Macro: Manufacturing recovery underway
- The global macroeconomic situation has continued to improve over the past month and it is quite clear that a recovery is under way in the global manufacturing sector. This is particularly true for the Emerging Asian economies and where the massive fiscal and monetary stimulus packages seem to be working. There are even signs that the situation is improving in the hardest-hit region – Central and Eastern Europe. Looking forward, however, we expect a fragile and weak recovery in CEE and risks are still elevated in the region – especially in the Baltic States and South East Europe.
Rates and yield: Calm in fixed income markets
- The Emerging Markets fixed income markets have been relatively calm over the past month – most notable in our view is the tendency for the markets to price in more rate cuts in CEE.
FX: Moderately bullish sentiment, hryvnia takes a beating
- The continued rise in global appetite has supported most EM currencies over the past months, even though the move in the EM FX markets has been relatively limited. The only notable positive exception is Ukraine where the hryvnia has been under significant selling pressure.
