20180302-法国巴黎银行-EM_TODAY_10页_267kb

EM STRATEGY DAILY SUMMARY - 02 March 2018

Core Content

This document is a daily market update from BNP Paribas on Emerging Markets (EM) strategy, covering global and regional market dynamics, policy outlooks, and key economic indicators. It is produced by multiple branches and strategists across London, São Paulo, and Singapore, providing insights on FX and interest rate trends in various regions including CEEMEA, Latam, and Asia.

Main Points

Global Market Overview

• Global Equity Sell-Off Continues: The global equity market remains under pressure due to geopolitical concerns, particularly the EU's potential countermeasures against US tariffs on steel and aluminium.
• USD Strength Curbed: The anticipated EU response to US tariffs has helped to curb USD strength, leading to a broader strengthening of Asian currencies.
• Risky Assets Under Pressure: The sell-off in equities and commodities is expected to continue, with a potential impact on UST yields and EM assets.
• Market Flows Remain Choppy: Until a clear USD downtrend emerges, flows into risky assets are likely to remain volatile.

Asia FX and Rates

• China Rate Rally: Despite US rate pressures, Chinese rates have been rallying, with the 1Y bill rising by 60 bps year-to-date.
• PBoC Rate Policy: The document suggests that the People's Bank of China (PBoC) will likely lag behind the Fed in raising rates, due to slowing growth.
• Government Bonds as Safe Haven: Chinese government bonds are returning to their traditional role as a safe asset amid credit scandals.
• Interest Rate Targets: The 5Y CGB rate target has been extended to 3.6%.

Latin America (Latam)

• New Forecasts Published: BNP Paribas has released new forecasts for Latam currencies, based on the FEER FX valuation model.
• USD Cycle End: The forecasts assume the strong USD cycle has ended and global USD depreciation is expected.
• Brazil GDP Update: Brazil's Q4 2017 GDP growth was weaker than expected at 0.1% q/q s.a. (2.1% y/y), though the positive outlook for 2018 real GDP remains.
• Election Impact: The document simulates scenarios under different macroeconomic policies, including pension reform, and highlights the need for structural reforms regardless of the election outcome.

CEEMEA

• Poland Policy Meeting: The National Bank of Poland (NBP) will release new economic projections for 2020 during its 6-7 March policy meeting.
• Inflation Outlook: Inflation is expected to remain broadly unchanged in the short term, though the PLN's strength may offset rising price pressures.
• Policy Bias Shift: While the immediate impact on monetary policy is limited, the policy bias is expected to become more hawkish over the year.

Key Contacts

Legal and Regulatory 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.
• Confidentiality: The information is provided on a confidential basis and should not be copied or distributed without prior consent.
• No Liability: BNPP disclaims any liability for inaccuracies or omissions in the document.
• US Disclosures: The document includes important disclosures regarding options, ETFs, and convertible securities, emphasizing the risks and legal restrictions involved.
• EU and Other Jurisdictions: The document outlines the regulatory framework in the UK, France, Germany, and Belgium, highlighting the legal status and supervision of BNPP in these regions.

Additional Notes

• China Policy Preview: The document includes a preview of the Chinese government's economic development plan and budget, ahead of the 13th National People's Congress starting on 5 March.
• Market Outlook: The overall market outlook suggests a continued focus on USD trends and EM asset performance, with a particular emphasis on structural reforms in Brazil and inflation management in Poland.

This summary provides a concise overview of the key market insights, regional forecasts, and legal disclosures contained in the original document.