EM Country Research

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June 12, 2024

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China CPI: Core Slows and 10bps June 17 MLF Cut?
Paying Article

June 12, 2024 7:34 AM UTC

 China disinflation is clear in the latest numbers for May, with core falling 0.2% on the month.  Further stimulus will likely arrive in the form of monetary easing.  While it is a close call, we look for a 10bps cut in the medium-term lending facility rate (MLF) from 2.50% on June 17.    

June 11, 2024

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Brazil CPI Review: 0.5% Rise in May and Worsening Conditions
Paying Article

June 11, 2024 1:55 PM UTC

Brazil’s CPI grew by 0.46% in May, exceeding expectations. Year-over-year CPI rose to 3.9%, driven by significant increases in food and beverage prices. Services inflation also increased. Strong labor market demand and supply disruptions from floods are pushing prices up. With the BRL devaluation

June 07, 2024

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Asia and EM/Europe and CIS: Select Country Risk Ratings
Paying Article

June 7, 2024 9:00 AM UTC

We provide country risk reviews for Asia and EM Europe/CIS countries. 

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China Excess Production: Exports Going Cheap?
Paying Article

June 7, 2024 8:45 AM UTC

China excess of production over domestic demand is causing disinflation pressures in China, but also leading to a fall in export prices as China companies seek buyers for production.  Though this is a helpful factor to the global inflation debate, it is causing trade tensions with the U.S. and EU o

June 06, 2024

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Country Risk in MENA
Paying Article

June 6, 2024 9:00 AM UTC

Country risk in Middle East and North Africa is impacted by the ongoing war in Gaza, alongside reviews of Saudi Arabia and Iran.     

June 04, 2024

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India Elections: Early Trends Point to a Weakened BJP Government
Paying Article

June 4, 2024 2:02 PM UTC

Election counting trends indicate that the BJP-led NDA is on track to secure 290 seats, with the BJP projected to win 235-240 seats. The INDIA alliance is expected to secure around 230 seats. Final results will be announced later tonight. A weakened BJP is expected to form a government with its alli

June 03, 2024

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Modi's Marathon: Exit Polls Predict Third Term with Sweeping Majority
Paying Article

June 3, 2024 12:59 PM UTC

Exit polls for the 2024 general elections indicate another Modi wave. The markets have welcomed the exit poll results and the overall business sentiment is euphoric. Exit polls forecast a landslide victory for the BJP-led NDA, with projections nearing the '400' mark. The BJP has also secured a signi

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Turkiye’s Inflation Hits 75.5% in May
Paying Article

June 3, 2024 11:49 AM UTC

Bottom Line: Turkish Statistical Institute (TUIK) announced on June 3 that Turkish CPI ticked up 75.5% annually and 3.4% monthly in May due to increases in education, housing, restaurant & hotel prices. We foresee favourable base effects, tightened monetary and fiscal policies, additional macro prud

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China Finance Weakest Links: Small Banks and Property Finance
Paying Article

June 3, 2024 9:19 AM UTC

China authorities appear to have the financial stability spill over from the property sector until control currently, through a combination of direct support for housing and forced mergers of weak banks (mainly rural so far).  This game plan will likely be followed for the next few years. However,

May 31, 2024

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South Africa Elections: A Coalition Government is on the Horizon
Paying Article

May 31, 2024 3:03 PM UTC

Bottom line: As we forecasted in our previous pieces, it seems a coalition government with an ANC-lead will be formed following the presidential elections on May 29, according to the preliminary results. It is very likely that ANC will be losing its majority dipping below 50% as it is currently the

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Turkish Economy Grew by a Strong 5.7% in Q1
Paying Article

May 31, 2024 12:18 PM UTC

Bottom Line: Turkish Statistical Institute (TUIK) announced on May 31 that Turkish economy expanded by 5.7% in Q1 driven by the buoyant demand, invigorated private consumption and government spending. Despite strong Q1 figure, we expect the pace of the GDP growth to decelerate in the rest of 2024 du

May 27, 2024

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Fed Easing Expectations: Volatile and Data Driven
Paying Article

May 27, 2024 12:05 PM UTC

 Bottom Line: Fed easing expectations have been reset to higher for longer.  However, softer real sector data, plus less worrying inflation monthly outcomes, can rebuild easing expectations.  We see the first 25bps coming at the September 19 FOMC meeting and around this time a noticeable increase

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Votes to Volatility: Potential Market Outcomes and Policy Directions Post Elections
Paying Article

