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Falling virus cases, strong economic recoveries and/or inflation worries prompted several more EM central banks – those of Czechia , Chile , Hungary and Mexico – to tighten monetary policy in the past month, joining Russia and Brazil. And a few others, …
15th July 2021
We think investors may be overestimating how much monetary policy tightening is on the way in emerging markets (EMs), but still expect long-dated EM government bond yields to rise a bit from here. Over the past month the tightening cycle among EM central …
29th June 2021
Inflation has risen sharply across the emerging world in the last few months, prompting much more cautious words from central banks (mainly in Latin America and Emerging Europe), but we expect that EM price pressures will ease in the coming months. (See …
18th June 2021
We forecast that emerging market (EM) equities will make further gains between now and end-2022 as the global economy recovers further. However, they have lost a bit of ground to developed market (DM) equities recently and we doubt they will perform much …
27th May 2021
The severe waves of COVID-19 that afflicted Emerging Europe and Latin America earlier in the year are now subsiding and the near-term economic outlook there has brightened. But several Asian economies have become the focus of concern instead. India …
19th May 2021
New COVID-19 cases have surged in the emerging world, with India, Emerging Europe and Latin America particularly hard hit. Social distancing measures have been tightened in many countries, which will weigh on activity. The early evidence suggests that the …
21st April 2021
We have become more pessimistic about the outlook for emerging market (EM) assets and currencies as we now expect the 10-year US Treasury yield to rise further over the next two years . EM assets and currencies have come under pressure recently. (See …
1st April 2021
EM financial markets have been hit this month by the rise in US Treasury yields, which has re-ignited some concerns about a re-run of the Taper Tantrum. So far, capital outflows from EMs have been relatively small. And financial conditions across the …
16th March 2021
We still expect emerging market (EM) “risky” assets and currencies to make further gains this year, despite growing concerns about another “taper tantrum”. EM assets and currencies have made significant gains since their troughs last year. And we think …
23rd February 2021
While the mood in EM financial markets has soured a little of late, from an economic standpoint, the past month has brought several positive developments. First, Q4 GDP data released so far have generally been better than expected. Recoveries have been …
The roll-out of COVID-19 vaccines is getting underway across EMs, but in many cases progress has been slow-going . In the meantime, many countries are suffering from worsening outbreaks. New cases are high and/or rising across Latin America (see Chart 1), …
22nd January 2021
Positive vaccine news has not changed our view that monetary policy in many emerging markets (EMs) will generally remain loose for some time yet. That is a key reason why we still expect EM local currency government bonds yields to stay low by historical …
18th December 2020
The race to secure and approve COVID-19 vaccines is in full swing and, while roll-out will generally be slower in EMs than in DMs, immunisation of vulnerable populations over the next year or so is a realistic goal, which should allow lockdowns to be …
10th December 2020
Equities and bonds in emerging markets (EMs) rallied sharply on the vaccine news earlier this month, particularly outside of Asia. We think they will continue to fare well as the global economy recovers. The reaction of EM assets to the vaccine news …
27th November 2020
This month’s positive vaccine news has dramatically improved the near term global economic outlook, but it doesn’t fundamentally alter our dovish view on EM monetary policy. Many EMs have only small (or non-existent) purchase agreements and face …
20th November 2020
Recoveries in much of the emerging world were slowing even before the renewed surge in COVID-19 cases across many parts of the globe. The economies of Central & Eastern Europe will be hit hard in Q4 by their alarming outbreaks and the sizeable tightening …
29th October 2020
Despite the sell-off in most emerging market currencies over the past week, we continue to think that most will strengthen against the US dollar as the global economy recovers. In particular, we have recently revised up our forecasts for the Chinese …
24th September 2020
After an initial burst of growth following the lifting of national lockdowns, the latest activity data and mobility indicators point to a slower pace of recovery in most EMs in recent months. (See Chart 1.) This looks set to continue in the next few …
We think that the recent outperformance in local-currency terms of the MSCI EM Index relative to the MSCI World Index of developed market (DM) equities will continue as the global economy recovers further. (See Chart 1.) Back in April , when stock markets …
25th August 2020
A handful of countries in East Asia and Eastern Europe (notably Korea and Poland) are suffering from rising coronavirus cases again, but the hit to activity there resulting from precautionary consumer behaviour and renewed restrictions is likely to be …
