Emerging Markets

News stories

• Banks cut EMEA sovereign dollar bond exposures

  EM sovereign dollar bonds have markedly under-performed their credit default swap cousins and comparable US corporates, possibly down to the fact Western banks face higher inventory charges.

• Accrued interest: EM reads

  Our selection of emerging markets-focused commentary on markets, economics and international policy, updated throughout the week

• Romania 'risks losing investor credibility'

  Investors could turn on Romania if it abandons its tough austerity commitments following the resignation of prime minister Emil Boc, analysts warn

• Malev turbulence set to roil Hungarian state finances

  The collapse of Hungary's national airline will heap more pressure on the country's already stretched finances, analysts warn

• EM FX fallout: cut spending or be damned

  Government spending cuts could be one way to stem the currency appreciation tide in Latin America, says Capital Economics, but at a cost. Still, it will do little to reduce potential distortions in the financial sector

• The ties that bind London and the RMB

  Here's a crib-sheet charting London's role as an offshore trading centre for the renminbi. But don't confuse these market developments with making the Chinese currency fully convertible.

• Turkey: crunch time for policymakers

  Recent currency gains and a reduced current account deficit appear to suggest that Turkey’s unorthodox policy mix is working. But analysts warn that the risks of a hard landing remain severe

• Meet 'Ben' Jiabao

  Can a Ben Bernanke/Wen Jiabao put save the global economy?

• Brazilian real appreciation rekindles ‘currency war’ concerns

  Expectations are mounting that Brazil may intervene to stem recent sustained currency appreciation and inflows, raising fears of renewed currency and trade tensions across developed and emerging markets

• Consensus forms on EM currency rally

  A cosy consensus has emerged that emerging market currencies can maintain their upward bias given strong liquidity conditions and attractive valuations.

• Argentina: the cost of under-reporting inflation

  The IMF has given Argentina six months to improve the accuracy of its inflation numbers, amid warnings that continued under-reporting will lead to a painful adjustment and possible recession

• IMF's China currency bombshell

  The IMF's decision to review whether China's currency is still "substantially undervalued" could prove a political bombshell given the US election season and the Fund's desire to tap Beijing for funding.

• China PMI: glass half full or half empty? You decide

  Do China's January PMI numbers point to a further contraction in manufacturing or to a recovery? Both, if the range of views following the release is anything to go by

• India’s new impossible trinity

  The Reserve Bank of India's monetary policy bind - boosting growth and liquidity without fueling inflation - is set to remain firmly entrenched, even amid a tentative recovery in the rupee

• Direct impact of QE3 and LTROs on EM ‘will be limited’

  Further liquidity operations by the US Federal Reserve and the European Central Bank won't directly result in a flood of capital to emerging markets, analysts suggest.

• EM currency rally: hold on tight

  The monetary policy/risk on-off dynamic holds the key as to whether EM currencies can continue their storming start to 2012.

• Asia vs. EEMEA: FX/oil prices edition

  Weaker Brent crude prices - especially in local currency terms - are likely to buoy Asia markets, and boost monetary easing. But it's a different story for EEMEA, according to a Bank of America report.

• US Fed: late to the inflation-targeting party

  By announcing a 2% inflation goal, the US Federal Reserve appears to be following in the foosteps of long-standing emerging market inflation targeters at a time when many are increasingly tilting towards growth

• Brazil rates: how low will they go?

  Brazil’s central bank indicated that interest rates will fall below 10% this year, but how far they cut and for how long will depend on fiscal policy

• Message to emerging markets: prepare for QE3

  The US Federal Reserve has strongly hinted that it may sanction a further round of quantitative easing in the coming months, posing policy challenges for emerging markets

• Apple's China charm offensive pays off

  China is the undisputed king of the Brics for Apple, highlighting the country’s huge – but all too often derided – consumption story

Other news stories

Features

• 

  CHINA: Moving targets

  China’s approach to migrant labour is changing in a way that could transform the lives of hundreds of millions of workers. It could also help fundamentally rebalance the world’s second-largest economy

• 

  CREDIT RATING AGENCIES: Under the influence

  Public anger at credit rating agencies has reawakened calls for a drastic reduction of their powers and for greater accountability. But a lack of credible alternatives suggests the solution to poor financial regulation may lie elsewhere

• 

  OFFSHORE RMB: Red herring?

  Recent months have seen an outsized level of excitement in global financial markets over the sale in Hong Kong of so-called ‘dim sum’ bonds. But there is reason to question the true scale of the offshore renminbi market and its potential growth

• 

  SOVEREIGN DEFAULT: A tale of two countries

  The divergent experiences of Argentina and Uruguay over the past decade show that managing sovereign crises and weighing up whether to default is rarely clear cut – even today

Comment & Opinion

• NICOLAS VERON: Banking federalism key to eurozone survival

  An integrated banking system must be a central part of any credible crisis-resolution plan

• 

  AGUSTIN CARSTENS: Boost the IMF but reform it too

  The G20 must provide the IMF with greater resources to tackle systemic crises, but a funding increase must be accompanied by governance reform

• 

  YU YONGDING: The absurdity of the Sino-US currency spat

  It is in neither China's nor the US’ best interest to continue bickering over currency

• MANFRED NEUMANN: The ECB’s dangerous game

  The ECB’s bond-buying policy is undemocratic, runs counter to its mandate and must end if it is to rebuild its relationship with Germany

• JEAN PISANI-FERRY: Europe must unchain itself to save itself

  Europe has enough resources to resolve its current crisis but an extraordinary series of constraints means it has to turn to emerging economies for help

Recent Issues & Archive

EM VIDEO: Markets turn on Italy as G20 summit fails

See the full range of videos in our video library

EM Week

In Focus: Monetary Policy

1. EM monetary policy: growth to the fore

2. Asean rate cuts: more aggressive than post-Lehman

3. Brazil rates: how low will they go?

4. Hungary: a temporary hiatus