Tag: BRICs
November
Chinese economy gradually gaining momentum
The HSBC/Markit flash PMI continued to rise for the third consecutive month in China. Today’s encouraging news highlights our longstanding stance that the Chinese economy is turning and momentum is gradually starting to build.
China: October PMIs highlights the economy is at bottom
The Chinese industrial sector is improving which reinforces our longstanding view that the Chinese economy is at bottom. We maintain our expectation of no more cut of interest rates or reserve ratios this year. However, there is still some way to go before a sustainable recovery can be voiced.
September
China: Weak manufacturing confidence underlines growth worries
The tiny rise in confidence does nothing to change the weak outlook of the Chinese economy, and underlines expectations of a fragile Q3.
India raises subsidised diesel prices in a welcome move
The 14% rise is a welcome move amidst worsening public finances, making it easier for the central bank to cut rates. Accelerating inflation restricts the room for rate cuts, though.
Bleeding industrial sector puts pressure on additional stimuli
The Chinese manufacturing sector continues to suffer. Deteriorating employment situation prompts for an interest rate cut to ease the funding burden faced by struggling manufacturers. Policy makers’ cautious attitude will remain and no quick rebound in the economy is expected.
August
India: A drought of growth
The economic activity has rebounded somewhat during Q2, but considerable downside risks remain. With limited scope to support growth from both monetary and fiscal sides, we expect the economy to remain subdued in the near term.
Drop in Flash PMI calls for more stimulus from Beijing
China’s HSBC/Markit Flash PMI dropped to its nine-month low in August, dragged by both output and orders sub-indices. The very weak numbers call for additional stimulus measures from Beijing which we expect to be taken shortly.
CBR – still in waiting mode, but worried about inflation
The Russian central bank kept all interest rates unchanged, as expected. With growth remaining robust and inflation accelerating, we expect the central bank to hike rates later this year.
Chinese data adds uncertainty to the outlook
Chinese July data this morning surprised on the downside. We see an increased possibility of central bank action within a month, as the National Congress of the Communist Party is approaching and the stability-obsessed officials want to maintain confidence in the leadership.
Chinese manufacturing remains fragile, leaders pledge more aid
The Chinese manufacturing sector remains fragile as shown in the July PMI numbers. This is fits our view that recovery in the second half of this year will be slow. Though the country's leaders have pledged a focus on growth, measures in terms of investments may cause more problems in the longer term.
July
China Flash: pick up in Flash PMI albeit still fragile industrial sector
China’s HSBC/Markit Flash PMI picked up modestly in July, reaching the highest level since February this year. We maintain our projection that Chinese economy will recover gradually during the second half of the year.
New President in India and crucial needs for reforms
Pranab Mukherjee is elected as the new President of India. Investor hopes are on Prem-ier Manmohan Singh to implement a series of delayed reforms that would reduce the country’s high fiscal deficit and improve growth outlook.
China growth below 8% for the first time in three years
Chinese economy grew by 7.6% in Q2. It was the lowest growth in three year but in-line with expectations. We do not expect to see the economy slow further but rather pick-up steam.
June
Weakness on Chinese manufacturing sector continues
The HSBC/Markit PMI continued to fall in June, pointing towards a weak manufacturing sector and economy as a whole in Q2.
India keeps rates unchanged
The RBI prioritised inflation risks over slowing growth, and kept monetary policy unchanged today. The central bank will continue to balance between high inflation and weak growth this year.
Russia: preparing to fight inflation
The Central Bank of Russia decided to keep the benchmark interest rates unchanged today, which came as no surprise. The times of "easy ride" for the CBR are over.
Russia: preparing to fight inflation
The Central Bank of Russia decided to keep the benchmark interest rates unchanged today, which came as no surprise. The times of "easy ride" for the CBR are over.
RBI Preview – Between the devil and the deep blue sea
"To cut or not to cut?" is the question. India faces a dilemma, as growth is weak but inflation is high. We expect to see a cut, but the Monday meeting could go either way.
Mixed Chinese data
In general, the Chinese dataflow over the weekend was not as weak as one could have feared after the rate cut last week, and even cautiously encouraging if taking into account the new lending data received today.
Growth a priority – rate cut to be followed by other stimulus
We got our rate cut this week - not from the ECB but from the PBoC. Chinese benchmark interest rates were cut by 25bp in a surprise move, sending a strong signal that growth is a priority in China.
May
India: GDP surprises on the downside
The weak GDP data highlights the mounting problems in the economy and increases pressure for further monetary policy easing.
Chinese PMI weakens – points towards further stimulus
The decline in manufacturing confidence supports expectations of further stimulus measures from the Chinese authorities. After a bleak Q2 we thus expect growth to strengthen towards the end of the year.
INR: Breaking records
Weakening of the INR continues at a brisk pace in India.
China: PBoC cuts reserve requirement rates
The Chinese central bank (PBoC) cut reserve requirements by 50 bp last weekend, thus continuing to ease monetary policy. However, the pace remains slow, and we do not think the PBoC is done yet.
