http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/http://www.fxstreet.com/fundamental/http://mediaserver.fxstreet.com/images/fxstreet-provider-logo1-en.gif7http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-11-13.htmlMacro: Asian recovery as strong as ever In Emerging Asia and LATAM the recovery has been strong and activity in many of these countries is now back to levels prior to the global credit crisis. The recovery is remaining very fragile in most CEE countries. Rates and yield: At a turning point Over the last few months Emerging Market yields have dropped further, but within the last couple week jitters in global financial markets have begun to push up markets rates – for example in Hungary andFri, 13 Nov 2009 09:24:02 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-11-13.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-10-15.htmlMacro: Recovery continues, but some worries emerge The global economic recovery continues. However, over the past few months, there have been some negative surprises in the G3 economies. However, the news out of most Emerging Markets continues to be mostly positive. Rates and yield: A mixed picture, but look for higher rates It has been a bit of a mixed picture for the Emerging Markets’ fixed income markets. While rates and yields have risen sharply in Brazil and South Africa, we have seen theThu, 15 Oct 2009 13:49:18 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-10-15.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-09-16.htmlMacro: Recovery continues Over the past month there have been increasing signs that the global economy is recovering, especially in the manufacturing sector worldwide, but also in most Emerging Markets (EM). (see Global Scenarios ) Rates and yield: Fixed income rally continues EM rates and yields have continued to decline over the past month although Poland and Indonesia are significant “outliers” with increasing concerns regarding the outlook for public finances in Poland driving its yieldsWed, 16 Sep 2009 06:48:16 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-09-16.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-06-15.v02.htmlMacro: 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 aMon, 15 Jun 2009 15:39:27 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-06-15.v02.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-06-15.htmlGlobal imbalances had grown large Two years ago more or less held the world record for current account deficits when the Latvian deficit reached more than 25% of GDP in Q3 2007. Since then we have seen a remarkable turnaround, and in January the Latvian current account actually turned positive! This is a very good illustration of the rebalancing of the global economy that has been going on since the second half of 2007. From 2003-4 to the second half 2007, global imbalances grew dramatically.Mon, 15 Jun 2009 14:56:24 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-06-15.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-05-15.htmlThere is a saying in the market that an equity investor should “sell in May and go away”, referring to the apparent seasonality in equity markets. Until now, the markets seem to have ignored this, and the global stock market rally has continued into May. That said, in recent days there have been some signs that the mood is changing from bullish to bearish – and this is becoming evident in Emerging Markets equity, fixed income and FX markets. Looking ahead for EM performance over the comingFri, 15 May 2009 15:41:52 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-05-15.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-04-30.htmlWe recommend selling CHF/TRY on a one-month horizon as a speculative play on the improved short-term outlook for emerging markets’ FX outlook on the back of increased global risk appetite. Even though we still believe that the fundamental macro outlook for many emerging markets economies is relatively bleak, we expect some positive surprises on US economic data in the coming weeks/months – specifically we expect a positive ISM manufacturing surprise tomorrow. In such environment EM FX couldThu, 30 Apr 2009 09:48:24 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-04-30.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-04-15.htmlThe global economic news flow improved on several fronts over the last month. First, there are tentative signs that the global industrial cycle is beginning to stabilise. Second, the IMF reformed its arsenal of credit facilities in order to get more funds out faster and with fewer conditions attached – at least for countries with strong fundamentals. Further, at the G20 meeting earlier this month, it was decided to boost IMF’s lending resources to USD 750bn. Manufacturing surveys have improvedWed, 15 Apr 2009 17:08:04 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-04-15.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-03-13.htmlAsia is that light…... • There is no doubt that the global economy is in the midst of the worst downturn since the end of the Second World War. However, there are some signs of improvement in certain parts of the global economy. • This is especially the case in Emerging Asia where there are signs that the deterioration in the manufacturing sector is beginning to come to an end. while the outlook is bleak for CEE • Things unfortunately look a lot worse in Central and Eastern Europe (CEE), whichFri, 13 Mar 2009 15:13:01 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-03-13.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-02-13.htmlTentative signs of stabilisation ... • In recent months there have been tentative signs that the contraction of manufacturing activity is abating, albeit from very low levels. At the moment it looks as if China and India might be the first major economies to recover from the global financial crisis. • Despite some light emerging at the end of the tunnel, we remain cautious. The negative ramifications from the sharp contraction in activity will start to play out for emerging markets in theFri, 13 Feb 2009 15:14:51 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-02-13.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-01-16.htmlIndustrial productions in freefall and no improvement in sight • Economic data since October have shown a remarkably synchronised deterioration of the indicators for the manufacturing sector globally - and to date there has been no sign of any improvement. • The sharp drop in economic activity in the US and Euroland is now having a massively negative impact on Emerging Markets - particularly in industrialised exporting countries in Asia; however, the Central and Eastern European economies areFri, 16 Jan 2009 16:06:19 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2009-01-16.