What Has Changed in EM

  • China reportedly plans to enact broad tariff cuts
  • China will be able to sell bills in Hong Kong
  • Bank Indonesia plans to offer IDR-settled NDFs domestically
  • A second North Korea-US summit may be in the works.
  • Hungary central bank is laying the groundwork for exiting unorthodox policies
  • South African Reserve Bank tilted more hawkish
  • South Africa will redirect ZAR50 bln of spending as part of a plan to boost growth and create jobs
  • The Turkish government announced a plan to help support the banking sector, but details were lacking
  • Argentina is trying to increase its IMF program to as much as $70 bln from $50 bln currently
  • Brazil COPOM tilted more hawkish whilst leaving rates steady at 6.5% Continue reading “What Has Changed in EM”

Dollar Gets Modest Traction Ahead of the Weekend

  • The Italian drama continues
  • Eurozone reported weaker than expected flash PMI readings for September
  • Reports suggest China will enact broad tariff cuts
  • Japan reported August nationwide CPI
  • Brazil mid-September IPCA inflation is expected to rise 4.36% y/y

Continue reading “Dollar Gets Modest Traction Ahead of the Weekend”

Sterling Pops, Dollar Fizzles

  • The dollar cannot get much traction despite developments that are typically supportive
  • UK reported strong August retail sales
  • Swiss National Bank kept policy steady, as expected
  • Norges Bank hiked rates 25 bp to 0.75%, as expected; future rate path was slightly more dovish
  • Brazil COPOM left rates steady at 6.5%, as expected; SARB is expected to keep rates steady at 6.5%

Continue reading “Sterling Pops, Dollar Fizzles”

Dollar Soft Even as US Rates Rise and Trade Tensions Mount

  • US rates continue to march higher
  • Meanwhile, trade tensions continue to ratchet up
  • UK reported higher than expected August CPI
  • Yen weakness continues in the wake of the BOJ decision overnight
  • Bank of Thailand kept rates steady at 1.5%, as expected; Brazil COPOM is expected to keep rates steady at 6.5%

Continue reading “Dollar Soft Even as US Rates Rise and Trade Tensions Mount”

Brazil Central Bank Preview

Brazil’s COPOM meets tomorrow and is expected to keep rates steady at 6.5%. The tightening cycle should begin in October, but much will depend on the real and how it trades around next month’s elections. Volatility is likely to remain high and tied to opinion poll results.

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Markets Calm Even as Trade Tensions Mount

  • The main drivers for global markets remain in play: trade tensions and higher US rates
  • The US moved ahead with its plan to slap 10% tariffs on another $200 bln of Chinese imports next Monday
  • Markets have to start thinking about the inflationary implications of these tariffs
  • The implied yield on the December 2019 Fed Funds contract has shot up this month
  • EM remains under pressure; National Bank of Hungary is expected to keep rates steady at 0.9%

Continue reading “Markets Calm Even as Trade Tensions Mount”

From the Securities Lending Trading Desk

In the US, we have seen increased demand for DocuSign, Inc., as the share price continues its downward trend. Japanese real estate brokerage and management service firm Tateru Inc. has become embroiled in a falsification of data scandal, sending its share price into a tailspin. Rights issuance and convertible bond activity have been key drivers for securities lending demand in Europe. Continue reading “From the Securities Lending Trading Desk”

Three takeaways for asset managers from the European Beneficial Owners’ Securities Finance & Collateral Management Conference

Overall the market has had a good year with equity lending revenues returning a healthy 17% YoY increase and fixed income 7%. Asia is the hot spot with revenues increasing by 40%, and the US and EMEA 2% and 23% respectively1

Revenues are concentrated, with a few key specials generating a high proportion of revenue in each market. Familiar names like Tesla, Celltrion and Sharp have featured again. 

Continue reading “Three takeaways for asset managers from the European Beneficial Owners’ Securities Finance & Collateral Management Conference”

Drivers for the Week Ahead

  • The trajectory of monetary policy in the US and Europe has been fairly clear
  • This week’s high-frequency UK data is expected to reinforce the notion that there will not be another increase in the base rate until after next March
  • The Bank of Japan has been more difficult to read for investors
  • Norway’s central bank meets Thursday and is likely to hike rates
  • After the hawkish surprises last week from Turkey and Russia, all eyes are on Brazil and South Africa this Wednesday and Thursday, respectively

Continue reading “Drivers for the Week Ahead”