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Home / World / Trade Spat leads to a bitter end to emerging markets for the quarter

Trade Spat leads to a bitter end to emerging markets for the quarter

A week-end rally was not enough to reverse the downward trend for the emerging markets, whose equities and currencies recorded their worst quarter since 2015 amid China's escalating wartime scarcity and weakness

. The stock market index reached its lowest level since mid-July, falling 1.8 percent from the week's third weekly loss. An indicator tracking the currencies of developing countries lost a fifth week, losing 1.1 percent after having previously fallen to a seven-month low. Bloomberg Barclays local currency bond local currency bonds down 1.4%, fourth weekly decline

Bloombergs Srinivasan Sivabalan reports the worst quarter of EM since 2015

Bloomberg Daybreak: Middle East

Highlights for the week to June 29:

  • The White House embarked on plans to curtail Chinese investment but opted for a less confrontational approach and opted to call a seldom used law for economic emergencies
    • Chinese President Xi Jinping told a group of Mostly Americans and European multinational CEOs, which plans the Asian nation to strike back at US trade measures, reported the WSJ citing unidentified persons who were informed about the Global CEO Council
    • Chinese Vice Premier Liu He said, China and the European Union would have to voted to defends the multilateral trading system after talks in Beijing
  • China set the reference rate for the yuan for e straight days; the central bank will cut the amount of cash that some lenders must hold as reserves
    • The central bank said it would use comprehensive policy instruments to keep economic development stable and to stabilize market expectations
    • READ: China expects to defend yuan at key level as losses
    • Yield on 10-year government bond dropped to its lowest level since April 2017
  • South Africa's edge approached the level of 14 , 00 vs dollar before cutting losses on Friday; Nation has little room for further interest rate cuts unless the inflation outlook improves, the central bank said
  • The rupee has reached its lowest level since October 2015; Bank Indonesia increased its monetary policy measures with a rate hike that exceeded the forecast and ranked third within six weeks. the seven-day reverse repurchase rate has been increased by 50 basis points to 5.25 percent
  • The US will initiate the unprecedented step of imposing sanctions on a NATO ally if, according to a foreign ministry, Turkey receives a Russian missile defense system Official Testimony Before Congress
  • The Mexican peso was among the top performers of the week as voters elect a new president on election day. Investors have mostly priced in a victory of left-wing candidate Andres Manuel Lopez Obrador
  • The Turkish Lira led EMFX gains after Recep Tayyip Erdogan won the presidential election [1965-9024] Asia:
    • China's yuan fell to seven-month low the Shanghai Composite Index entered a bear market; A leaked report from a think tank backed by the Chinese government warns of a possible "financial panic" in the world's second largest economy
      • The picture of the slowing economy in the second quarter is misleading or even inaccurate, with retail sales and investment actually being stronger than official data show, after China Beige Book
    • Thailand's SET Index has been the first death cross since 2015; Thai baht extends a 3-week slide; current level is good for business and exporters will make more of weaker currency, fiscal policy bureau chief executive officer Suwit Rojanavanich said
    • Jakarta's composite index fell to the lowest in more than a year; President Joko Widodo's allies led the nationwide elections in important provincial races, with official results expected for July 9
      • Indonesia's trade deficit reached $ 1.5 billion in May [1965] and passed hence the median estimate of 606 million USD. The authorities will find ways to reduce foreign exchange spending and reduce current account deficits to improve economic growth without having to worry about trade balance, according to Minister of Finance Sri Mulyani Indrawati
    • Malaysia Ringgit retired; The government is trying to reduce its debt to less than 300 billion ringgit ($ 74 billion) from more than 1 trillion ringgit. Prime Minister Mahathir Mohamad was quoted by Channel News Asia
      • . Police confiscated approximately 1.1 billion Ringgit items in raids associated with former Prime Minister Najib Razak Investigations of the Disrupted Sovereign Fund 1MDB
    • The Philippine peso was little changed; The nation's inflation appears to be "flattened" and policymakers are watching the June data closely to help with the subsequent interest rate decision, said Finance Minister Carlos Dominguez, who is based in Bangko Sentral ng Pilipinas – Monetary Board
    • benchmark S & P BSE Sensex Index rose in local currencies by 7.5 percent in the quarter to June 29; In contrast, the rupee reached a record low (19659046) as a resurgence of crude oil prices and the sell off of emerging markets took the currency of the world's third-largest oil consumer tribute


