EM Macro and Strategy Focus

Economics Focus: In Asia, Bank Indonesia is likely to cut rates by 25bps while Bangko Sentral Ng Pilipinas (BSP) will remain on hold. EMEA rate decisions in South Africa (watch for inflation release), Turkey and Hungary (watch for CA and inflation report) are in focus. In LatAm, we expect the electoral authority in Venezuela to postpone the collection of signatures for a recall referendum until late October, closing the window for 2016 elections.

    Strategy Focus: We have turned more cautious on duration while we wait for clarity on DM policy. EM asset pricing has de-coupled from fundamentals and it now hinges on continued inflows - which requires volatility to settle. Structural economic, political, and financial bottlenecks prevent any extended departure from the search for yield, in our view.