Article / 12 August 2016 at 9:26 GMT

Daily Shot: Emerging woes in emerging markets Team / Saxo Bank
  • FX market expect a significant in EGP over next year
  • Huge slowdown in Venezuelan imports
  • Nigeria delays publication of key indicators
  • Malaysia's industrial production better than expected
  • Turkish stock market recovering afterthe failed coup
  • More soggy numbers reported from China
By Walter Kurtz*

1. Let's begin with emerging markets where Egypt will receive a $12 billion bailout from the IMF (over several installments). The FX markets are still betting on a significant devaluation – nearly 30% over the next year.


2. Bloomberg points out that the deterioration of Venezuela's imports is accelerating the nation's product scarcity and pushing households to the limit.


3. Nigeria delayed its GDP and unemployment release. Budget problems? The numbers look too scary (risking further pressure on the currency)?


4. The Russian GDP contraction was smaller than forecast. Green shoots? See some colour below.



5. Malaysia's industrial production rose 5.3% (beating expectations) on broad-based economic growth.

6. India's 10-yr bond yield falls below the "pre-taper-tantrum" lows.

7. EM equity markets continue to do well. Here is the Turkish stock market recovering from the coup-related decline. The second chart shows Mexican stock market index.

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1. Next, let's look at China, where the latest economic numbers were weaker than expected. Investment growth was especially soft (relative to previous months).

Below is the breakdown of state-based stimulus. The nation's economy remains dependent on investment (or "malinvestment"). 
2. China's 10-yr government bond yield is hitting new lows with rumors circulating of material fixed income flows from Hong Kong to Mainland. 


3. Nations are starting to push back on China's aggressive foreign investments (to a large extent in infrastructure).


— Edited by Clare MacCarthy

* Walter Kurtz is a pseudonym

** This is an abridged version of the Daily Shot. To subscribe to the full version click here. E-mail addresses are never shared with anyone.


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