20171205-法国巴黎银行-_EM_TODAY_8页_253kb

EM STRATEGY DAILY SUMMARY - 05 December 2017

Core Content Overview

This document is a daily strategy report from BNP Paribas, focusing on Emerging Markets (EM) and Latin America (Latam) currency and interest rate strategies. It provides insights on political developments, economic indicators, and market outlooks for several key regions, including South Africa, Turkey, Poland, and Egypt. Additionally, it includes legal notices and regulatory disclosures for various jurisdictions.

Key Regions and Analysis

South Africa

• ANC Leadership Election: The last Provincial General Councils have announced their nominations for the ANC leadership. Cyril Ramaphosa has 1,867 nominations, while Nkosazana Dlamini-Zuma has 1,312.
• Elective Conference: The race is considered close, as branch nominations do not always reflect actual votes.
• Economic Data: Q3 GDP is expected to show a slowdown to 0.5% y/y. The negative output gap is likely to persist.
• Currency Outlook:
  • 1-month ZAR returns have climbed to +5%, a rare event that historically has shown mean reversion.
  • The USDZAR trade's stop-loss has been extended to 13.45.
  • 2-week volatility remains elevated due to uncertainty around the ANC outcome.
  • Potential USD longs may be rebuilt if the market reacts to the results.

Turkey

• USD vs. TRY Squeeze: The long USD squeeze continues, with 1-month returns turning weakly positive.
• 1-week Returns: Positive but still below the critical +4% level that historically breaks bearish trends.
• Recommendation:
  • Maintain the 3x6 cross-currency FRA position.
  • Hold the long USDTRY position initiated at 3.85 two weeks ago.

Poland

• MPC Meeting: No change to policy stance is expected.
• Inflation Pressures: Despite evidence of underlying inflation, the CB governor is likely to remain dovish.
• Zloty Outlook: Policy tightening is unlikely unless the zloty weakens sharply.
• EURPLN: Expected to remain range-bound, with no rate hikes anticipated before H2 2018.

Egypt

• PMI Data: November PMI rose to 50.7, the first time in two years exceeding the 50 threshold, indicating economic expansion.
• Net International Reserves: Remained stable at c.USD37bn in November.

Strategy Recommendations

• South Africa: Monitor the ANC elective conference outcome for potential market shifts.
• Turkey: Watch for the possibility of reaching the +4% weekly return threshold, which could signal a trend reversal.
• Poland: No near-term rate hikes expected; focus on zloty weakness as a trigger for policy change.

Contact Information

Legal and Regulatory Notices

• This document is non-independent research and is a marketing communication.
• It does not constitute investment research and is not subject to the independence requirements under MiFID.
• BNP Paribas may have financial interests in the mentioned issuers, including positions in their securities, derivatives, or acting as an advisor or underwriter.
• The document may include simulated performance data based on back-testing and is not guaranteed to reflect actual market conditions.
• Confidentiality: The information is provided on a strictly confidential basis and cannot be copied or distributed without prior consent.
• Disclaimer: BNP Paribas disclaims all liability for the accuracy, completeness, or use of the information contained in this document.

Important Disclosures

• Options: Complex instruments with high risk, only suitable for sophisticated investors.
• ETFs: May involve tracking error, currency, and geopolitical risks. BNP Paribas may have conflicts of interest due to advisory or market-making roles.
• Securities: Some may be restricted and only available to Qualified Institutional Buyers (QIB) or non-US persons under Regulation S.
• Jurisdictional Compliance: The document is subject to legal and regulatory requirements in the UK, France, Germany, Belgium, Italy, Netherlands, and Portugal. It is intended for Professional Clients and Eligible Counterparties only.

Summary of Key Points

• Political uncertainty in South Africa may impact currency and market sentiment.
• Turkey's USDTRY squeeze is ongoing, with limited positive returns so far.
• Poland's central bank is expected to maintain a dovish stance.
• Egypt's economy shows signs of expansion with stable reserves.
• Market volatility and uncertainty remain key factors influencing trading strategies.
• Strategy recommendations include maintaining USDTRY longs and extending stop-loss levels.
• Legal and compliance notices emphasize the non-investment research nature and potential conflicts of interest.