25 Jul 2013
Flash: What has hanged in EM - BBH
FXstreet.com (London) - Marc Chandler, Global Head of Currency Strategy at the BBH Global Currency Strategy Team highlighted a few key matters in the emerging markets.
Key Quotes:
“Easing in Hungary will be deeper than previously expected. In this week’s meeting, the Hungarian central bank delivered the expected 25 bp cut, but it also issued an extraordinary statement with forward guidance suggesting that rate cuts could fall to as low as 3-3.5%”.
“India steps up interventions even more. The RBI imposed yet more restrictions on commercial banks' access to cash, thereby hoping to support the rupee. This comes on the back of rate hikes to the marginal standing facility and bank rate, tighter regulation on FX derivatives and restrictions on gold imports”.
“Expectations for a Chinese “mini-stimulus” are growing, but markets are not responding. This idea is often framed as seeing the leadership giving markets a put option on growth. We doubt this is exactly the case, but it’s what many market participants have taken away from Premier Li Keqiang’s comments that the government would not tolerate GDP growth sub 7.0%”.
Key Quotes:
“Easing in Hungary will be deeper than previously expected. In this week’s meeting, the Hungarian central bank delivered the expected 25 bp cut, but it also issued an extraordinary statement with forward guidance suggesting that rate cuts could fall to as low as 3-3.5%”.
“India steps up interventions even more. The RBI imposed yet more restrictions on commercial banks' access to cash, thereby hoping to support the rupee. This comes on the back of rate hikes to the marginal standing facility and bank rate, tighter regulation on FX derivatives and restrictions on gold imports”.
“Expectations for a Chinese “mini-stimulus” are growing, but markets are not responding. This idea is often framed as seeing the leadership giving markets a put option on growth. We doubt this is exactly the case, but it’s what many market participants have taken away from Premier Li Keqiang’s comments that the government would not tolerate GDP growth sub 7.0%”.