Daily BriefsMacro

Macro: Brace for Upside Surprises in Asian Growth as Recovery in Global Demand Picks up Momentum and more

In today’s briefing:

  • Brace for Upside Surprises in Asian Growth as Recovery in Global Demand Picks up Momentum
  • India: Growth Narrative Risks Coming Undone
  • China Tests Biden: East & Southeast Asia Are the Main Arenas of Contestation
  • FX Dashboard: How Well Would a Euro Hedge Have Worked for EM?
  • Rates 10y Dashboard: LatAm Rates Lag Asia Even When Adjusted by Beta

Brace for Upside Surprises in Asian Growth as Recovery in Global Demand Picks up Momentum

By Manu Bhaskaran

  • Asian growth could see significant upside. Recent data show global demand for Asian exports firming. Massive investments by tech firms validate the view that tech demand will be powerfully boost Asian growth.
  • In China, export demand will offset domestic weakness.
  • New infection surges are hurting India and the Philippines. Thailand remains sickly. Robust exports and a likely upturn in investment will drive South Korea’s out-performance this year.

India: Growth Narrative Risks Coming Undone

By Nicholas Chia

  • A month ago, India was on track to register double-digits growth in FY22, aided by the much-vaunted claim that it has achieved herd immunity by design or by accident. That is now at risk.
  • What is clear is that India has not attained herd immunity, underscored by the soaring caseloads after bottoming out in early-February. Mutant strains and complacency could perhaps explain why cases started rising sharply, though there is still a lot to unpack about Covid-19.

China Tests Biden: East & Southeast Asia Are the Main Arenas of Contestation

By Manu Bhaskaran

  • China is testing Biden. Its intrusions into the air space and waters of Japan, Taiwan and the Philippines are designed to show up the US as a toothless tiger, unable to defend its allies.
  • But China may have miscalculated and the result is higher risk of tensions.

FX Dashboard: How Well Would a Euro Hedge Have Worked for EM?

By Gautam Jain, PhD, CFA

In this note, we evaluate whether hedging with the euro would have helped ameliorate losses from EM currencies over the past couple of months stemming from the spillover from rising US rates.

The attached file is a snapshot of EM currency market, which we produce daily, and where we seek to identify the leaders and laggards among currencies by comparing the performance of each to its history as well as to other currencies based on their respective betas to the broad market.


Rates 10y Dashboard: LatAm Rates Lag Asia Even When Adjusted by Beta

By Gautam Jain, PhD, CFA

In this note, we discuss the underperformance of 10y rates in Latin America versus Asia and make the case that if the volatility of US rates continues to drop, Latin American rates should outperform.

The attached file is a snapshot of EM 10y rates market, which we produce daily, and where we seek to identify the leaders and laggards among countries by comparing the performance of each to its history as well as to other countries based on their respective betas to the broad market.


Before it’s here, it’s on Smartkarma