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Emerging market equities have had their worst run since October
2018, as currencies extend their series of four-week defeats following trade disputes
have intensified between the two largest economies in the world. The United States has increased
tariffs on 200 billion dollars (about R2 billion) of goods from China, which have pledged to retaliate.
The following is a summary of information on emerging markets and
highlights for the week ending May 10th.
Asset moves from 16:20 in New York on Friday: MSCI weekly
Emerging Equity Index -4.6%. MSCI EM FX Index -0.5%. Bloomberg Barclays Global EM
Bond Index in local currency (up to Thursday) -0.6%.
Strong points:
The Trump administration has increased fares over $ 200 billion
Chinese products at 25% of 10%; China said it would react, although it
has not yet specified how. The United States and China have concluded high-level trade negotiations on
Friday, lacking agreement but avoiding a break in negotiations; President
Trump says the talks are constructive while the removal of tariffs will depend on
future negotiations.
US officials gave China a month to reach an agreement or
faced with tariffs on all its exports to the United States, according to two familiar people
with the material. Chinese President Xi sent a letter to Trump asking him to work closely
together to ease trade tensions and both could talk on the phone.
The Trump administration will increase the number of countries
he monitors the handling of the currency in a next report, familiar people
with the question said, after lowering the bar for foreign governments to come
under surveillance.
Malaysia's central bank lowered its key interest rate
the first time since July 2016, reducing it by a quarter of a point to
3%; his Philippine counterpart also lowered his key rate by 25 basis points to
4.5%, the first reduction since an operational adjustment of the rate in 2016
North Korea is once again pushing the limits of what it can do with
return to missile tests in violation of international sanctions defended
by Trump.
The ruling African National Congress in South Africa leads with
57.3% of the votes after 90% of the votes were counted, according to the report
Independent Electoral Commission.
The central banks of Brazil, Chile and Peru left
The respective key rates remained unchanged in a context of difficult growth. Venezuela
Edgar Zambrano, vice president of the National Assembly, arrested in Caracas, scoring
the first major arrest since opposition leader Juan Guaido called the army
forces to revolt against the government on April 30.
Asia
Chinese exports fell unexpectedly and imports rose in April,
before the abrupt escalation of the trade dispute with the United States. The Nations
Inflation rate reached its highest level in six months in April, while
prices have risen faster than expected by analysts. Credit growth slowed more than
expected in April after jumping in the first quarter.
The country storing more gold in its coffers while the
Central Bank increased its bullion reserves for a fifth consecutive month, recording the
the biggest influx since 2016. This year announces it as the most important by far for
failures in the Chinese bond market of $ 13 billion. Time is approaching for South Korea
start worrying about "excessively low inflation", "said
Cho Dongchul, member of the Board of Directors of Bank of Korea.
Loans to the sole proprietorship of non-bank financial corporations
have grown rapidly and will require careful management, "said Kim Yongbeom,
Vice-President of the Financial Services Commission. Minister of Finance of Malaysia
Lim Guan Eng met with Fitch, Moody's and S & P, convinced that the
country will achieve its fiscal targets, he said.
Foreign ownership of government and Malaysian companies
bonds and notes fell 5.2% to 180.1 billion ringgits ($ 43 billion) in April, its lowest level since
March 2017. A senior official of the decision of Indian Prime Minister Narendra Modi
party forecasts, it will take support from allies to form the next
government, the first time the prospect of a coalition was raised.
Indonesia's economic growth slowed in the first quarter
global slowdown that has hurt the country's exports. Foreign exchange reserves were few
changed to $ 124.3 billion in April; current account deficit of the first quarter has widened to
2.6% of GDP compared to 2.01% revised in the same period of the previous year.
Bank of Thailand has kept its key rate unchanged at 1.75%
expected and said that the economy is expected to grow at a slower pace than previously
valued.
The Electoral Commission has assigned a so-called party list
seats, one day after the certification of 349 deputies who won
districts. The results indicate a pro-military government coalition.
The Philippine economy has seen the slowest growth in four years
years in the first quarter. Exports fell more than expected in March and the
the trade deficit has been larger than expected; inflation slowed for a sixth
consecutive month in April. Nation plans to sell yuan-denominated debt in the
week of May 13 after the lifting € 750m ($ 842m) for his return to the euro
bond market after more than a decade of absence, the treasurer Rosalia de Leon
said.
EMEA
The Turkish High Electoral Commission ordered the reorganization of the city hall
elections in Istanbul, canceling the defeat of President Recep Tayyip Erdogan
and sending it read in free fall as concerns grew about what critics say is the
last attack on the rule of law. The central bank intervened to tighten the
Thursday by increasing borrowing costs for lenders and making a
series of changes to reserve requirements to strengthen the currency.
Turkey denies information suggesting abandoning its plans
buy advanced Russian missile systems; The United States had threatened to punish Turkey
if it has purchased higher prices for fuels, alcohol and tobacco
Hungarian inflation close to the central bank's acceptance limits,
contradicting official forecasts of slowing and increasing pressure for
new monetary tightening.
Bahrain said it would receive about $ 2.3 billion this year from a
five-year support provided by its Arab Gulf allies as
Ile-Kingdom seeks to reduce its budget deficit and debt.
It is said that the nation plans a return to the international
bond market this year, Zimbabwean President Emmerson Mnangagwa has insured abroad
investors that they will have access to their dividends and that they are free to choose who they
want local partners. The governor of the central bank said he expected the
and black market exchange rates to converge within two months, such as currency
extended its decline against the dollar to nearly 25% since February.
Russia continued its sales of elephantine debt by offsetting
more than one billion dollars (about 14 billion rubles) at a single auction of rubles on Wednesday
Latin America
Brazil maintained its key interest rate at a record high
reported that a period of weaker than expected growth was still insufficient for
reduction of borrowing costs. Retail sales grew less than almost all analysts
expected in March, declining confidence curbing credit growth, even with
historically low interest rate.
Economists have reduced their growth forecasts for 2019 more than one
percentage point in the last three months, investment and consumer demand
blocked due to uncertainty surrounding the approval of pension reforms.
The President of Mexico, Andrés Manuel Lopez Obrador, has given up
round of tenders for the construction of a refinery of 8 billion dollars (about 113 billion rand).
project responsibility to Petroleos Mexicanos in difficulty.
Fuel company
Pemex will now take the lead in building the refinery based in the president's premises.
the native state of Tabasco and has about 2.6 billion dollars (about 36 billion) to start work, Pemex
bonds sold after the news.
From Mexico, additional cargo between Mexico and the United States is retained
borderline, with increasingly clear evidence that these delays are being mitigated
prospects for US companies.
In the most daring sign to date, Venezuela is in the process of suppressing
complex network of financial controls, the government lifted controls on banks
foreign exchange trading; the move comes 16 years after former president Hugo
Chavez imposed controls, but could prove to be too little too late as the country
hyperinflation and a historic economic depression.
Chile and Peru leave their key rates unchanged at 3%
and 2.75% respectively, with economic growth remaining moderate. Ancient Argentina
President Cristina Fernandez de Kirchner, who heads the opinion polls before
October General Election, Public Speaking for the first time this year
without saying whether she would run for the presidency.
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