Emerging Markets Update

Below is a selection of key financial market stories published in Business Monitor Online over the past week.

Global FX Strategy

Our overriding FX view is for a stronger US dollar over the long term, against a broad trade-weighted basket. A break of US$1.38/EUR would suggest a leg higher for the euro versus the dollar, but at that stage we would expect increasing ECB easing, eventually bringing it lower. For the time being, we maintain our EUR forecast averages at US$1.31/EUR and US$1.25/EUR for 2014 and 2015 respectively, implying euro weakness later in 2014 and beyond. Elsewhere, we have a negative outlook on a wide range of emerging market currencies, including the Chinese yuan.

Vietnam Equity Strategy: Bullish Medium Term

While we foresee a consolidation in Vietnamese equities in the near term, we remain bullish, as macroeconomic fundamentals and technical signals appear to be aligned.

Argentine Peso: Gradual Weakening To Resume

The Argentine peso has stabilised for now, but we expect the central bank to resume its weakening in the coming months, with high risks of another currency devaluation.

Emerging Europe Equities: Neutral Outlook, Bearish Hungary And Romania

Hungarian financial markets will remain vulnerable to the Ukrainian crisis. The BUX equity index will decline on Ukraine’s weakening economy, and political risk will hurt the forint.

Africa: Regional Equity Strategy

Political risks are rising for many Sub-Saharan African equity markets, especially in Zambia and Zimbabwe. Nigeria's key index has remained stable, suggesting underlying strength.

 

This Week's Trivia Question

Last week's trivia questions were prompted by current events in Ukraine: 1) When did the last survivor of the Crimean War (1853-1856) die? (Hint: It was surprisingly recently, but there's a twist) And, 2) In which country, very far from Ukraine, is there a self-styled revolutionary leader who shares the surname of Ukraine's recently released former prime minister? The answer to the first part is 2004, the last survivor being a tortoise that was a ship's mascot during the conflict. The answer to the second part is Colombia; the leader of the Revolutionary Armed Forces of Colombia (FARC), Timoleon Jimenez, uses the nom de guerre 'Timochenko', apparently in recognition of former Soviet Marshal Semyon Timoshenko. The surname is shared by former Ukrainian premier Yulia Tymoshenko.

For this week's question, we are returning to the world of film. Our question is as follows: which actor appeared in roles that involved, in separate films, a South American archaeological expedition in the 1930s, domestic life in revolutionary Iran in the 1980s, battling against a major superhero in the 2000s, a conspiracy involving the Vatican in the late 2000s, and another foray into Iran in 2010? (Hint: He's not a big name actor, but is evidently versatile.)

This blog is tagged to:
Sector: Country Risk, Financial Markets
Geography: Africa, Niger, Zambia, Zimbabwe, Asia, Vietnam, Europe, Hungary, Romania, Latin America, Argentina
Tags: Emerging Markets, dollar, euro, Argentine peso, Vietnam, Hungary, Zambia, equities

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