Mizuho Dealer's View EMEA emerging currencies - 04 May, 2021
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Mizuho Dealer's View
EMEA emerging currencies
04 May, 2021
Mizuho Bank. Ltd.
European Treasury Department, London
Mizuho Bank Europe NV (Amsterdam)
AO Mizuho Bank (Moscow)
TEL: +44 (0) 20 7786 2500
Email: fx@mhcb.co.ukContents and Contributors
04 May, 2021 edition of Mizuho Dealer's View EMEA emerging currencies
Page
1. Polish Zloty 3 This week's movement against USD
Eri Kimbara, Amsterdam ( 23 Apr - 30 Apr )
2. Czech Koruna 4
Claire Marne, Amsterdam INR
3. Hungarian Forint 5
TRY
Matthias Paschetag, Dusseldorf
4. Romanian Leu 6 THB
Emiko Sato Noordman, Dusseldorf
5. Norwegian Krone 7 BRL
Jun Iijima, Paris
CNH
6. Swedish Krona 8
Jun Iijima, Paris HUF
7. Russian Ruble 9
Ekaterina Sheblova , Moscow RUB
8. South African Rand 10
NOK
Joseph McElhill, London
9. Chinese Yuan, Renminbi (CNH) 11 RON
Colin Asher, London
10. Thailand Baht 12 PLN
Saba Zafar, London
CZK
11. Brazilian Real 13
Fumihiko Kanda, London SEK
12. Mexican Peso 14
Colin Asher, London ZAR
13. Indian Rupee 15
MXN
Joseph McElhill, London
14. Turkish Lira 16 -3.00% -2.00% -1.00% 0.00% 1.00% 2.00%
Colin Asher, London
Source: Bloomberg
Page 2Polish Zloty
GDP YoY : -2.8% Unemployment rate : 3.2% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 2.8% Curr. Acct. % of GDP : 2.5% Eri Kimbara, Amsterdam
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
Last week the biggest news in Poland was the cusumer prices released USD/PLN (LHS) EUR/PLN (RHS)
3.9 4.6
on last Friday. It rose 4.3% y/y in April against the forecast 3.9% mainly
3.88 4.59
due to surging global fuel prices. Yield of Polish government's 10-year 4.58
3.86
notes hit their highest level since March 2020, although the central bank 4.57
3.84
bought 3 bio zloty of bond as a part of QE. The news did not have much 4.56
impact on Polish currency and it has moved within the range around 4.57 3.82
4.55
level. 3.8
4.54
3.78
4.53
3.76
4.52
3.74 4.51
3.72 4.5
3.7 4.49
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
PLN 10 year bond yeild (LHS) WIG20 Index (RHS)
1.75 2060
Against US Dollars : 3.750 - 3.810 3.780 3.792
1.7
Against Euro : 4.540 - 4.590 4.565 4.557 2040
Policy meeting is scheduled on Wednesday. Most economists have 1.65
2020
predicted next interest hike would be in late 2020, however some started 1.6
2000
looking it might come early given recent inflation. Governor Adam 1.55
Grapinski kept mentioning that inflation will gradually slow to 2.5% mid- 1980
1.5
point of tolerance range. Poland has announced a gradual lifting of 1960
lockdown in May. PLN is expected to move within range. 1.45
1940
1.4
1.35 1920
1.3 1900
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 3Czech Koruna
GDP YoY : -4.7% Unemployment rate : 3% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 2.6% Curr. Acct. % of GDP : 3.6% Claire Marne, Amsterdam
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
The Czech confidence has improved in April, as households are more USD/CZK (LHS) EUR/CZK (RHS)
22.2 26.05
optimistic about the economic recovery as well as the pandemic situation
thanks to the vaccination progress. The business confidence is also 22
26
recovering with expectations of loosening Covid restrictions in coming 3 25.95
months, showing a positive effect. The Czech economy has been impacted 21.8
25.9
by the winter lockdown and tight restrictions in the 1st quarter of the year.
