EM FX was mostly firmer last week, helped by Trump comments and softer US data. While this seems positive for EM, the global backdrop remains uncertain.  Some in EM (Russia, Turkey, and Korea) remain vulnerable to geopolitical concerns. In addition, idiosyncratic domestic political risks remain in play for other EM countries, such as Brazil, South Africa, and Turkey.  We expect the investment climate for EM to remain challenging this week.

Singapore reports March trade Monday, with NODX expected to rise 8.1% y/y vs. 21.5% in February. Despite firmer data, the MAS left policy unchanged last week and maintained its commitment to keep policy loose for an “extended” period.  If data continue to firm, we expect a change in the forward guidance at the October meeting that sets the table for a 2018 tightening move.  

China reports March retail sales and IP Monday.  The former is expected to rise 9.7% y/y, while the latter is expected to rise 6.3% y/y.  Q1 GDP will also be reported then, with growth expected to remain steady at 6.8% y/y.  

India reports March WPI Monday, which is expected to rise 6.0% y/y vs. 6.55% in February. Last week, March CPI came in at 3.8% y/y, lower than expected but still faster than 3.65% in February. RBI is clearly in hawkish mode, and is likely to continue tightening gradually. Next policy meeting is June 7.  If price pressures continue to rise, another 25 bp hike seems likely.  

Brazil central bank releases minutes from last week’s meeting Monday.  At that meeting, it cut 100 bp and implied that this pace would be maintained for the next meeting or two.  Brazil then reports mid-April IPCA inflation Thursday, which is expected to rise 4.48% y/y vs. 4.73% in mid-March.  Next COPOM meeting is May 31, and another 100 bp cut to 10.25% is likely. 

Colombia reports February IP and retail sales Monday. The former is expected at -1.3% y/y, while the latter is expected at -1.6% y/y.  The economy remains weak, and so the central bank is likely to continue cutting rates. Next policy meeting is April 28, and another 25 bp cut to 6.75% seems likely.