over the outcome, exiting from the zero COVID strategy could have caused a boost in December. With fears over COVID looking to have already peaked, the more sustained pick-up in
January 12, 2023
U.S./China Strategic Competition
January 12, 2023 8:54 AM UTC
Bottom Line: Diplomatic language and events should improve between China and the U.S. through 2023, which would be topped by a potential visit of president Xi to the U.S. in November 2023.U.S./China relations will certainly feel more cooperative in 2023.This should not be interpreted as an end to U.
January 10, 2023
COVID Mutations, Bird Flu and Other Tail Risks
January 10, 2023 8:04 AM UTC
Bottom Line: A major mutation of COVID from the current Omicron wave in China is a tail risk, which is unlikely to impact market prices. Indeed, with the current wave having less severe consequences than feared it could bring forward the China consumer bounce to late Q1 rather than Q2/Q3. Meanwhile,