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Summary – July 22

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EM BulletHomepagemarkets-real-timeBulletEmerging Market News
  • On Monday, Brazil’s bimonthly Treasury report will be released, although Finance Minister Haddad has already announced a BRL 15bn spending freeze from this year’s budget, ahead of the report’s publication. Meanwhile, the BCB will also publish its weekly Focus survey, while in Mexico May retail sales and economic activity will cross, followed by the latest Citi survey of economists. In the US, the schedule is quiet, with just the Chicago Fed National Activity Index on the docket - and no central bank speakers of note.
  • Global news:
    • US (MNI) – The withdrawal of President Biden from the election race, announced on 21 July, has seen a small shift in political betting markets. The seemingly likelihood (but not a guarantee) that Vice President Kamala Harris will be the Democratic party nominee has seen the implied probability for Republican nominee former President Donald Trump fall from 65.1% on 21 July prior to Biden's announcement to 62.5% at the time of writing.
    • CHINA (MNI Beijing) – China's Loan Prime Rate was cut by 10bp on Monday according to a PBoC statement, following the central bank's unexpected move to reduce the 7-day reverse repo rate by 10bp early this morning. The one-year LPR, based on the PBOC’s Medium-term Lending Facility rate and quotes submitted by 20 banks, was reduced to 3.35% from 3.45% and the five-year plus maturity was cut to 3.85% from 3.95%.
    • EU – Market bets on two more ECB interest-rate reductions this year aren’t “entirely misplaced,” but shouldn’t be taken as “a given or a baseline scenario,” according to Governing Council member Peter Kazimir. “We are on track to return to our target, but we are clearly not there yet,” the Slovak central bank governor said in an op-ed Monday, referring to consumer prices.
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  • On Monday, Brazil’s bimonthly Treasury report will be released, although Finance Minister Haddad has already announced a BRL 15bn spending freeze from this year’s budget, ahead of the report’s publication. Meanwhile, the BCB will also publish its weekly Focus survey, while in Mexico May retail sales and economic activity will cross, followed by the latest Citi survey of economists. In the US, the schedule is quiet, with just the Chicago Fed National Activity Index on the docket - and no central bank speakers of note.
  • Global news:
    • US (MNI) – The withdrawal of President Biden from the election race, announced on 21 July, has seen a small shift in political betting markets. The seemingly likelihood (but not a guarantee) that Vice President Kamala Harris will be the Democratic party nominee has seen the implied probability for Republican nominee former President Donald Trump fall from 65.1% on 21 July prior to Biden's announcement to 62.5% at the time of writing.
    • CHINA (MNI Beijing) – China's Loan Prime Rate was cut by 10bp on Monday according to a PBoC statement, following the central bank's unexpected move to reduce the 7-day reverse repo rate by 10bp early this morning. The one-year LPR, based on the PBOC’s Medium-term Lending Facility rate and quotes submitted by 20 banks, was reduced to 3.35% from 3.45% and the five-year plus maturity was cut to 3.85% from 3.95%.
    • EU – Market bets on two more ECB interest-rate reductions this year aren’t “entirely misplaced,” but shouldn’t be taken as “a given or a baseline scenario,” according to Governing Council member Peter Kazimir. “We are on track to return to our target, but we are clearly not there yet,” the Slovak central bank governor said in an op-ed Monday, referring to consumer prices.