In the EM equity space, as measured by MSCI, South Africa (+3.1%), Turkey (+2.5%), and the Philippines (+0.9%) have outperformed this week, while Russia (-3.9%), Peru (-3.4%), and Brazil (-2.6%) have underperformed. To put this in better context, MSCI EM fell -0.3% this week while MSCI DM fell -0.7%.
In the EM local currency bond space, South Africa (10-year yield -18 bp), Poland (-8 bp), and Indonesia (-8 bp) have outperformed this week, while Brazil (10-year yield +11 bp), Peru (+9 bp), and Colombia (+9 bp) have underperformed. To put this in better context, the 10-year UST yield fell 15 bp to 2.24%.
In the EM FX space, ZAR (+2.5% vs. USD), RUB (+1.9% vs. USD), and ARS (+1.2% vs. USD) have outperformed this week, while HUF (-0.9% vs. EUR), KRW (-0.5% vs. USD), and PLN (-0.5% vs. EUR) have underperformed.
Malaysia’s central bank said it will allow investors to fully hedge their currency exposure. However, details remain scant. Note that the current limit is up to 25% of their assets. Assistant Governor Zahid also said that all domestic investors will be allowed to short-sell government bonds to boost market liquidity. Currently, only banks are allowed to take short positions. The latest steps will take effect on May 2.
Egypt declared a 3-month state of emergency after two deadly church attacks. ISIS took credit for the attacks on Palm Sunday. In related news, Israel closed its Taba border crossing with Egypt and warned of “imminent” attacks.
South Africa’s parliamentary no confidence vote has been delayed. It was originally scheduled for April 18, but the Constitutional Court will first have to rule on the opposition’s request for a secret ballot.
