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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EMERGING MARKETS
- Inflation continued to surprise positively in June in a lot of EM economies, with the Citi EM inflation surprise reaching a new high of 23.87 last month, its highest level since September 2008.
Source: Bloomberg/MNI
- China remains the place where inflation has accelerated the most, with PPI up 8.5ppt since the start of the year, followed by Brazil (+3.8ppt), Hungary (+2.6ppt) and Turkey (2.6ppt).
- As a result, some EM central banks have already started a tightening cycle to curb the inflationary pressures.
- First, it was the CBB, CBRT and CRB, which have already tightened by 225bps, 200bps and 125bps since January, followed last month by NBH (+30bps), CNB (+25bps) and Banxico (+25bps).
- Surprisingly, the NBP plans to remain accommodative despite CPI inflation standing significant above the 3.5% upper tolerance band, as policymakers are still concerned over the rising uncertainty due to the Delta variant.
- It will be interesting to see how SARB will update its policy outlook in the medium term. Inflationary pressures (which have been rising since the start of the year), could continue to accelerate in the coming weeks if the ZAR depreciates significantly due to the Zuma riots. At the same time, growth expectations could start to fade and the Covid uncertainty remains elevated.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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