Much of Latin America, South Africa, and parts of Asia – notably India and the Philippines – are still struggling to contain their first waves of coronavirus. And while policymakers in these countries have generally eased lockdowns over the past few …
31st July 2020
While the incoming economic data continue to point to a nascent recovery in aggregate EM activity, some countries are being left behind. Recent figures from parts of Asia (China, Korea, Vietnam and Taiwan) and Emerging Europe (notably Poland), where …
19th June 2020
While much of the rebound in EM currencies is now probably behind us, we think that many of them will rise a bit further against the US dollar as risky assets generally continue to recover. (See Chart 1.) We have revised up our forecasts for many emerging …
17th June 2020
Timely data suggest that April may have been the trough for EM GDP (see Chart 1), and activity at an aggregate level should recover – albeit slowly – in the coming months. But this is likely to mask a big divergence between regions. Large parts of …
29th May 2020
While EM assets, especially in Latin America and EMEA, have been among the worst hit by the fallout from the coronavirus pandemic, we think that they will regain some of the ground lost over the past few months. But even then, we expect that most will end …
13th May 2020
The real-time economic and market disruption from the coronavirus means that much of the data released during the past month offers little insight into current developments in the emerging world. Accordingly, this publication will now focus on the most …
29th April 2020
The real-time economic and market disruption from the coronavirus means that much of the data released during the past month offers little insight into current developments in the emerging world. Accordingly, this Chart Book focuses on the most timely and …
27th March 2020
The coronavirus is severely impacting China’s economy and the incoming data suggest that this is spilling over to other economies, particularly in Emerging Asia. Tourist arrivals to Thailand are down by 50% y/y, while trade data for Korea collapsed in the …
20th February 2020
Even if the coronavirus outbreak in China is brought under control and the recent moves in equity and bond markets unwind, we think that most EM assets will not make significant gains this year. This reflects our long-held pessimistic view of China’s …
11th February 2020
There is no longer any doubt that China’s newly-identified coronavirus will hit its GDP growth in Q1 . And other parts of Asia (notably Hong Kong and Thailand) will suffer a drop in Chinese tourism receipts (see Chart 1), which could shave 1.5-2.0%-pts …
27th January 2020
Economic growth across the emerging world has slumped this year but, with the important exception of China, recoveries should take hold in 2020. Recent interest rate cuts will keep financial conditions accommodative. And governments will continue to …
17th December 2019
Optimism about an imminent resolution to the trade war between the US and China and subsiding protests in Latin America have supported EM currencies over the past month. But, barring a few exceptions, we think that they will weaken against the US dollar …
11th December 2019
Ongoing protests in Chile, Hong Kong and Lebanon will weigh on their economies and financial markets, but to different degrees. While the tightening of financial conditions and strikes in Chile will hit activity in Q4, the strength of the government’s …
15th November 2019
EM equities have continued to rise over the past month, seemingly driven by optimism about an imminent US/China trade deal and some improvement in the economic data. But we are sceptical that the rally will last, and forecast that EM equities will tread …
13th November 2019
The continued decline in core inflation across many emerging markets supports our view that most central banks’ easing cycles have further to run. Our measure of EM core inflation fell to 2.8% y/y last month (see Chart 1), the weakest rate since our …
18th October 2019
For all the talk of a global slowdown, the incoming data from the emerging world have been encouraging. Having bottomed out in Q2, GDP growth held steady at around 3.5% y/y at the start of Q3. EM manufacturing growth picked up, while exports stabilised. …
20th September 2019
The last few weeks have been kinder to EM financial markets than the start of August, when equities and currencies slumped as the US-China trade war ramped up again. Even so, neither has performed particularly well, and we think that the stage is set for …
5th September 2019
Argentina political developments sparked sharp falls in EM currencies over the past month, but this wasn’t enough to deter policymakers from continuing their easing cycle. Central bankers in Turkey, India, Brazil, Russia, Mexico, Thailand, and the …
21st August 2019
Early signs suggest that aggregate EM growth strengthened in Q2. (See Chart 1.) Our GDP trackers point to a recoveries across most of the emerging world. The rebound seems to have strongest in Emerging Europe where Turkey’s recession probably eased in …
19th July 2019
Emerging market (EM) equities have continued to recover from their sharp falls in May, but we do not think that they are out of the woods this year. Expectations for EM corporate earnings seem to be based on assumptions about the outlook for the global …
17th July 2019