May 27, 2024 6:47 AM UTC

As India’s month long 2024 General Elections are almost coming to a close, lower voter turnout has increased uncertainty despite expectations of a BJP victory. While we still expect a BJP victory, the markets are becoming increasingly cautious. A decisive BJP win would likely strengthen the rupee

May 23, 2024

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Support to ANC is on the Rise
Paying Article

May 23, 2024 6:24 AM 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 (40% probability) or a coalition government (60% probability). According to recent polls, ANC continues to be at the risk of losing its majority

May 22, 2024

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South Africa’s Inflation Softened to 5.2% in April, the Lowest Reading in Four Months
Paying Article

May 22, 2024 10:54 AM UTC

Bottom Line: According to the inflation figures announced by Department of Statistics of South Africa (Stats SA) on May 22, the inflation eased to 5.2% YoY in April down from 5.3% in March due to less severe power cuts (load shedding), a firmer South African rand (ZAR) coupled with lower food and no

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Bank Indonesia Holds Firm on Rates: A Steady Hand for Currency Stability
Paying Article

May 22, 2024 9:29 AM UTC

Bank Indonesia in a pro-stability move decided to maintain the key policy rate at 6.25% today. The move comes at a time when the wakness in the Indonesia Rupiah has abated and headline inflation has edged down. Despite improving stability, a rate cut is not in sight in the near term. 

May 17, 2024

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China: Lopsided Growth and New Housing Measures
Paying Article

May 17, 2024 6:54 AM UTC

Overall, the April industrial production suggests Q2 GDP should be reasonable, but weak retail sales suggests H2 2024 can be disappointing. We stick with a 4.6% forecast for 2024 GDP growth.    

May 16, 2024

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France and Japan: Debt Fuelled Growth Problem
Paying Article

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

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China: Too Much Debt In Some Sectors
Paying Article

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

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China RRR and Rate Cuts
Paying Article

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

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Watts at Stake: India's Looming Power Shortage
Paying Article

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

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Asset Allocation 2024: Tricky Seven Months Remaining
Paying Article

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

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Banxico Review: Hold Rates
Paying Article

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 09, 2024

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CBRT Lifts End-Year Inflation Forecast to 38%
Paying Article

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 08, 2024

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China Equities: A Tactical Play
Paying Article

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

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Ukraine War Update: Major Russian Offensive is Expected This Summer Despite U.S. Military Aid
Paying Article

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 03, 2024

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Russian Economy Expands by 4.2% YoY in March, and 5.4% in Q1
Paying Article

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

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Turkiye’s Inflation Continues to Jump in April with 69.8%
Paying Article

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 02, 2024

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China Politburo: Help for Housing, But No Game changers
Paying Article

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 01, 2024

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South Africa’s Fiscal Outlook Under Spotlights as the Elections Are Approaching
Paying Article

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

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China: Depreciation Rather Than Devaluation
Paying Article

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

Indonesia: MPC Review: Bank Indonesia Surprises With A Rate Hike
Paying Article

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

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Headwinds To Long-term Global Growth
Paying Article

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

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China: Surging Government Debt and Does It Matter?
Paying Article

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

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Sticky Inflation Causes Concerns over the Horizon
Paying Article

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

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Indonesia: MPC Preview: Bank Indonesia to Hold Rate Despite Currency Volatility
Paying Article

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

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Country Risk in MENA
Paying Article

April 23, 2024 9:00 AM UTC

Country risk in Middle East and North Africa is impacted by the ongoing war in Gaza.     

April 22, 2024

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Indonesian Court Delivers Verdict: Prabowo prevails
Paying Article

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

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EM Europe/CIS: Country Risk Ratings
Paying Article

April 22, 2024 9:00 AM UTC

We provide country risk reviews for EM Europe/CIS countries including Russia and Ukraine. 

April 19, 2024

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Recent Polls in South Africa: ANC’s Popularity Continues to Decline
Paying Article

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

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Services Surplus and Decreasing Trade Deficit Partly Heal Turkish Current Account Deficit
Paying Article

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

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China and the South China Sea
Paying Article

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

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Asia Country Risk Ratings
Paying Article

April 17, 2024 3:00 PM UTC

We provide country risk reviews for Asia countries including China, India, Indonesia, Malaysia, Philippines, Thailand and Taiwan.  

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Markets: Fed Rather Than Middle East Worries
Paying Article

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

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India Inflation: Risks Tilted to the Upside
Paying Article

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

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Russian Economy Expands by a Strong 7.7% YoY in February
Paying Article

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

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Russia’s Inflation Remained Steady at 7.7% in March
Paying Article

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

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Brazil CPI Review: Inflation Decelerates in March
Paying Article

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