Multi-asset Macro/Emerging Markets Strategist

Virgil Fernandez Esguerra

Thematic (Sector/Industry)

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<p><strong>Executive summary</strong>: Our guide to this week’s global macro risk events and trading opportunities. </p>
<ul>
<li>
<strong>Trade ideas</strong>: We position for a policy-driven RMB depreciation by going long SGD-CNH. We take profit on long VIX but stay short 10-year USTs. We add long AUD-NZD, short Indian equities, long EUR-GBP to our watchlist. We may short the Philippine peso if the BSP keeps rates on hold.</li>
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<strong>Monday</strong>: Composite PMIs, Turkey CPI, Indonesia GDP and the Korea High Court's ruling on Samsung heir Jay Y. Lee</li>
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<strong>Tuesday</strong>…</li>
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Executive summary: Our guide to this week’s global macro risk events and trading opportunities. 


Trade ideas: We position for a policy-driven RMB depreciation by going long SGD-CNH. We take profit on long VIX but stay short 10-year USTs. We add long AUD-NZD, short Indian equities, long EUR-GBP to our watchlist. We may short the Philippine peso if the BSP keeps rates on hold.

Monday: Composite PMIs, Turkey CPI, Indonesia GDP and the Korea High Court's ruling on Samsung heir Jay Y. Lee

Tuesday…



Week Ahead in Global Macro: US Stopgap #5, UST Auctions, RBA, RBNZ, BOE, China Trade, Phils. BSP

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

Riedel provides equity research and analysis to leading financial organizations. By becoming members of a region (Asia, Latin America, Emerging Europe or Global), organizations have access to an integrated set of services including:

Regular company coverage reports
Up-to-date investment decision advice (buy, hold, sell)
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Customized company reports and unlimited on-line access to the program's services.

Riedel provides research coverage of companies across the full range of market capitalization. Experienced research professionals in each market develop company reports and analysis as well as earnings models and projections. Ratings are Buy, Hold and Sell with a focus on compelling investment ideas - both long and short. Downloadable, dynamic earnings models are built to facilitate sensitivity analysis.

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<ul>
<li>RRG Global Macro Insights - China Downgrade Good for Markets - 300 Year Old Idea for a Canal Across Thailand May Actually Happen with China's Help</li>
<li>China: S&amp;P ratings cut was nothing new as it follows Moody’s in May and their own warning in June,  Beijing will keep markets strong.</li>
<li>India: Finance Minister hints at stimulus spending in 2017/18 with a focus on helping small companies hit by de-monetization and GST.</li>
<li>Thailand: A shipping canal across southern Thailand has been discussed since 1677…</li>
</ul>


RRG Global Macro Insights - China Downgrade Good for Markets - 300 Year Old Idea for a Canal Across Thailand May Actually Happen with China's Help
China: S&amp;P ratings cut was nothing new as it follows Moody’s in May and their own warning in June,  Beijing will keep markets strong.
India: Finance Minister hints at stimulus spending in 2017/18 with a focus on helping small companies hit by de-monetization and GST.
Thailand: A shipping canal across southern Thailand has been discussed since 1677…


China's Downgrade Good News for Investors - Watch the Third Round of NAFTA Talks for Mexico Outlook

<ul class="ul1">
<li class="li1"><span class="s2">Our proprietary corporate governance scoring system now covers over 1,755 Emerging Market companies including over 130 companies in Lat Am.</span></li>
<li class="li1"><span class="s2">This report includes all of the Latin America names currently under coverage.</span></li>
<li class="li1"><span class="s2">The companies with scores near or below 50/100 (the bad corporate governance companies) include a number of likely frauds.</span></li>
<li class="li1"><span class="s2">We note that the former CEO of Estácio Participações (one of the lowest scores here) was recently accused by the company of leaking emails that hurt the company.</span></li>
<li class="li1">…</li>
</ul>


Our proprietary corporate governance scoring system now covers over 1,755 Emerging Market companies including over 130 companies in Lat Am.
This report includes all of the Latin America names currently under coverage.
The companies with scores near or below 50/100 (the bad corporate governance companies) include a number of likely frauds.
We note that the former CEO of Estácio Participações (one of the lowest scores here) was recently accused by the company of leaking emails that hurt the company.
…


Corporate Governance in Latin America - The Good, The Bad and the Ugly

Emerging Markets Cross-Asset Strategist, Emvest Partners

Guillaume Coutant

Emerging Markets Cross-Asset Strategist

<h2>1.    Macro analysis :</h2><ul><li>Long term outlook is globally improving, but short-term indicators have deteriorated over the past months (inflation, industrial activity, domestic demand, exports prospects).</li><li>In the meantime, the Bank of Mexico conducted a deep hiking cycle until June 2017, raising its reference rate at 7.00% to contain inflation and follow the FED policy.</li><li>This situation will not be sustainable in the coming months, and will lead to a stabilizing currency, higher yields and a potential steepening curve.</li></ul><h2>2.    Trend analysis :</h2><ul><li>Signs of exhaustion on Mexican assets.</li><li>Peso is in a cloudy area, but has done most of its appreciation. Therefore, a complex configuration might take place.</li><li>The rate curve experienced a steepening shock that is not over.</li></ul><h2>3.    Mitigating factors :</h2><ul><li>The Peso remains well oriented with attractive carry and valuation for long term investors.</li><li>Global economy remains resilient, and any positive outcome on Mexico/US relationship will be positive and lead to lift the risks weighing on Mexico.</li></ul>

1.    Macro analysis :Long term outlook is globally improving, but short-term indicators have deteriorated over the past months (inflation, industrial activity, domestic demand, exports prospects).In the meantime, the Bank of Mexico conducted a deep hiking cycle until June 2017, raising its reference rate at 7.00% to contain inflation and follow the FED policy.This situation will not be sustainable in the coming months, and will lead to a stabilizing currency, higher yields and a potential steepening curve.2.    Trend analysis :Signs of exhaustion on Mexican assets.Peso is in a cloudy area, but has done most of its appreciation. Therefore, a complex configuration might take place.The rate curve experienced a steepening shock that is not over.3.    Mitigating factors :The Peso remains well oriented with attractive carry and valuation for long term investors.Global economy remains resilient, and any positive outcome on Mexico/US relationship will be positive and lead to lift the risks weighing on Mexico.

Rally Exhaustion on Mexican Peso and MXN Swaps

Mexico

The MSCI Mexico Index is a free-float weighted equity index.

MSCI Mexico Index (MXMX INDEX)

Week Ahead in Global Macro: US Stopgap #5, UST Auctions, RBA, RBNZ, BOE, China Trade, Phils. BSP

Executive summary: Our guide to this week’s global macro risk events and trading opportunities. Trade ideas: We position for a policy-driven...

Virgil Fernandez Esguerra

China's Downgrade Good News for Investors - Watch the Third Round of NAFTA Talks for Mexico Outlook

RRG Global Macro Insights - China Downgrade Good for Markets - 300 Year Old Idea for a Canal Across Thailand May Actually Happen with China's...

David Riedel

Corporate Governance in Latin America - The Good, The Bad and the Ugly

Our proprietary corporate governance scoring system now covers over 1,755 Emerging Market companies including over 130 companies in Lat Am. This...

David Riedel

Rally Exhaustion on Mexican Peso and MXN Swaps

1. Macro analysis : Long term outlook is globally improving, but short-term indicators have deteriorated over the past months (inflation,...

Guillaume Coutant