GDP fell by 0.3% QoQ but still figures are better than market expected with a 21.6 25.85
positive impact from government spending. 25.8
21.4
25.75
21.2
25.7
21 25.65
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
CZK 10 year bond yeild (LHS) PX Index (RHS)
2 1110
Against US Dollars : 21.30 21.70 21.500 21.524
Against Euro : 25.80 26.00 25.900 25.874 1.95 1105
The main focus this week is CNB meeting on 6 May. Even if the Central 1.9 1100
Bank is expected to remain on hold this quarter at 0.25%, may be the rate
hike debate could start earlier than previously indicated. CNB is expected to 1.85 1095
be the 1st Central Bank in Europe to start its hiking cycle in August. An 1.8 1090
improvement is also expected in March retail sales.
1.75 1085
1.7 1080
1.65 1075
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 4Hungarian Forint
GDP YoY : -3.6% Unemployment rate : 4.2% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 2.8% Curr. Acct. % of GDP : 0.1% Matthias Paschetag, Dusseldorf
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
During the last week, HUF strengthened ag USD (+0.8%) and ag EUR USD/HUF (LHS) EUR/HUF (RHS)
306 366
(+1.0%) during last week.
Tuesday, rate decision was unchanged as expected and HUF did not move 304 364
much early in the week.
302 362
Wednesday, the March unemployment rate was reported unchanged (4.5%)
from Feb, and better than expected (4.7%). Hungary's central bank chief 300 360
and Viktor Orban ally Gyorgy Matolcsy took the rare step of calling on the
298 358
cabinet to cut the budget deficit faster in 2022, an election year. The
government should plan a deficit of about 3% next year instead of 5.9% of 296 356
GDP. HUF strengthened.
294 354
292 352
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close) (%) HUF 10 year bond yeild (LHS) BUX Index (RHS)
2.8 45000
Against US Dollars : 294.00 - 304.00 299.00 299.62
Against Euro : 356.00 - 364.00 360.00 360.08 2.75
44500
Most likely, HUF will still react to more general market factors and corona 44000
news trading with elevated volatility levels. 2.7
43500
2.65 43000
Major economic news
42500
- Mon: Manufacturing PMI (Apr) 2.6
- Thu: industrial production (March) 42000
2.55
41500
2.5 41000
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 5Romanian Leu
GDP YoY : -1.4% Unemployment rate : 5.1% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 2.2% Curr. Acct. % of GDP : -5.3% Emiko Sato Noordman, Dusseldorf
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
RON touched a new record low in a new range against EUR and moved USD/RON (LHS) EUR/RON (RHS)
4.18 4.935
directionless against USD last week.
RON started around 4.9200 and marked a new record low of 4.9300 on 4.16
4.93
Tuesday. On Thursday RON recovered to a level under 4.9200 but it was 4.14
short-lived and RON spent most of the last week between 4.9200 and 4.12 4.925
4.9300. Against USD RON opened around 4.0628 and traded mostly 4.1
between 4.0700 and 4.0850 until Wednesday. After FOMC delivered no 4.92
4.08
sign of tapering and USD sold against major currencies, RON surged to a 8-
4.06 4.915
week high of 4.0528 on Thursday. However, on Friday, RON quickly
retreated to a level above 4.0900. 4.04
4.91
4.02
4 4.905
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
RON 10 year bond yeild (LHS) BET Index (RHS)
3.15 11700
Against US Dollars : 4.03 - 4.13 4.08 4.10
11600
Against Euro : 4.91 - 4.94 4.93 4.93
3.1 11500
RON is likely to remain in a range against EUR but firm against USD this
week. Romania has revised up this year's growth forecast from 4.3% to 5%. 11400
3.05
IMF acknowledges that even 6% growth should be possible. On the other 11300
hand, the country posted surprisingly less fiscal deficit in Q1, i.e. 1.3% of 11200
3
GDP, thanks to the delayed tax revenues which were postponed as one of 11100
the government's support measures. Higher growth would be fine for 11000
2.95
Romania to reduce its fiscal deficit and thus improve the rating. For a longer-
10900
term it is also crucial if Romania seriously plans to adopt Euro.
