20171116-法国巴黎银行-EM_TODAY_7页_232kb

EM STRATEGY DAILY SUMMARY - 16 November 2017

Core Content Overview

This document is a daily strategy update from BNP Paribas, focusing on Emerging Markets (EM) and CEEMEA (Central and Eastern Europe, Middle East, and Africa) markets. It provides insights into market conditions, central bank policies, and investment opportunities in the FX, IR, and credit space.

Key Market Insights

Asian Markets

• Positive Sentiment: Asian markets are trading on a more positive note, with equities showing strength across the board.
• Risky Assets: The market is returning to risky assets following yesterday's US CPI release, which matched expectations.
• FX Performance:
  • The Korean Won (KRW) has strengthened against the USD, briefly breaching the 1,100 level.
  • Technical supports remain below the 1,100 level, indicating potential for further gains.
• Credit Space: CDS spreads are 2-3 basis points tighter, suggesting improved credit conditions.

Oil Market Positioning

• Speculative Positions: Net long speculative positions in oil are near the highs of earlier this year.
• Historical Performance: In March, oil prices fell by nearly 10%, but returns on long oil positions were close to zero over 3 months.
• Current Returns: This time, 3-month returns on oil are in excess of 10%, which means leveraged accounts can sustain positions better than before.
• Risk Assessment: The risk of unwinding these positions is lower now, given the stronger support.
• Future Outlook: A significant moderation in oil gains could change the outlook. The 30 November OPEC and non-OPEC meeting will be closely watched for potential supply cut extensions.

Central Bank Policy Outlook

Indonesia

• Policy Rate Decision: Bank Indonesia (BI) is expected to keep interest rates on hold, as it has exhausted room for further cuts due to the narrow rate differential with the US.
• Alternative Tools: BI may turn to macro-prudential tools to support the economy.

Egypt

• Policy Meeting: The Egyptian Central Bank is holding its policy meeting today.
• Inflation Outlook: Inflation is near its peak, so rate hikes are unlikely.
• Future Rate Cuts: Rate cuts could be considered in H1 2018 if inflation moderates and declines.

Strategy Contacts

Legal and Disclaimer Information

• Non-Independent Research: This document is non-independent research and may be subject to conflicts of interest.
• Marketing Communication: It is a marketing communication and not investment research.
• No Liability: BNP Paribas does not accept liability for any reliance on the information or opinions contained in the document.
• Confidentiality: The document is provided on a strictly confidential basis and may not be distributed without written consent.
• Indicative Prices: Any indicative prices are based on internal models and may not reflect actual transaction terms.
• Performance Data: Performance data may include back-testing and is for illustrative purposes only.
• Investment Risks: Transactions may involve high risk and volatility, including market, counterparty, and liquidity risks.
• Regulatory Compliance: The document is subject to various legal and regulatory requirements across jurisdictions, including the UK, France, Germany, Belgium, Netherlands, Portugal, Spain, and Switzerland.

Important Disclosures

• Options and ETFs: Options and ETFs are complex instruments with high risk. Detailed disclosures are provided for these products.
• Restricted Securities: Certain securities may not be registered under US securities laws and are available only to Qualified Institutional Buyers or non-US persons.
• Conflicts of Interest: BNP Paribas may have conflicts of interest due to its involvement in related transactions and advisory roles.

Conclusion

The document outlines a positive outlook for Asian markets, with emphasis on the KRW and oil positioning. It also provides insights into potential policy decisions by central banks in Indonesia and Egypt, suggesting a cautious approach towards rate changes and highlighting the importance of monitoring future developments, particularly the OPEC meeting. The legal and compliance sections emphasize the non-independent nature of the report and the associated risks of trading based on the information provided.