Highlights Our leading gauges of EM commodity-demand growth indicate global industrial-commodity demand has troughed and will be moving higher in the wake of supportive global financial conditions. The magnitude and speed of any…
Analysis on Mexico and Central Europe is available on pages 6 and 10, respectively. Highlights Deflationary pressures have been intensifying in Malaysia and the central bank will be forced to cut its policy rate. To play this theme,…
Periods of industrial sector outperformance have historically been positively correlated with relative industrial sector earnings, broad market stock prices, and prior oversold technical conditions. They have been negatively…
Highlights Declining uncertainty over policy, stabilizing growth in China and improvements in international liquidity, all will allow global economic activity to pick up in the months ahead. A weak dollar will reinforce this positive…
A variety of pro-cyclical financial variables are pointing toward an improving global growth outlook. The AUD/JPY has clearly bottomed, the USD/KRW is weakening, and the silver to gold ratio has been strengthening. The most…
The New Normal for EM local bonds refers to their yields dropping even as EM currencies depreciate when global growth slows. This implies the past relationship between EM domestic yields on the one hand, and EM currencies and…
Another potential explanation for the resilience of EM domestic yields to local currency depreciation is investor complacency: extremely low and negative bond yields in DM are inducing an unrelenting search for yields. As a…