2.9 10800
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 6Norwegian Krone
GDP YoY : -0.6% Unemployment rate : 5.2% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 1.3% Curr. Acct. % of GDP : 1.9% Jun Iijima, Paris
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
NOK was trading around 8.3084 against USD, 10.0373 against EUR at the USD/NOK (LHS) EUR/NOK (RHS)
8.55 10.2
start of last week. On 30 Apr, Norges Bank daily FX purchases was kept at
8.5
the same level for NOK 1.8 bn a day in May and unemployment rate was 10.15
8.45
published on the same day, which was slightly better than the market 10.1
survey. Actual, 4.0% vs 4.1% (survey), 4.2% (previous month). 8.4
8.35 10.05
8.3 10
8.25 9.95
8.2
9.9
8.15
8.1 9.85
8.05 9.8
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
.
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close) (%)
NOK 10 year bond yeild (LHS) OSEBX Index (RHS)
1.54 1100
Against US Dollars : 8.12 - 8.48 8.30 8.32
1.52
Against Euro : 9.88 - 10.12 10.00 10.00 1090
1.5
This week in Norway, on 06 May, Industrial Production data for March and 1.48 1080
the NCB will announce its monetary policy at 10:00 am CET, which is 1.46
expected to be kept at 0.00% and 0.25% hike in late 3Q or early 4Q 2021. 1.44 1070
1.42 1060
Next Norges Bank's M.P. Announcement: 06 May 2021 1.4
Next ECB Monetary Policy Announcement: 10 Jun 2021 1.38 1050
Next US Fed Monetary Policy Announcement: 16 Jun 2021 1.36
1040
1.34
1.32 1030
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 7Swedish Krona
GDP YoY : -2.2% Unemployment rate : 7.9% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 0.3% Curr. Acct. % of GDP : 5.2% Jun Iijima, Paris
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
SEK started around 8.3860 and 10.1432 against USD and EUR at the USD/SEK (LHS) EUR/SEK (RHS)
8.8 10.3
beginning of last week. On 27 Apr, as expected in the markets, Riksbank
announced that it would keep its policy rate as it is and the same amount 8.7 10.25
(SEK 700 bn) of asset purchase for 3Q to support the economy. On top of
this, it mentioned that an increase in inflation would not trigger the rate 8.6 10.2
hikes.
8.5 10.15
8.4 10.1
8.3 10.05
8.2 10
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close) (%) SEK 10 year bond yeild (LHS) OMX Index (RHS)
0.45 2300
Against US Dollars : 8.28 - 8.60 8.44 8.46
0.4
Against Euro : 10.02 - 10.28 10.15 10.17 2280
This week in Sweden, on 05 May, Swedbank/Silf PMI services, composite 0.35
2260
data for April and the industrial orders data for March are to be published. 0.3
0.25 2240
Next ECB Monetary Policy Announcement: 10 Jun 2021 0.2 2220
Next US Fed Monetary Policy Announcement: 16 Jun 2021 0.15
Next Riksbank's Policy Announcement: 01 Jul 2021 2200
0.1
2180
0.05
0 2160
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 8Russian Ruble
GDP YoY : -3.4% Unemployment rate : 6.1% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 4.4% Curr. Acct. % of GDP : 2.7% Ekaterina Sheblova , Moscow
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
The previous week was generally calm for the Ruble. Thanks to geopolitical 78
USD/RUB (LHS) EUR/RUB (RHS)
93
rest, global USD weakness and exporters selling proceeds in foreign 77.5
92.5
currencies it managed to strengthen to 74.20 against USD but on Friday 77
with the end of tax payments and along with the closure of RUB positions 76.5 92
before the May holiday season the USD/RUB recovered to 75.00. 76 91.5
75.5
91
75
74.5 90.5
74 90
73.5
89.5
73
72.5 89
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
RUB 10 year bond yeild (LHS) RTSI$ Index (RHS)
7.4 1540
Against US Dollars : 74.00 - 76.00 75.00 75.21
1520
Against Euro : 89.00 - 92.00 90.50 90.46 7.3
