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- Hot spots in emerging markets this week: Brazil, Mexico, India
Hot spots in emerging markets this week: Brazil, Mexico, India
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Loading...It will be a short week for some emerging markets, where stocks are poised to post a fifth straight month of gains.
Appetite for developing assets this week may hinge on how the dollar reacts to jobs, personal spending and manufacturing data expected out of the U.S. Meanwhile, interest rate decisions are expected out of Brazil, Israel, Bulgaria, Kenya, Guatemala, and the Dominican Republic, while Mexico’s central bank will release monetary policy minutes.
Markets in the U.S. and U.K. are closed on Monday for national holidays. Those in China and Taiwan will close for two days through Tuesday for the Dragon Boat Festival holidays.
Brazil
Investors in Brazil will be paying close attention to the central bank meeting on Wednesday. Traders had initially priced in rate cuts as high as 125 basis points, but the fresh political crisis has prompted them to curb their expectations. Brazil’s credit outlook was cut to negative by Moody’s Investors Service, which said the scandal ensnaring President Michel Temer poses a rising threat to the nation’s economic recovery. Gross domestic product probably expanded 1 percent in the three months ending March, which would come as a relief after eight consecutive quarters of economic contractions.
Mexico
The peso’s volatility will probably rise ahead of local elections in the State of Mexico on June 4. Banxico’s governor Agustin Carstens is due to speak as the central bank releases its quarterly inflation report on Wednesday, with traders keen to hear about an investigation into possible price manipulation in Mexico’s bond market. Minutes from the last central bank meeting will be released the following day.
India
Investors will be watching to see if India can maintain a growth rate that’s only dipped below 7 percent in one of the seven quarters through the end of last year. They’ll also be on the lookout for fresh tension with Pakistan.
Source: Bloomberg Pro Terminal
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