2 Feb 2015
Key events ahead in EM – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team previews the key events ahead in Emerging Markets, noting that waning risk appetite along with growing uncertainty in Europe about Greece have set up emerging markets for a difficult week.
Key Quotes
“Korea reports January CPI Tuesday, expected to rise 0.9% y/y vs. 0.8% in December. This remains well below the 2.5-3.5% target range, and yet the BOK has stood pat. We think easing will resume this year, as the real sector is showing signs of further weakness.”
“Reserve Bank of India meets Tuesday and is expected to keep rates unchanged. However, we cannot rule out another dovish surprise after the one in January. Of the 35 analysts polled by Bloomberg, 27 see no change and 8 see a 25 bp cut. If not February, then the next cut is likely at the meeting that follows. Price pressures remain very low.”
“HSBC reports China January services and composite PMI Wednesday. Markets are prepared for softer China data, but are also expecting further stimulus measures. We think both will be seen in the coming weeks. We do not think the PBOC has embarked on a plan to weaken the yuan.“
“Czech retail sales for December will be reported Wednesday, expected to rise 5.5% y/y vs. 0.8% in November. The central bank meets Thursday and is expected to keep policy unchanged, but could extend its forward guidance deeper into 2016 as the overall economic outlook remains vulnerable.
“Polish central bank meets Wednesday and is expected to keep rates unchanged at 2.0%. However, a small minority of analysts are looking for a 25 bp cut. We think that easing will resume this year as deflation risks remain strong.”
Key Quotes
“Korea reports January CPI Tuesday, expected to rise 0.9% y/y vs. 0.8% in December. This remains well below the 2.5-3.5% target range, and yet the BOK has stood pat. We think easing will resume this year, as the real sector is showing signs of further weakness.”
“Reserve Bank of India meets Tuesday and is expected to keep rates unchanged. However, we cannot rule out another dovish surprise after the one in January. Of the 35 analysts polled by Bloomberg, 27 see no change and 8 see a 25 bp cut. If not February, then the next cut is likely at the meeting that follows. Price pressures remain very low.”
“HSBC reports China January services and composite PMI Wednesday. Markets are prepared for softer China data, but are also expecting further stimulus measures. We think both will be seen in the coming weeks. We do not think the PBOC has embarked on a plan to weaken the yuan.“
“Czech retail sales for December will be reported Wednesday, expected to rise 5.5% y/y vs. 0.8% in November. The central bank meets Thursday and is expected to keep policy unchanged, but could extend its forward guidance deeper into 2016 as the overall economic outlook remains vulnerable.
“Polish central bank meets Wednesday and is expected to keep rates unchanged at 2.0%. However, a small minority of analysts are looking for a 25 bp cut. We think that easing will resume this year as deflation risks remain strong.”