Domestic issues come back to.......>

EMERGING MARKETS: Domestic issues come back to bite EMFX

-PLN slumped against the EUR, re-approaching the lowest levels of the year as

market focus remains on the ongoing FX loans saga. There was particular weakness

in the domestic bank sector as the Polish supreme court opted for more

consumer-friendly guidance on the prospect of lawsuits against banks on CHF

priced mortgages. EUR/PLN bulls initially target 4.3975 ahead of 4.4142.

-ARS dropped further still as the Argentina - US yield spread widened to levels

not seen since 2005. Attention turns to the judgement of the IMF mission which

head to Buenos Aires today.

-Meanwhile, the ILS traded weaker, prompting the USD/ILS rate to test the 50-dma

at 3.5364 as the Israeli central bank kept rates unchanged at 0.25%, but dropped

their commitment to boosting rates further down the curve as a stronger currency

and deteriorating global trade conditions made such a move counter to their

inflation goals.

-Turkish trade balance, South African PPI and the minutes of the latest Mexican

central bank meeting are the calendar highlights Thursday.