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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
- To the exception of Turkey, yield curves have flattened in the EM world in the past month.
- On one hand, the rise in inflationary pressures has led to aggressive hikes from EM central banks, which have not hesitated to raise their policy rate more than what market expected.
- On the other hand, the rise in uncertainty over the economic outlook may limit the downside risk on LT bonds, therefore leading to a sharp flattening of the yield curves.
- The 2Y10Y yield curve inverted in Brazil, Czech Republic, Russia and Poland, which have increased recession risks as yield curve tends to strongly lead the business cycle by 6 months.
- South Africa currently has the steepest yield curve among the EM world (+441bps) as SARB has kept interest rates steady at 3.5% despite the surge in inflation (strong momentum on risk-on ZAR in the past 15 months has nicely 'helped' the SARB).
- The chart below shows the current and 1 month lagged 2Y10Y yield curves for the major EM economies.
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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