20180316-法国巴黎银行-EM_TODAY_9页_256kb

EM STRATEGY DAILY SUMMARY - 16 March 2018

Core Content

This document is a summary of Emerging Markets (EM) strategy insights and market updates from BNP Paribas for 16 March 2018.

Key Market Updates

• India:

  • The strategy team recommends paying 5Y NDOIS with a target of 7%, due to recent divergence in the swap and bond curves.
  • The OIS curve is considered rich at the 5Y point, while the front end is pricing in fewer rate hikes (20bps) than the economists’ expectations (50bps).
  • This divergence may be due to offshore investors unwinding bond hedges and liquidating bond investments.

• Saudi Arabia:

  • The Saudi Arabia Monetary Authority (SAMA) raised both the repo and reverse repo rates by 25bps to 1.75% and 2.25% respectively.
  • The move is ahead of the Fed's anticipated rate hike next week and is attributed to significant deposit withdrawals.

Regional Outlook

• CEEMEA:

  • Moody's is reviewing Oman's sovereign credit rating (currently Baa2, negative outlook).
  • Polish data will be released including trade balance, core CPI, and wage numbers.
  • Given the lower-than-expected headline figures from the previous day, core inflation may also print on the low side, supporting the central bank keeping rates unchanged into 2019.

• Asia:

  • The Asia Strategy team has published a note on reserve adequacy.
  • Overall, net FX reserves and liability coverage ratios are at comfortable levels in most countries.
  • However, China is experiencing a sharp rise in short-term debt, and the Philippines is facing rapid deterioration in reserve adequacy ratios.

Additional Highlights

• India Macro Monthly is a new research product offering a comprehensive overview of India, including FX, rates, and economics.
• Presidential elections in Russia are set for the weekend (18 March), with polls indicating a likely victory for Putin.

Key Contacts

Legal and Regulatory Information

• The document is non-independent research and is intended for Professional Clients and Eligible Counterparties.
• It is subject to legal disclaimers and is not intended as investment advice, tax advice, or legal guidance.
• Indicative prices and recommendations are not binding and are based on internal models and available data.
• Conflicts of interest may exist due to BNPP's involvement in investment banking, underwriting, and advisory services.
• Options and ETFs discussed are complex instruments with high risk, and are only suitable for sophisticated investors.
• Restricted securities may be discussed and are only available to Qualified Institutional Buyers (QIBs) or non-US persons under Regulation S.

Disclaimer

• This document is for information purposes only and not intended to be relied upon as an authoritative source.
• BNPP does not accept liability for any loss or inaccuracy arising from the use of this document.
• Performance data may be based on back-testing and simulations, which may not reflect actual market conditions.
• Transactions involving the products discussed may be highly volatile and involve significant risk, including market, credit, and liquidity risk.

Legal Notices

• The document may be subject to EU and UK regulations, and is not a prospectus.
• Confidentiality is required, and the document may not be copied or distributed without written consent.
• BNPP may have financial interests in the issuers or securities discussed, and may act as market maker, advisor, or underwriter.

Additional Information

• Online Resources:

  • BNP Paribas Global Markets Website: www.globalmarkets.bnpparibas.com
  • Bloomberg Research:
    • Fixed Income Research: BPFR
    • G10 Interest Rate Research: BPBS
    • Emerging Markets Research: BPFR
    • Market Economics: BPEC

• US Disclosures:

  • Options and ETFs are complex and high risk.
  • Certain securities may be unregistered and are restricted under Rule 144A.
  • The document is not a solicitation of investment in the U.S. or to U.S. persons unless authorized.

• Distribution:

  • The document is distributed by BNP Paribas to intended recipients only.
  • It may be subject to local laws and regulations in different jurisdictions.