DIR Return Create A Forum - Home
---------------------------------------------------------
profxvictory
HTML https://profxvictory.createaforum.com
---------------------------------------------------------
*****************************************************
DIR Return to: Global News
*****************************************************
#Post#: 218--------------------------------------------------
Emerging Markets: Preview of the Week Ahead
By: Marc Chandler Date: November 17, 2014, 8:23 pm
---------------------------------------------------------
Emerging Markets: Preview of the Week Ahead
HTML http://2.bp.blogspot.com/-fMlQoSolGPM/VGns6xSIKQI/AAAAAAAAOXc/Utzs_byPsyk/s1600/world.jpg
(from my colleagues Dr. Win Thin and Ilan Solot)
There were few notable developments out of the G20 meeting that
would directly impact EM markets. However, the escalating
tensions with Russia made evident in the meeting have increased
to the point that it could again lead to spillover effects.
Separately, the political climate in Brazil is heating up again
and starting to feel like a “3rd round” in the electoral
dispute. President Dilma is coming under huge pressure to
appoint a finance minister, while the corruption scandal
surrounding Petrobras deepens further.
Chile reports Q3 GDP and current account Tuesday. Growth is seen
slowing to 0.9% y/y from 1.9% in Q2. The central bank meets
later that day and is expected to keep rates steady at 3.0%.
Despite slowing growth, CPI rose 5.7% y/y in October and was the
highest rate since January 2009. This is well above the 2-4%
target range and should keep the bank on hold until inflation
starts moving back towards that range.
South Africa reports October CPI Wednesday, expected to remain
steady at 5.9% y/y. The Reserve Bank then meets Thursday and is
expected to keep rates steady at 5.75%. This will be the first
meeting under new Governor Kganyago. Of the 22 analysts polled
by Bloomberg, 6 are looking for a 25 bp hike to 6.0%. With
inflation back in the 3-6% target range and growth still
sluggish, we do not think the tightening cycle will continue so
soon under Kganyago.
Brazil reports mid-November IPCA inflation Wednesday, expected
to rise 6.57% y/y vs. 6.62% in mid-October. Price pressures at
the wholesale and PPI level have been easing for several months
now, and hopefully consumer prices will follow them lower. The
situation is complicated a bit by the recent hike in domestic
fuel prices, which could keep inflation elevated near-term. The
central bank is thus likely to hike rates by 25 bp again at the
December meeting.
Banco de Mexico releases its quarterly inflation report on
Wednesday. Mexico then reports September INEGI retail sales on
Thursday. ANTAD sales have already been reported at -2.1% y/y
for September and so there is some downside risk to the INEGI
reading. However, ANTAD sales rebounded and rose 2.1% y/y in
October. Mexico then reports Q3 GDP on Friday, expected to rise
2.3% y/y vs. 1.6% in Q2.
HSBC reports flash China PMI for November on Thursday, expected
at 50.2 vs. 50.4 in October. Weaker than expected China data
last week weighed on market sentiment. New yuan loans came in at
CNY548.3 bln vs. CNY626.4 bln consensus, while aggregate
financing came in at CNY662.7 bln vs. CNY887.5 bln consensus.
Money growth, IP, and retail sales were all slightly slower than
expected. We still see more targeted stimulus out of China, but
no rate cuts or other large-scale stimulus measures.
Taiwan reports October export orders and Q3 current account
Thursday. Orders are seen rising 10.3% y/y vs. 12.7% in
September, and have been picking up recently. However, the weak
yen is an issue, and could start negatively impacting exports
and export orders in the coming months. Indeed, October exports
rose a weaker than expected 0.7% y/y and was the weakest
undistorted rate since October 2013.
Central Bank of Turkey meets Thursday and is expected to keep
rates steady. A very small handful of analysts are looking for
easing to resume, but we think it’s too early still. CPI rose
9.0% y/y in October vs. 8.9% in September, well above the 3-7%
target range. Elsewhere, vulnerabilities are easing a bit as the
external accounts benefit from lower oil prices. The 12-month
current account gap fell to -$46.7 bln in September, the lowest
since December 2010.
Poland reports October IP Thursday, expected to rise 1.4% y/y
vs. 4.2% in September. Later that day, the central bank also
releases minutes from its last meeting. Poland GDP grew 3.3% y/y
in Q3, and may help justify the decision of the central bank to
surprise markets with a pause in the easing cycle. That said,
CPI for October (a less backward looking indicator than GDP)
came in at -0.6% y/y, so we are not convinced there will be no
more easing in Poland.
Malaysia reports October CPI Friday, expected to rise 3.0% y/y
vs. 2.6% in September. The increase is due largely to a 10% rise
in fuel prices that month, as the government reduced subsidies
in an effort to narrow the budget gap. The economy is slowing,
as Q3 GDP growth came in at 5.6% y/y vs. 6.5% in Q2. With
consumption likely to slow as a result of increased fuel prices,
we think the central bank will remain on hold for now. If has
kept rates steady since the first and only 25 bp rate hike back
in July.
*****************************************************