Greetings,
We begin with emerging markets which have been experiencing a worse recession than what we saw during 2008/09. Here is the breakdown by country.
Source: @FitchRatings, h/t Josh
Continuing with emerging markets, here are more updates.
1. Taiwan’s economy has been sputtering as a result of the global demand slowdown (especially the PRC). The charts below show Taiwan’s output gap and the housing market correction.
Source: HSBC, h/t Josh
Source: HSBC, h/t Josh
Nevertheless, investors are jumping back into Taiwan. Here are the cumulative equity flows into EM Asia.
Source: Morgan Stanley
2. Saudi Arabia’s FX reserves continue to decline.
Source: HSBC, h/t Josh
3. Chinese investors are flooding into the US. This is a great way to move one’s money out of China to lower the risk of further RMB depreciation.
Source: @vexmark, @Bfly
4. Brazil’s public sector deficit looks terrible, missing economists’ expectations.
Source: Investing.com
5. Citi expects the Reserve Bank of India to cut rates, as the nation’s inflation rate remains benign.
Source: Citi
6. EM currencies have rallied sharply as the Fed turns dovish. On the margins this should help US manufacturers.
Source: @markets
7. FX reserves of emerging economies are still declining but at a slower pace now. Is this slowdown bullish for global equity markets?
Source: Deutsche Bank
Switching to Japan, it seems that banks are planning to start passing negative rates to their institutional clients – charging them for deposits. With short-term JGB’s running negative yields, where can firms place their cash without taking a hit?
Source: Reuters
Japan’s capital goods shipments trend seems to suggest weak CAPEX. Forecasts show that shipments should pick up in the coming months however.
Source: Credit Suisse
We now go to the Eurozone where yields continue to fall. Here is the average euro-denominated IG corporate bond yield.