    • Russia's ruble rose; Deputy Finance Minister Sergey Storchak said investors would return after a deficit in issuing domestic bonds in the second quarter . President Trump summit with President Vladimir Putin on July 16 in Helsinki, said the White House
    • Putin's popularity ratings a four-year low on his plan to raise the retirement age
  • Edge extended 5-week losing streak; South Africa's decision to change the constitution to allow expropriation without expropriation could discourage investment, according to Moody's Investors Service [1965-09]
  • The Hungarian forint reached a record low against the euro and government spokesman Zoltan Kovacs said, Economic indicators, performance give reason for the current price
  • Saudi Arabia's Tadawul All Share index advanced; The minimum foreign revenues would be at least $ 10 billion from passive funds with a total volume of up to $ 40 billion next year as a result of the MSCI's upgrading to EM status, said Khalid Al Hussan, Saudi Chief Executive Officer bourse
  • Polish zloty fell for a third week as Warsaw's WIG20 equity indicator entered a bear market and fell more than 20% from a January high; CD project, Poland's largest computer game maker and the most successful stock in the Polish index this year, recorded declines on Thursday
  • Saudi Arabia, Kuwait and the United Arab Emirates negotiate with Bahrain "to improve the stability of the financial sector" and becomes one Conclude program "soon," reports Saudi State Press Agency . The statement came after Bahrain's credit risk rose most in emerging markets this month as traders feared that it would not get support

Latin America:

  • Brazil's Ibovespa index of shares rebounded, as opposed to Real's third just week of decline; The Central Banks lowered the forecast for growth this year from 2.6 percent to 1.6 percent
    • A more difficult global scenario and a frequent truck strike complicated the forecast, said the central bank politician in minutes of their meeting on 19-20. June
    • Former army captain Jair Bolsonaro led the presidential field with 17 percent electoral support against Marina Silva's 13 percent in a scenario in which Luiz Inacio Lula da Silva [Ib] poll [19659010] The National Monetary Council mandated the central bank an inflation rate of 3.75 percent in 2021, with a margin of 1.5 percentage points in both directions
  • Argentina's peso was the worst performer; Economic activity recorded its largest decline in April since the inauguration of President Mauricio Macri in December 2015, which has lost 2.7 percent since March
    • The central bank remained unchanged at 40 percent.
    • 19659078] This week celebrated its one-year anniversary, again selling at an all-time high of 9.31 percent
  • The Mexican peso rose for a second week; Alfonso Romo, economic advisor to Mexico's presidential candidate Andres Manuel Lopez Obrador, told Reuters that the peso was undervalued and promised to strengthen it
    • Also, Mexican equities and peso-denominated government bonds

Data, events too Watch:

Sunday, July 1 Mexico Presidential elections
Monday, July 2 Indonesia, Thailand, Poland June consumer price index
China June Caixin Manufacturing PMI
Tuesday, July 3 Turkey, South Korea June consumer price index
Chile June trade data, May retail
Wednesday, July 4 South Korea Foreign exchange reserves June 19659077] Hungary Central Bank Protocols
Brazil May Industrial Production
Romania Central Bank Decision
Thursday, July 5 Philippines, Ta iwan Consumer Price Index June
So uth Korea May Current Balance
Malaysia May Trade Data
Friday, July 6 Indonesia, Philippines June Currency Reserves
Brazil [19659072] June IPCA inflation [19659088] Chile June consumer price index

– With the support of Srinivasan Sivabalan

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