Emerging Markets: Calendar Week Ahead Preview

From Brown Brothers Harriman & Co.'s Global Head of Emerging Markets Strategy via Marc to Market:

(from my colleague physician Win Thin)

EM FX ended Fri on a mixed note, amongst TRY as well as ARS leading the gains. However, the jobs information supports our sentiment that the Fed is probable to cash inwards one's chips on hiking rates, which is negative for EM. Furthermore, merchandise tensions volition stay high later the United States of America of America announced plans to slap tariffs on an additional $267 bln of Chinese imports. This negative backdrop should weigh on EM this week.
 
China reports August CPI as well as PPI Monday. CPI is expected to rising 2.1% y/y as well as PPI past times 4.0% y/y. Money as well as loan information volition hold upward reported this week, merely no engagement has been set. Retail sales as well as IP volition hold upward reported Friday. Sales are expected to rising 8.8% y/y land IP is expected to rising 6.2% y/y. We produce non whatsoever farther stimulus for the fourth dimension being, equally the previous measures are nevertheless taking effect.

Czech Republic reports August CPI Monday, which is expected to rising 2.4% y/y vs. 2.3% inwards July. If so, it would inwards a higher house the 2% target merely inside the 1-3% target range. The key banking venture should cash inwards one's chips on its tightening cycle. Next policy coming together is September 26, merely 3 hikes inwards a row seem to hold upward aggressive. Rather, nosotros favor a hike at either the Nov 1 or Dec twenty meetings.

Turkey reports Q2 gross domestic product Monday, which is expected to grow 5.3% y/y vs. 7.4% inwards Q1. The key banking venture meets Thursday. Expectations are all over the place, amongst two analysts looking for no modify as well as 1 looking for a 725 bp hike to 25%. The median forecast is a 300 bp hike to 20.75%, which would mirror the bare minimum that the banking venture did dorsum inwards May. The banking venture has tended to disappoint at every juncture during this crisis, as well as nosotros mean value fifty-fifty a 300 bp hike would hold upward a greenish low-cal to sell the lira again. July electrical flow concern human relationship information volition hold upward reported Friday.

The Philippines reports July merchandise Tuesday. Exports bring been contracting this yr fifty-fifty equally inflation spiked to 6.4%y/y inwards August. Next policy coming together is September 27 as well as a 50 bp hike is expected. Governor Espenilla warned that a policy coming together exterior of the scheduled six-week cycle is an option.

Hungary reports August CPI Tuesday, which is expected to rising 3.3% y/y vs. 3.4% inwards July. If so, inflation would stay inwards a higher house the 3% target merely inside the 2-4% target range. Bloomberg consensus sees a gradual tightening cycle starting inwards 2019. Next policy coming together is September 18, no modify is expected then.

South Africa reports July manufacturing production Tuesday, which is expected to rising 0.9% y/y vs. 0.7% inwards June. July retail sales volition hold upward reported Wednesday, which are expected to rising 1.6% y/y vs. 0.7% inwards June. The economic scheme remains weak fifty-fifty equally inflation is rising. Next policy coming together is September 20, as well as nosotros await a hawkish hold. The marketplace sees tightening starting around mid-2019 merely nosotros mean value the weak rand volition strength SARB to hike sooner than that....

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