1) China churns out more measures
2) The Bank of Israel increased the level of FX reserves that it considers adequate
3) Nigeria has a new president
4) Chile is joining Mexico in setting a hawkish tone
5) Brazil’s president Rousseff’s popularity fell off a cliff
6) Thailand’s military junta ended martial law after more than ten months
Over the last week, Brazil (+8.4%), Russia (+8.4%), and UAE (+8.0%) have outperformed in the EM equity space as measured by MSCI, while Hungary (-2.3%), Korea (-0.2%), and Singapore (flat) have underperformed. To put this in better context, MSCI EM rose 3.7% over the past week while MSCI DM fell -0.1%.
In the EM local currency bond space, Brazil (10-year yield -26 bp), Ukraine (-22 bp), and Russia (-20 bp) have outperformed over the last week, while Chile (10-year yield +13 bp), China (+7 bp), and Indonesia (+5 bp) have underperformed. To put this in better context, the 10-year UST yield fell -9 bp over the past week.
In the EM FX space, BRL (+3.3% vs. USD), RUB (+2.0% vs. USD), and CLP (+1.4% vs. USD) have outperformed over the last week, while COP (-0.4% vs. USD), CZK (-0.3% vs. EUR), and ARS (-0.2% vs. USD) have underperformed.
1) China churns out more measures. PBOC Governor Zhou hinted at additional stimulus and the central bank lowered the down payment required for some second home buyers. After increasing the QFII quota for a large US asset manager last week, officials now indicate that money managers no longer need to be part of QFII program in order to invest in HK shares through the exchange link.