November 12, 2019
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Markets were quiet awaiting new trade developments as the U.S.-China tariffs rollback remains uncertain. Investors will watch U.S. President Trump’s speech at the New York Economic Club closely today, in which trade talks with China may be addressed.
We expect ongoing easing in global uncertainties, and policy support to sustain flows into EMs, mainly those implementing ‘sound’ policies and with stable currencies. However, concerns over underlying vulnerabilities and the potential for further bouts of cross asset volatility will restrain a sharp recovery in EM inflows.
Repo Rates: Slight increase in average daily intervention to $86bn as Fed conducts small operation exercises on its desk to test its operational readiness. Fed Balance Sheet: Total assets reach $4.08tn, the highest amount since January 2019.
Markets were cautious amid lower prospects of a limited trade deal and thin volume due to Veterans Days in the U.S.
After a two-month pause, the Board of the Central Reserve Bank of Peru (BCRP) decided to cut the monetary policy rate by 25 basis points in November, from 2,50% to 2,25%.
November 8, 2019
Market Comment | Trade deal optimism spurs sovereign bonds yields and global equities
Markets’ risk-on mood intensified this week on the back of increasing U.S.-China trade deal optimism, although the uncertainty remains as the U.S. has not agreed to fully rollback tariffs. Strong services sector figures in the U.S., along with better-than-feared earnings also helped to improve market sentiment.
China’s statement that it has agreed with the U.S. to remove tariffs in stages renewed the risk-on mood, despite the gloomier Eurozone economic outlook.