Armen Hamazaspyan
Research Analyst
-
Indonesia: A Value Trap
Given that the economy’s productive capacity is limited, government stimulus will lift nominal growth but do little to increase real output growth. The upshot will be rising inflation and wider twin deficits. This is bearish for the currency, bonds, and stocks.
-
Turkey: The Inflation Improvement Is Likely Temporary
The Central Bank of Turkey cut its policy rate from 37% to 36% as inflation fell below 30% for the first time in about 5 years. Our Emerging Markets strategists believe that the slowdown in inflation and attendant monetary easing will be temporary. Weak…
-
The RBI’s Rate Hike Won't Derail India's Recovery
The RBI raised its repo rate to 5.50% amid expectations of reaccelerating inflation and a weakening INR. Our Emerging Markets strategists expect the reacceleration in inflation to be temporary, as the Indian economy has absorbed much of the shock from energy…
-
Brazil’s Easing Cycle Nears A Pause
Brazilian inflation has eased enough for the BCB to continue cutting rates, but persistent domestic and external pressures should bring the easing cycle to a pause. The central bank delivered a fifth consecutive 25 bps cut, taking the policy rate to 13.75%.…
-
A Better Setup For Indian Assets
Indian inflation remains contained, while a stronger external backdrop and reaccelerating domestic demand support overweight positions in Indian equities and local-currency bonds. Headline CPI edged up to 4.4% in August but remained within the RBI’s target…
-
Mexico’s Disinflationary Backdrop
Mexico’s August headline CPI edged up to 3.3%, but remains comfortably within Banxico’s target range. While services inflation continues to prove sticky, the broader inflation backdrop remains benign, reducing odds of Banxico tightening more than is priced in…
-
Indonesia: The Rupiah Problem Persists
Indonesian headline CPI reaccelerated to 3.2%, moving closer to Bank Indonesia’s upper tolerance bound. Our Emerging Markets strategists expect inflation to remain elevated as higher food and energy import costs combine with the government’s continued…
-
Stay Long The Won And 10-Year Bonds
The Bank of Korea (BoK) delivered a second consecutive hike by raising its policy rate by 25 bps to 3.0%. While another hike is possible this year, our Emerging Markets strategists think a surging Korean won will tighten financial conditions enough to…
-
Energy Keeps the BoT Cautious
The Bank of Thailand kept its policy rate unchanged at 1%, against a backdrop of weak domestic demand and a still-elevated energy import bill. Although inflation has slowed and domestic demand subdued, the BoT continues to face significant imported inflation…
-
Indonesia’s “Growth-First” Trap
Bank Indonesia held rates at 5.75%, reinforcing our EM strategists’ view that earlier hikes were temporary measures to support the rupiah rather than a shift away from growth-first policy. Inflationary fiscal policy remains a concern as the government…