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Emerging Markets: What has Changed

Friday, November 18, 2016 14:18
% of readers think this story is Fact. Add your two cents. / by Marc Chandler / November 18, 2016

B4INREMOTE-aHR0cHM6Ly8yLmJwLmJsb2dzcG90LmNvbS8tUUZjZDdFMXA1cUUvV0M4Y0w2Z012NkkvQUFBQUFBQUFXVVkvX2JPVGZLTjhiVVV6RW5pdUtyTUxaT2FjY0hMZXFyTXFRQ0xjQi9zNDAwL2dsb2JlLmpwZw==(from my colleague Dr. Win Thin)

  • Malaysia appears to have enacted a subtle change in FX policy.
  • Turkey cut foreign currency reserve requirements in an effort to increase the supply of foreign exchange.
  • Brazil’s central bank suspended the sale of reverse currency swaps and started selling new regular swaps (equivalent to selling USD).
  • Colombia reached a new peace agreement with FARC rebels.
  • Mexico’s central bank hiked cash rates by 50 bp. 

In the EM equity space as measured by MSCI, Brazil (+4.9%), Mexico (+3.6%), and Russia (+2.9%) have outperformed this week, while Peru (-5.1%), Czech Republic (-3.3%), and India (-2.4%) have underperformed.  To put this in better context, MSCI EM fell -0.1% this week while MSCI DM rose 0.3%.
In the EM local currency bond space, the Philippines (10-year yield -50 bp), India (-30 bp), and Ukraine (-28 bp) have outperformed this week, while Malaysia (10-year yield +45 bp), Thailand (+31 bp), and Poland (+31 bp) have underperformed.  To put this in better context, the 10-year UST yield rose 13 bp this week to 2.28%.

In the EM FX space, EGP (+3.7% vs. USD), MXN (+2.6% vs. USD), and RUB (+1.9% vs. USD) have outperformed this week, while TRY (-3.7% vs. USD), COP (-3.2% vs. USD), and MYR (-1.7% vs. USD) have underperformed.


The post Emerging Markets: What has Changed appeared first on Silver For The People.


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