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-12-15.htmlEconomic indicators head down • It is clear to everybody that the global economy is in a very severe downturn, maybe the worst since the end of the Second World War, and that the global financial system is under severe stress. • The slowdown is broad-based, but we expect the CEE/CIS regions to be hit hardest. However, LATAM growth will also adjust significantly down. In Asia, growth will also slow in the short term, and we note that China is now slowing more than most watchers expected a fewMon, 15 Dec 2008 15:06:24 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-12-15.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-11-14.htmlEmerging Markets hit the wall Black October has turned into to Black November for Emerging Markets - both for the financial markets and for economic growth in most EM countries. The crunch is now hitting Emerging Markets very hard - something clearly visible in EM growth numbers. For some countries the credit crunch has led to outright economic and financial meltdown. Everyone hurting Most at risk of significant negative GDP growth are the Baltic States, Hungary, Romania, Ukraine, KazakhstanFri, 14 Nov 2008 15:13:04 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-11-14.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-10-15.htmlThe Icelandic canary The global credit crisis is now spreading to the most leveraged economies in the world. Iceland was the first economy to fall victim to the global credit crisis. However, it is not only Iceland that seems to be in need of a helping hand from the IMF. This week first Hungary was offered “technical and financial” support from the IMF and then the Ukraine later also asked for assistance. Contagion to leveraged markets Over the past month credit default swaps spiked in aWed, 15 Oct 2008 13:04:07 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-10-15.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-09-16.htmlHard to find much good news • It's hard to find much good news on the global economy these days and the same unfortunately can be said for Emerging Markets (EM). • A nasty cocktail of intensified global credit worries, increased political and geo-political tensions and finally plummeting commodity prices is making the outlook for most Emerging Markets bleaker. Commodity exporters are being hit • Since late June commodity prices have plummeted. This is obviously bad news for LATAM and CISTue, 16 Sep 2008 12:44:29 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-09-16.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-08-18.htmlUSD rebound to continue With the weakness in European economies becoming more pronounced recently, the upward trend in EUR/USD has been broken. Even though the short-term movement might be a bit exaggerated, the EUR/USD bullish sentiment has probably shifted. We therefore expect EUR/USD to continue to decline over the coming 12 months towards EUR/USD 1.40. Further dollar strength would be positive for the EM currencies with the highest positive correlations with the dollar. We believe thisMon, 18 Aug 2008 07:05:19 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-08-18.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-07-04.htmlTougher times for policymakers • In the June edition of Emerging Markets Briefer we made the argument that in today’s world of slowing global growth, rising inflation and an ongoing credit crisis, it is extremely important that economic policies be credible. We still believe this theme is extremely important, and market developments in the past month clearly underline this fact. • With the global economic and financial environment worsening, policymakers will be tested to a much greater degreeFri, 04 Jul 2008 14:48:16 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-07-04.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-06-03.htmlThe central bankers’ dilemma • Rising inflation and slowing growth: A key dilemma for EM central banks. • It is not a given that all EM central banks will do the right thing. • Some will fight inflation, but others will cave into political pressure and abandon the fight to secure low inflation. • This should be reflected in market pricing, but has probably not yet happened. The Ukrainian inflation farce – will it be copied? • The Ukrainian central bank (NBU) is a good example of a central bankTue, 03 Jun 2008 08:37:18 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-06-03.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-04-10.htmlWhat happens when USD rebounds? • A seven-year weakening trend in the dollar against the euro might be coming to an end. If this is the case, it will have a significant impact on Emerging Markets’ currencies as well. • EM currencies like the CEE currencies tend to move in sync with euro, while other EM currencies like most Asian and LATAM currencies tend to move in sync with the dollar. Furthermore a strengthening of the dollar will naturally lead to a strengthening of the currencies that areThu, 10 Apr 2008 14:54:37 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-04-10.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-04-03.htmlFX markets have been focused on central banks • Over the last month a number of Emerging Markets currencies have continued to be under pressure. This has especially been the case for several of the EMEA currencies – where a combination of the impact from the global credit crunch and large external imbalances has weighed negatively on for example the Turkish lira and the South African rand. • Taking a glance at chart 1 on page three one might note that the three bestperforming currencies in ourThu, 03 Apr 2008 08:27:12 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-04-03.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-03-05.htmlCommodity land is decoupling • In the previous edition of this publication we highlighted the fact that it seems like the financial markets had lost confidence in the “decoupling story” – hence, that the financial markets apparently no longer believe that the Emerging Markets could avoid the negative impact from the slowdown in US growth. • However, since then, another decoupling story is beginning to become apparent. This is the story of the growth boom in what we could call ‘Commodity land’Wed, 05 Mar 2008 08:26:43 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-03-05.htmlhttp://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-02-04.htmlThe Fed has put monetary easing on fast track • During the past month, the perception of the US economy has turned ever more grim in the financial markets and the Fed has tried to restore confidence in the US economy by aggressively cutting rates by 125 bp. Remarkably, USD has survived this ordeal rather well. • The main reason is that the markets are increasingly questioning the global economy’s and the Emerging Markets’ abilities to maintain robust growth in a scenario with a severe downturnMon, 04 Feb 2008 15:08:49 GMThttp://www.fxstreet.com/fundamental/market-view/danskeresearch@danskebank.com (Danske Bank A/S)http://www.fxstreet.com/fundamental/market-view/emerging-markets-briefer/2008-02-04.html