1500
This business week starts on Tuesday in Russia due to the first May 7.2
holidays. We expect slow trading around 75.00 given that 4-7 May were de- 1480
jure declared non-working days too (many businesses will however work). 7.1 1460
7 1440
1420
6.9
1400
6.8
1380
6.7 1360
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 9South African Rand
GDP YoY : -4.1% Unemployment rate : 32.5% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 3.2% Curr. Acct. % of GDP : 2% Joseph McElhill, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
As expected the rand failed to gain any more against the USD last week, as USD/ZAR (LHS) EUR/ZAR (RHS)
14.7 17.5
heading into the oversold section of its RSI provoked closing of USD short
positions. The pair still sit firmly below 50/100/200 DMAs, with next line of 14.6 17.4
resistance set at 14.50. The currency did outperform in line with EM peers 14.5 17.3
initially, eyeing 14.15, but lost gains after CEO of FED Dallas was reported
14.4 17.2
to have said that it is 'appropriate to begin talking about tapering bond
buying soon', which caused a buy-back of USD across the board, sending 14.3 17.1
USDZAR to above 14.50 by close on Friday. 14.2 17
14.1 16.9
14 16.8
13.9 16.7
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close) (%)
ZAR 10 year bond yeild (LHS) TOP40 Index (RHS)
9.6 63500
Against US Dollars : 14.15 - 14.79 14.47 14.50
Against Euro : 17.25 - 17.83 17.54 17.41 9.5 63000
The cost of an option to sell rand against the USD minus that of one to buy 9.4
62500
it in 1 month's time at 25 delta (1m 25 delta risk-reversal) has increased 9.3
62000
steadily over the past month, implying that options traders are positioning
9.2
themselves for USD appreciation against ZAR in the near future. There are 61500
no key data releases this week. 9.1
61000
9
60500
8.9
8.8 60000
8.7 59500
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 10Chinese Yuan, Renminbi (CNH)
GDP YoY : 6.5% Unemployment rate : 4.2% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 0.1% Curr. Acct. % of GDP : 1.8% Colin Asher, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
CNH rallied to a two-month high just above 6.46 against the backdrop of a 6.58
USD/CNH (LHS) EUR/CNH (RHS)
7.86
soft US dollar. The Fed retained its dovish stance at the April FOMC
6.56 7.84
meeting and EM Asian currencies continued to recover from the taper
tantrum in late Q1. There was also a relief from credit issues related to a 6.54 7.82
state-owned enterprise bad-asset management firm, after its repayment of 6.52 7.8
a maturing offshore bond. The disappointing China PMIs for April reflected 6.5 7.78
stalling growth momentum in coming months but the market impact on CNH 6.48 7.76
was largely muted
6.46 7.74
6.44 7.72
6.42 7.7
6.4 7.68
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
(%)
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close) CNH 10 year bond yeild (LHS) SHSZ300 Index (RHS)
3.24 5200
Against US Dollars : 6.45 - 6.52 6.49 6.47
5150
Against Euro : 7.78 7.90 7.84 7.78 3.22
The onshore RMB market will remain closed until 5 May, and thus CNH is 3.2
5100
set to be more driven by the greenback in the absence of CNY fixing 5050
guidance. Data during the week include Caxin PMIs and trade, as well as 3.18
5000
the Q1 current account balance. CNH is likely to be little changed vs USD 3.16
on the week. 4950
3.14
4900
3.12 4850
3.1 4800
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 11Thai Baht
GDP YoY : -4.2% Unemployment rate : 1.9% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : -0.4% Curr. Acct. % of GDP : 5.7% Saba Zafar, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
