巴黎银行-新兴市场-宏观策略-新兴市场贸易跟踪：第三季度出口增长放缓-20190718-7页_997kb

EM Trade Tracker Summary

Core Content

This document provides an analysis of Emerging Markets (EM) export growth trends in the second quarter of the year, highlighting the weakening performance and its potential implications for the broader economic outlook. The report is prepared by the Strategist and Economist teams of BNP Paribas and is intended for professional clients and relevant persons, with important disclaimers regarding the use of the information for investment purposes.

Key Messages

• EM Export Growth Weakens: EM export growth remained close to flat in Q2 at -0.4% y/y, little changed from Q1's -0.6% y/y.
• Slowing Chinese Demand: The decline in Chinese imports has been a major driver of weak export growth across several EMs.
• Regional Weakness: Export weakness was widespread across EM regions in Q2, with EM Asia and Latin America being particularly affected due to their reliance on Chinese demand.
• Q3 Outlook: The trend of weak export growth is expected to intensify in Q3, as indicated by recent high-frequency data.
• Trade and GDP Correlation: The weakening export data coincided with a slowdown in EM real GDP growth in Q1, suggesting a possible similar trend in Q2.

Main Views

• EMs Less Vulnerable to External Shocks: Despite weak export growth, EMs are structurally less vulnerable to external shocks due to lower interest rates in developed markets (DM), which makes the risk-reward ratio for EM investments more attractive.
• Focus on Local Currency Rates: The report emphasizes a significant allocation to local currency rates, particularly in BRL (Brazilian Real).
• China's Dominance in EM Exports: EM exports tend to follow Chinese import trends more closely than US import trends, as illustrated in the data and figures.

Key Data Points

• US Import Growth: US import growth increased to 2% y/y in March-May, up from 1.5% y/y in Q1.
• Chinese Import Growth: Chinese imports declined by 4% y/y in Q2, similar to Q1, indicating a continued slowdown in demand.
• EM Export Performance by Region:
  • EM Asia: Exports declined significantly, particularly in countries like Singapore.
  • CEEMEA: Exports also showed a contraction, despite some countries like Russia showing more resilience.
  • Latin America: Countries such as Chile and Argentina experienced sharp drops in export growth.
• Recent Export Weakness: In June, several EMs saw double-digit drops in export growth, including Chile and Singapore.

Additional Notes

• Methodology: The BNPP EM export growth tracker is an index derived from its correlation with EM export volume growth and is based on data from Bloomberg, IMF, World Bank, and BNP Paribas.
• Heat Map: A heat map is provided to illustrate the export performance of various EM countries over time, highlighting the significant decline in some markets.
• Legal and Regulatory Information: The document contains important legal disclaimers, including information about conflicts of interest, marketing communication status, and compliance with financial regulations such as MiFID II and the UK Financial Conduct Authority rules.

Conclusion

The report underscores the current challenges in EM export growth, primarily driven by the slowdown in Chinese demand. While EMs are relatively less vulnerable to external shocks, the weakening trade performance could have broader economic implications. The analysis suggests that the trend is likely to continue into Q3, with further declines expected in export growth across many EM regions.