BRL: too much, too fast, too broad
The Brazilian real got hit hardest among the commodity and EM FX so far this year, with USDBRL reaching the 2.00. I expect CB support above and see BRL regain vs other EM FX near term...
Slowing inflation leaves room for policy easing
Chinese inflation slowed in April in line with expectations. This leaves room for fruther reserve requirement cuts.
RBI steps in with new measures to curb INR weakening
The Reserve Bank of India announced new restrictions on the FX markets in order to stop the INR from weakening further. This will, however, only offer temporary relief.
Chinese trade surplus grows on weak imports
The Chinese trade surplus surprised on the upside, while the weak import figures raise worries regarding domestic demand. We expect growth to remain slow in Q2.
CNY update: Stuck at 6.30 despite stronger fixing
The CNY has in recent days taken advantage of its broadened band, as the fixing has been pushed clearly higher. We still expect a gradually stronger CNY towards the end of the year.
China: Slightly stronger PMIs, but outlook little changed
Both manufacturing sector PMIs - the HSBC/Markit index and the NBS’s official PMI - rose in April. The indices remain, however, at very divergent levels, increasing the uncertainty of the Chinese economic outlook.
April
INR: Nearing record weak levels
Pressure on the INR is to remain until the domestic problems are resolved, but longer term strengthening is still intact. Thus we have revised up especially the short end of our INR forecast.
Emerging Markets FX Monocle – Calm before the storm?
Following the good start of the year, EM currencies did not hold on to the gains. Yet the orderly gradual EM FX decline has not produced much volatility creating the impression of a bomb waiting to explode if only another “black swan” event strikes.
India: Finally a rate cut!
The reserve bank of India today cut its repo rate by 50bp from 8.50% to 8.00%, which was more than the 25bp expected. The rate cut is a welcome boost to the struggling Indian economy.
India: Finally a rate cut!
The reserve bank of India today cut its repo rate by 50bp from 8.50% to 8.00%, which was more than the 25bp expected. The rate cut is a welcome boost to the struggling Indian economy.
Trading band of the CNY widened – increased unertainty ahead
The trading band of the CNY around the USD was widened from +/-0.5% to +/-1.0% around the central parity set by the central bank, which was no huge surprise after recent comments.
Trading band of the CNY widened – increased unertainty ahead
The trading band of the CNY around the USD was widened from +/-0.5% to +/-1.0% around the central parity set by the central bank, which was no huge surprise after recent comments.
China: Growth undershoots expectations in Q1
The Chinese economy grew by 8.1% y/y in Q1 – the weakest in almost three years. The GDP figures thus confirm the already established view of a continued slowdown in the Chinese economy.
New lending soars in China
New lending in China reached CNY 1010bn in March, picking up clearly from January and February. Although this supports expectations of a gradually turning Chinese economy, we continue to expect further reserve requirement cuts this year, as the economic outlook remains fragile.
Impressions from China
Based on impressions from Hong Kong and Shanghai: We expect mostly negative news in the coming months, but the real challenges are in the medium term - in finding Modern Chinese Communism.
March
Impressions from China III – Doing business in China
Traffic in Shanghai and the business climate in China seem to have much in common. If you look before crossing the street – either left-right or for the green light – then bicycles, scooters and cars alike will cross ahead of you, no matter the traffic rules.
Impressions from China II – Swift renminbi internationalisation
Renminbi internationalisation might be relatively swift. Gradually extending the use of CNH to include more capital transactions and promoting local currency invoicing among Chinese companies are likely ways to continue the process.
Impressions from China I – Modern Chinese Communism
The economy is slowing, house prices are falling, market-based construction has stalled, and local government debt is a key concern. Yet the real challenges are in the medium term - in modernising China.
Emerging Markets FX Monocle – a lot of news, little action
Risk is mispriced, again. And hence caution is still essential. But unless some of the key risks actually materialise, we are most likely to see Emerging currencies drift stronger over the coming months.
February
Sunday’s elections of Mr Putin
Putin is under pressure to secure progress for the middle class going forward and to reform. Political stability for the coming presidential term is by no means given!
Surprise acceleration in Chinese inflation
Contrary to expectations, inflation broke a five-month easing trend in January. Monetary easing still expected, but pushed back.
January
Emerging Markets Outlook 2012
Many interesting and globally important stories in easily digestable format.
Change of Power for the Superpower
Who will replace Hu? When will Wen step down? - Here is what you need to know about the change of leadership.
India – strong growth story sidelined
We are turning more negative on the economic outlook for this year.
December
Russia Update
Exports will bite into growth next year, but consumers are still spending.
Emerging Markets: Elections Calendar 2012
Presidential election of Putin - Xi Jinping new top China official - Taiwan Strait tensions could increase - New presidents in Mexico and Korea? - The end of Chavez? - One step at a time in Egypt
Asia FX Outlook
European debt crisis continues to weigh on Asian currencies
November
China commits to move faster towards a market-based exchange rate
In a draft action plan for the G20 meeting, China commits to more currency flexibility.
Slowdown not “made in China”
No hard landing in China. If the situation abroad worsens, the authorities still have enough room to manoeuvre.
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