Filtered by Region: Emerging Markets Use setting Emerging Markets
China Chart Pack (Nov. 24) …
29th November 2024
The ruble’s rollercoaster ride Donald Trump’s election victory has made some form of an end to the war in Ukraine more likely. (For more, see here .) His appointment this week of Keith Kellogg as his Russia-Ukraine envoy also points in this direction. Mr. …
Rebalancing underway The 0.2% q/q contraction in the Turkish economy in Q3 suggests that policymakers’ efforts to weaken demand and tame high inflation are taking effect. We still think that it would be premature for the central bank to start an easing …
Trump links some tariffs to the drug trade Earlier this week, President Trump threatened to impose an “additional” 10% tariff on imports from China, along with tariffs on Mexico and Canada. We gave our initial thoughts here , noting that because the …
The weak run of activity data out of Emerging Europe continued over the past month and, while the region is more insulated from Trump’s tariff threats than some other EMs, the risks to our already below-consensus growth forecasts have shifted further to …
28th November 2024
We’re launching an updated version of our China Activity Proxy this month, alongside an interactive dashboard that gives clients access to the data. Our expanded model suggests that China’s growth so far this year has been weaker than we originally …
27th November 2024
EM GDP growth ticked up in Q3 but is likely to fall short of expectations over the coming quarters as stimulus in China disappoints and still-tight monetary policy takes it toll. For most EMs, a universal 10% tariff on US imports – our working assumption …
Africa Chart Pack (Nov. 2024) …
Latin American (LatAm) markets have been generally resilient in the aftermath of the US election, possibly because investors were already pessimistic about the region’s prospects. But we think domestic and global headwinds will translate into LatAm assets …
26th November 2024
25bp hike probably the last of this cycle The Central Bank of Nigeria opted for a smaller-than-expected hike in its policy rate of 25bp to 27.50%, at its meeting today and, with Governor Cardoso sounding optimistic that the effects of petrol price hikes …
Amid the Trump Trade, capital outflows from EM financial markets have persisted over recent weeks. Looking ahead, we expect the US dollar to strengthen further, suggesting that outflows will continue. This will not be a problem for most EMs, but those …
Economy bounces back at the start of Q4 The stronger-than-expected Polish activity data for October suggest that the contraction in the economy in Q3 wasn’t the start of a renewed trend. With fiscal policy set to remain loose over the coming year and …
BoI on hold as upside inflation risks remain The Bank of Israel (BoI) left its policy rate on hold again today, at 4.50%, and the accompanying communications suggest that the risk of a return to interest rate hikes has receded over the past month. Even …
25th November 2024
Growth picks up, but outlook remains challenging Nigeria recorded a surprise pick-up in GDP growth to 3.5% y/y in Q3 as stronger growth in the non-oil economy more than offset a slowdown in the oil sector. We expect growth to remain soft until the …
Shock victory for far-right candidate raises risks for Romania The surprise lead for an independent far-right candidate, Călin Georgescu, in the first round of Romania’s presidential election raises the risk of an abrupt shift towards more populist …
SARB: lower CPI target poses upside risk to rates The SARB seemed optimistic when cutting its repo rate by 25bp to 7.75%, this week and, while we expect further easing, the growing likelihood that the inflation target will be lowered in the coming months …
22nd November 2024
Russia’s war in Ukraine escalates Tensions between Russia and Ukraine escalated this week, with the US shifting its strategy to give Ukraine the go-ahead to use Western-provided long-range weapons on Russian territory and Russia launching an …
Romania will elect a new government over the coming weeks at a time when the economy is performing poorly, inflation is running above target, and macroeconomic stability depends on policymakers pushing through much-needed fiscal consolidation. The most …
21st November 2024
The South African Reserve Bank’s decision to lower its repo rate by 25bp to 7.75% was not a surprise and Governor Kganyago sounded more optimistic that inflation is under control. Lingering concerns about the vulnerability of the rand and the growing …
Interest rate cuts still a few months away (at least) The communications accompanying the decision by the Turkish central bank (CBRT) to leave its policy rate unchanged again today, at 50.00%, suggest that analysts’ expectations for an easing cycle to …
US President-elect Trump’s protectionist rhetoric may mean that African sovereigns are contemplating the loss of preferential trade access to the US via the AGOA scheme. We think the overall impact from such a move would be limited, but specific sectors …
Friendshoring into India has for the most part been limited to high-end manufactured goods, but broader supply chain reconfiguration into the country could take place if the Trump administration imposes a 60% tariff on China. Trump has also been critical …
We held a series of client meetings in the US last week which focused on the implications of Trump’s victory in the US election and the spillovers to EMs. This Update answers some of the most frequent and important questions that came up. What impact will …
20th November 2024
South Africa’s activity data for September points to a subdued end to Q3, but we think this softer patch will be short-lived as low inflation and the SARB’s easing cycle provide some support to demand. That said, tight fiscal policy will prevent the …
Sharp drop in inflation sets the stage for 25bp cut tomorrow The drop in South Africa’s headline inflation, to 2.8% y/y, in October, will make it harder for the SARB to strike a hawkish tone regarding inflation pressures at its monetary policy committee …
