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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
- In the past few months, we have seen that inflationary pressures have started to intensify in the EM market (and in DM), with the Citi EM inflation surprise index surging to a 13-year high.
- While some EM central banks have already started a tightening cycle to curb inflationary pressures (i.e. Turkey, Brazil and Russia), or are preparing for a tightening cycle in H2 (i.e. Czech republic), other central banks aim to keep their policy rate steady to maintain financial conditions as loose as possible to stimulate the economic recovery.
- We also saw that some central banks such as Mexico or Indonesia have even cut their policy rate this year.
- Even though central bankers have originally mentioned that they expect the spike in inflation to be 'temporary' and that inflationary pressures should ease in the second half of this year, a rising number of policymakers have started to express their concern over inflation risks in recent weeks.
- The temporary 'financial repression' could eventually start to weigh on some EM currencies in the near to medium term.
- The chart below ranks the EM economies based on the current rate of inflation (CPI) and also looks at the changes in ppt since January; we can notice a significant increase in inflation in China (PPI), Thailand, Hungary, Mexico, Brazil and Turkey.
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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