20171031-法国巴黎银行-EM_TODAY_8页_234kb

EM STRATEGY DAILY SUMMARY - 31 October 2017

Core Content Overview

This document is a daily strategy update from BNP Paribas, covering key developments in Emerging Markets (EM) and related financial instruments. It provides insights into economic and market trends across Turkey, Latin America (Latam), and Asia, as well as relevant legal and regulatory disclosures.

Key Market Updates

Turkey

• Treasury Annual Financing Program: The Turkish Treasury will release its annual financing program today.
• Debt Rollover Projections:
  • Domestic debt rollover ratio is projected to reach 130% in 2017, up from 90% in 2016.
  • External debt rollover is expected to be 94% in 2017, compared to 60% in 2016.
• Reasons for Higher Rollovers: Increased budget deficits and higher cash reserves.
• Polish Inflation Data: October inflation numbers are to be published today. Economists forecast a 2.0% y/y headline CPI rate, driven by above-trend growth and rising global commodity prices.
• Currency Outlook: The HUF is expected to maintain strong inflows, and its depreciation momentum is unlikely to continue.

Latin America

• Argentina's Credit Rating Upgrade: S&P has upgraded Argentina's sovereign credit rating from B to B+ with a stable outlook, following President Macri's performance in mid-term elections and his plans for pension and tax reforms, as well as cuts in electricity subsidies.
• Brazilian Central Bank (BCB) Minutes: The release of the monetary policy meeting minutes will be closely watched for insights into the BCB's next steps.
• Selic Rate Outlook: The strategy team expects a terminal Selic rate of 6.5% by next year.
• DI Market Outlook: The outlook for rates is downward, but rapid rate declines are unlikely due to local macro funds' positioning, lack of clear short-term drivers, and the aftermath of the May 2017 political scandal.
• Mexico: Q3 GDP data will be released, but the focus is on MXN after the Foreign Exchange Commission announced $4bn in FX hedging tool auctions.

Asia

• Asian Markets: Generally stronger this morning.
• KRW Performance: The KRW is up 0.3% against the USD, following news of a deterioration in Sino-Korean tensions.
• CEEMEA and CEE3: CEE3 (Central and Eastern Europe) has outperformed in global bond indices, supported by FX strength, particularly against the USD.
• Investor Demand: Increased demand for CEE3 assets is expected due to losses in higher-beta EM assets.

Strategy Contacts

Legal and Regulatory Disclosures

• Non-Independent Research: This document is non-independent research for regulatory purposes and is a marketing communication under MiFID.
• Conflicts of Interest: BNP Paribas may have financial interests in the issuers or instruments discussed and may engage in transactions inconsistent with the views expressed.
• No Investment Advice: The document does not constitute investment, financial, legal, or tax advice.
• Confidentiality: The information is provided on a strictly confidential basis and may not be distributed without prior consent.
• Disclaimer of Liability: BNP Paribas disclaims any liability for inaccuracies or omissions in the information provided.
• Indicative Pricing: Any indicative prices or terms are based on internal models and may vary from market sources.
• Performance Data: Performance data may be based on back-testing and is for illustrative purposes only.
• Jurisdictional Restrictions: The document may not be eligible for sale in all jurisdictions or to certain investors.

Summary of Main Points

• Turkey: Higher domestic and external debt rollover expected due to increased budget deficits and cash reserves.
• Latam: Argentina's credit rating upgraded, Brazil's BCB minutes to be scrutinized, and Mexico's focus on FX tools.
• Asia: Asian markets are strong, with KRW leading gains. CEE3 assets are in demand due to losses in higher-beta EM assets.
• Legal Disclaimer: The document is a marketing communication, not investment research. No liability is accepted for reliance on its content.
• Confidentiality and Risk: Information is confidential and may involve high risk. Users must consult independent advisors before acting on the content.