EM Preview for the Week Ahead

EM FX ended the week soft as the dollar continued to claw back recent losses on the back of higher US rates. US jobs data this Friday will be very important to keep the trend of rising US rates going. Meanwhile, low inflation in EM should allow central banks to start contemplating rate cuts, though none are expected to cut anytime soon. Continue reading “EM Preview for the Week Ahead”

From the Securities Lending Trading Desk – Week of February 25

In the US last week, investors reacted positively after Yeti (YETI) reported encouraging fourth-quarter earnings where sales beat street forecasts. In Asia Pacific, Investors dumped shares in Bingo Industries after it downgraded its full year profit forecast by 20 percent last week. In Europe, Wirecard (WDI GY) is back in the news this week after a German regulator introduces a short sell ban on the Bavarian payment processor.

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Drivers for the Week Ahead

  • President Trump said that the March 1 deadline for trade talks will be extended
  • The most important US data points this week will be February Chicago PMI reported Thursday, followed by ISM PMI Friday
  • There is another full slate of Fed speakers this week
  • UK parliament is scheduled to vote on a potential Brexit delay Wednesday
  • Canada reports January CPI Wednesday and Q4 GDP Friday
  • Japan reports January IP and retail sales Thursday; BOJ Governor Kuroda is clearly concerned and leaning more dovish

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Spotlight on Asian Securities Lending: PASLA 2019

The BBH team is very much looking forward to the upcoming 16th Annual PASLA/RMA Conference on Asian Securities Lending which will be held in Sydney, Australia next week.

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EM Preview for the Week Ahead

EM ended the week firm on rising optimism regarding US-China trade. Talks will continue this week ahead of Friday’s deadline. It may be too soon to strike a deal, however, and so we expect a 60-day extension. China provides the first snapshot of February activity with its PMI readings this week, where some stability is seen after recent stimulus measures. Downside risks remain in place, however. Continue reading “EM Preview for the Week Ahead”

Dollar Firm After FOMC Minutes but Aussie Takes the Spotlight

  • The FOMC minutes can be best described as less dovish than anticipated
  • The next piece of the US labor market puzzle comes out today
  • Eurozone flash PMI readings for February were reported; ECB will release the record of its January 24 meeting
  • Reports suggest the Chinese port of Dalian has banned coal imports from Australia; Australia reported January jobs data
  • Korea reported weak trade data for the first 20 days of February
  • Bank Indonesia kept rates steady at 6.0%, as expected; Banco de Mexico releases minutes Continue reading “Dollar Firm After FOMC Minutes but Aussie Takes the Spotlight”

From the Securities Lending Trading Desk

In the Americas, Frontier is the owner and operator of an extensive copper and fiber optic network but they are up against a massive debt burden. In Asia, shares in the Doosan Group of companies plunged last week after reporting worse than expected earnings. In Europe, the UK contractor, Interserve (IRV LN), has seen two of its largest shareholders refuse to back a deal the board had set out to swap creditor balances for equity in the firm.

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Drivers for the Week Ahead

  • The greenback should see consolidative trade early this week
  • FOMC minutes will be released Wednesday; there are many Fed speakers this week
  • The US growth outlook for Q4 just got a whole lot worse
  • Eurozone flash PMI readings for February and the ECB record of its January 24 meeting will be released Thursday
  • Brexit talks continue in Brussels; UK reports December labor market data Tuesday
  • Japan reports January trade Wednesday and CPI Friday
  • US-China trade talks will resume this week in Washington Continue reading “Drivers for the Week Ahead”

EM Preview for the Week Ahead

Since their post-FOMC peak on January 31, both MSCI EM and MSCI EM FX have fallen. Virtually every EM currency has given up their post-FOMC gains, the lone exception being MYR (+0.2%). The worst performers have been ZAR (-6%), ARS (-3.3%), and TRY (-2.3%). This supports our belief that the liquidity and low US rates story is not enough to sustain the EM rally on its own. What’s still missing is an improved global outlook and we certainly didn’t get that with the US retail sales data. Continue reading “EM Preview for the Week Ahead”