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Macro

22 Feb 2019   Macro, Policy, Africa

Viscous Fiscus: In Pursuit of Reform, South Africa Takes One Step Forward, One Step Back

Markets have hung their hopes on the upcoming 2019 election and the avoidance of a blowout at troubled state-owned utility Eskom as potential reasons for optimism in South Africa, but without a monumental shift in mindset, or an end to the factionalism that has increasingly defined the executive and the ANC, both reform and growth will remain elusive.

The Latin American Political Landscape in 2019: The Good, The Bad and The Ugly

Americas Market Intelligence’s John Price takes stock of last year’s hectic election cycle in Latin America and looks more closely at the fortunes of some of the region’s key markets: Brazil, Mexico and Venezuela.

Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead

Since their post-FOMC peak on January 31, both MSCI EM and MSCI EM FX have fallen. Virtually every EM currency has given up their post-FOMC gains, the lone exception being MYR (+0.2%). The worst performers have been ZAR (-6%), ARS (-3.3%), and TRY (-2.3%). This supports our belief that the liquidity and low US rates story is not enough to sustain the EM rally on its own. What’s still missing is an improved global outlook and we certainly didn’t get that with the US retail sales data.

Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead

EM FX ended the week mixed but gave up much of their post-FOMC gains as the week progressed. MYR, PHP, and MXN were the best EM performers for the week and posted small gains. ZAR, BRL, and ARS were the worst in EM, dropping nearly 2% against USD. US-China trade talks and Chinese data are likely to set the tone for EM this week. Reports that the US government may shut down again should weigh on risk assets.

Deadly Pipeline Blast Adds Fire to Mexico’s Fuel Crisis

The recent explosion at an oil pipeline in Tlahuelilpan, Central-Eastern Mexico, took the lives of 114 people and dozens more were left with severe injuries. The blast brought Mexico’s ailing oil and gas infrastructure back into focus just as the new president sets on a path to revitalise the industry by undoing some of his predecessor’s reforms to liberalise it. But will he succeed?

Uncertain Global Outlook Highlights GCC Debt Opportunity

As investors around the world brace for continued uncertainty in 2019 that will test the steeliest of nerves, the outlook for debt markets in the Gulf Co-operation Council (GCC) region is a much brighter one, with the potential for strong risk adjusted returns.

Investec Targeting Senior Private and Illiquid Credit in South Africa When Sentiment Sours

The long-term investment potential in South Africa and the continent as a whole remains vast, but African fixed-income remains vulnerable to global factors, which forces investors to limit their exposure to asset classes that can withstand tumultuous periods, says Simon Howie, Co-Head of SA and Africa Fixed Income at Investec Asset Management, in an interview with Bonds & Loans.

BBH: EM Preview for the Week Ahead

EM FX ended the week on a soft note as the dollar remains resilient. Very weak EM PMI readings so far in January are very concerning and underscore why we remain negative on EM despite the Fed capitulating to the market and tilting more dovish. Firmer currencies should allow EM central banks that meet this week to keep rates steady.

Eurasia Group: Balance Between Diversification and Fiscal Consolidation Key for Southern Africa

Sub-Saharan Africa has progressed in strides over the past two decades, but rapid debt accumulation, political instability and impact of global market volatility has led to souring near-term sentiment on the region. Bonds & Loans discussed these and other topics with Darias Jonker, Director for Southern Africa at the Eurasia Group.

After a Tough 2018, Turkey Sees a “Market of Windows” in 2019

It has been a patchy year for Turkey – and for EM fixed-income more broadly – with both macroeconomic and geopolitical factors weighing on growth and market sentiment in the first half last year. But the last few months of 2018 have seen a quiet recovery take place, and while no one is expecting an easy ride in 2019, conversations at an exclusive Breakfast Briefing hosted by HSBC and Bonds & Loans at this year’s Bonds, Loans & Sukuk Turkey Conference in November suggest that windows of opportunity will present themselves to Turkish banks and borrowers.

 

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