Recession not enough for MNB to resume easing The Hungarian central bank (MNB) left its base rate on hold again today, at 6.50%, despite the economy having just fallen back into recession. We think that the easing cycle will remain on pause over the next …
19th November 2024
Rand hit by Trump trade, falling commodity prices The recent weakness of the South African rand is a symptom of the “Trump trade”, but sharp falls in some of South Africa key commodity exports also appear to have played a role. We expect the currency to …
15th November 2024
US President-elect Donald Trump’s cabinet nominations announced over the past week give us a guide to how his policies will affect Latin America. The fact many of his choices, including Kristi Noem (Homeland Security secretary) and Thomas Homan (“border …
Yet another week of disappointing activity data … The Q3 GDP data released out of Central and Eastern Europe (CEE) this week has only added to concerns about the health of the region’s economies. Poland’s economy contracted by 0.2% q/q , while GDP …
Inflation jump to prompt 100bp hike from CBN this month Nigeria’s headline inflation picked up for a second consecutive month, to 33.9% y/y in October, largely due to the impact of rising petrol prices. The CBN now appears to have little choice but …
Banxico cuts, scope for further easing rests on the peso Mexico’s central bank delivered another 25bp interest rate cut at today’s meeting, to 10.25%, and it left the door open to further easing over the coming months, although a lot will depend on moves …
14th November 2024
Donald Trump’s re-election has changed perceptions of how the war in Ukraine will develop, with many hoping for a quicker end to the conflict. This Update looks at how the war might evolve and the economic implications for Russia and Ukraine, for Europe …
Poland’s economy stumbles in Q3 The 0.2% q/q contraction in Polish GDP in Q3 partly reflects the impact of flooding in September, the impact of which will reverse this quarter. Even so, we have become a bit more concerned about underlying weakness in the …
Growth slowing, but inflation pressures still strong The slowdown in Russian GDP growth in Q3, to 3.1% y/y, is likely to be followed by a further loss of momentum in growth over the coming quarters. But, alongside CPI data which show that inflationary …
13th November 2024
South Africa’s mining sector has been a struggling part of the economy for some time and, while easing logistical and electricity constraints will provide some relief, weaker commodity prices in the coming years will hold back any recovery. The sector …
12th November 2024
Inflation jump scuppers December rate cut hopes Another bigger-than-expected jump in headline consumer price inflation last month will be enough to convince a majority of MPC members that conditions are not yet right to begin easing policy. We now think …
Stimulus too small to turn around credit growth Both bank lending and broad credit growth hit fresh lows in October in a sign that monetary easing hasn’t done enough to drive a substantial turnaround in private credit demand. And after last week’s …
This page has been updated with additional analysis since first publication. Deflationary pressures ease slightly but still pose a risk Headline CPI and PPI inflation both fell further in October. But core inflation edged up and factory gate prices fell …
11th November 2024
Donald Trump’s victory in the US election has, so far, been met with a muted response in African financial markets. The South African rand, for example, has held broadly steady while regional dollar bond yields have recorded modest moves. That said, a …
8th November 2024
End to the war in Ukraine in sight? One of the most important channels through which Donald Trump’s victory in the US election could affect Emerging Europe – and the global geopolitical landscape – is if he seeks to end the war in Ukraine, as he pledged …
Easing cycle on pause, waiting for more clarity on fiscal policy The National Bank of Romania (NBR) left its policy rate on hold again today, at 6.50%, against a backdrop of stubborn above-target inflation and concerns about the loose fiscal stance ahead …
Inflation rises, more rate hikes on the cards The further rise in Brazil’s headline inflation rate to 4.8% y/y in October means that the central bank is almost certain to deliver additional interest rate hikes at its upcoming meetings. The risks are …
Mexico is one of the most vulnerable economies to the policies that US President-elect Trump flagged on the campaign trail. This Update looks at the channels through which it could be affected. One key point in all of this is that policymakers don’t have …
7th November 2024
Easing cycle to continue, but risk of slower pace of cuts The Czech National Bank (CNB) cut its policy rate by 25bp again today, to 4.00%, and we still think that the conditions will be in place for the policy rate to be lowered to its estimated neutral …
COP29 – which is set to kick off in Baku next week – has been dubbed the ‘finance COP’ given that the top priority for negotiators will be to agree on a new climate finance pledge. However, Trump’s election victory looms large over the event and adds to …
Large US tariffs would hurt China’s export sector but less than many suppose. We estimate that the direct impact of even a 60% US tariff on goods from China would be well under 1% of China’s GDP . The bigger challenge for policymakers could be the …
Copom hikes again Brazil’s central bank hiked the Selic rate for a second consecutive meeting, by 50bp to 11.25%, today but this has more to do with the domestic macro backdrop and shoring up monetary policy credibility than a response to the market …
6th November 2024
Donald Trump’s second presidency is likely to result in lower US GDP growth, faster US inflation and a slightly higher path for the fed funds rate. The implications for the rest of the world are highly uncertain, not least because it is unclear how many …
NBP leaves rates on hold, risks to our rate forecast shift up slightly The decision by the National Bank of Poland (NBP) to leave its policy rate on hold again today, at 5.75%, was never in doubt, and we think that interest rate cuts are unlikely to …
