Emerging Markets Economics Update What happens after an EM currency crisis? Both Turkey and Argentina have now suffered currency crises this year. In previous EM currency crises, economies experienced a sharp slowdown in GDP growth, averaging 5-6%-pts, and a rise in inflation... 16th August 2018 · 1 min read
Commodities Update Dollar is still a key driver of commodity prices After breaking down in April and May, the relationship between the dollar and commodity prices seems to have re-established itself. Given our view that the dollar will remain strong into 2019... 16th August 2018 · 1 min read
Middle East & North Africa Economics Weekly Pressure on Egypt’s pound? Egyptian dollar bonds have performed particularly poorly this week, suggesting that the recent turmoil in EM financial markets exacerbated the slowdown in capital inflows to the country that was... 16th August 2018 · 1 min read
Nordic & Swiss Economics Update September rate hike by Norges Bank looks nailed on After leaving policy unchanged today, the Norges Bank looks almost certain to begin raising interest rates at its next meeting in September. But even as the central bank tightens monetary policy over... 16th August 2018 · 1 min read
DM Valuations Monitor Valuations don’t appear unsustainably high There is a widely-held view that the prices of many financial assets are bound to come crashing down sooner or later, because their valuations have risen far above the long-run averages to which they... 15th August 2018 · 1 min read
Emerging Europe Economics Focus Turkey: what next? The plunge in the Turkish lira is likely to push inflation above 20% and tip the economy into recession in the coming months. Our base case is that GDP growth will now average 3.0% over 2018 as a... 15th August 2018 · 15 mins read
Asia Economics Update Further tightening to come in Indonesia Today’s rate hike by Bank Indonesia (BI) comes against a backdrop of continued weak economic growth and subdued inflation, and demonstrates that BI’s main focus remains supporting the currency. With... 15th August 2018 · 1 min read
Africa Economics Update South African rand: Why always me? The rand’s status as a liquid, easily traded currency makes it particularly vulnerable to shifts in EM sentiment. But these seldom last, and the SARB will not – as some expect – respond by hiking... 14th August 2018 · 1 min read
Australia & New Zealand Economics Update The tide may turn in favour of the dollar next year Even though both the Australian and New Zealand dollars have weakened by more than 10% this year and have pretty much hit our end-year forecasts, the risks still lie on the downside. The tide may turn... 14th August 2018 · 1 min read
Canada Economics Update Loonie to depreciate even if NAFTA deal is reached A quick NAFTA deal is an upside risk to our forecast for the loonie to remain near its current rate against the US dollar this year. But our forecasts for various commodity prices to decline and... 13th August 2018 · 1 min read
Global Markets Update What the crisis in Turkey means for EM currencies Emerging market (EM) currencies have weakened against the dollar again today on worries about Turkey. While the pressure from this source might not last long, we think that the outlook is fairly poor... 13th August 2018 · 1 min read
Emerging Markets Economics Update EM central banks unlikely to respond to FX weakness EM currencies have come under pressure over the past few days as Turkey’s crisis has escalated, but history suggests that such sentiment-driven sell-offs tend to be short-lived. We wouldn’t expect the... 13th August 2018 · 1 min read
Emerging Europe Economics Update Where do the risks in Turkey’s banking sector lie? Turkish policymakers have taken steps to support local banks today, but concerns have continued to mount about the health of the sector. Banks appear to hedge all their on-balance sheet FX mismatches... 13th August 2018 · 1 min read
Africa Economics Update South Africa: Turkey parallels The falling rand has, yet again, highlighted the currency’s vulnerability to EM risk sentiment. From an economic perspective, however, the country’s situation is very different from Turkey’s building... 13th August 2018 · 1 min read
Asia Economics Update What does the crisis in Turkey mean for Asia? There is a good chance that the recent volatility in financial markets triggered by the crisis in Turkey will prompt Bank Indonesia into hiking interest rates at its meeting on Wednesday. For most... 13th August 2018 · 1 min read
Japan Chart Pack 0.1% is the new 0% The Bank of Japan’s decision to allow JGB yields to deviate by 0.2 percentage points rather than 0.1 percentage points from its 0% target suggests that long-term bond yields will settle at a slightly... 13th August 2018 · 1 min read