USD/THB fell as much as 0.2% last week driving Baht to its highest level 31.6 USD/THB (LHS) EUR/THB (RHS) 38.2
in two weeks as investors drove the inflows into bonds and equities. THB 38
31.5
removed some of its recent losses as emerging market currencies see less
37.8
pressure from the USD and a softer rate market. 31.4
37.6
31.3 37.4
31.2 37.2
37
31.1
36.8
31
36.6
30.9 36.4
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
(%)
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close) GVTL10YR Index (LHS) SET Index (RHS)
2 1600
Against US Dollars : 31.00 - 31.60 31.30 31.14
1590
Against Euro : 36.40 - 37.10 36.75 37.44 1.95
1580
Thailand's GDP has been revised down from 3.5% to a growth of only 1.5% 1.9
in 2021. Bank of Thailand is expected to leave its policy rate unchanged at 1570
its meeting on Wednesday as overall outlook of the contry has improved. 1.85 1560
On the bright side, March export for the country picked up dramatically. 1.8 1550
1540
1.75
1530
1.7
1520
1.65 1510
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 12Brazilian Real
GDP YoY : -1.1% Unemployment rate : 14.1% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 4.3% Curr. Acct. % of GDP : -0.7% Fumihiko Kanda, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
Previous week BRL was appreciated to 2-month high level vs USD. USD/BRL (LHS) EUR/BRL (RHS)
5.8 6.9
On Monday, weekly economist survey was released with a forecast that policy
rate at 2021-end revised to 5.50% from 5.25% then BRL was bought. On 5.7 6.8
Wednesday data showed consumer confidence in April was 9-month high level
and US Fed showed its dovish stance. Then BRL was bought to 2-month high 5.6 6.7
level of 5.33 vs USD on Thursday. BRL was sold back to 5.42 level toward 5.5 6.6
weekend.
5.4 6.5
5.3 6.4
5.2 6.3
5.1 6.2
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
BRL 10 year bond yield (LHS) IBOV Index
1100 122000
Against US Dollars : 5.20 - 5.80 5.50 5.44
Against Euro : 6.20 - 6.80 6.50 6.54 1090 121000
BRL would be subdued with global concern on COVID-19. 1080 120000
Market driver will be mainly virus-related (USD demand). Brazil leads COVID-19
case in Latin America area. In addition political/fiscal uncertainty cast further 1070 119000
uncertainty on BRL. Investors are keen to see how the government manage to
1060 118000
balance between stimulus and deficit. Though vaccination rollout is not on the
fast track, COVID-cases seems peak-out. That is a positive factor for BRL. 1050 117000
On Wednesday Selic rate decision is on focus. Market consensus is rate-hike by
1040 116000
75bps. Investors also watch if the statement implies another rate-hike.
1030 115000
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 13Mexican Peso
GDP YoY : -4.3% Unemployment rate : 4.3% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 3.5% Curr. Acct. % of GDP : 2.3% Colin Asher, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
It was a particularly bad week for MXN, with the downswing exaccerbated USD/MXN (LHS) EUR/MXN (RHS)
20.4 24.5
by comments on Friday from the Dallas Fed's Kaplan about it being time to
24.4
talk about tapering - a sharp contrast to his boss Powell's comments on 20.3
Wednesday. It pushed UST yields higher and supported the US dollar late 20.2 24.3
in the week. The MXN weakness came despite better than expected Q1 20.1
24.2
Mexican GDP and the announcemnt that GM plans to invest over $1bn in 20
24.1
Mexico to produce electric vehicles. Political concerns were cited as a 24
19.9
reson for MXN underpreformance, as President AMLO pushes through a 23.9
series of interventionist reforms. 19.8
23.8
19.7 23.7
19.6 23.6
19.5 23.5
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%) MXN 10 year bond yeild (LHS) MEXBOL Index (RHS)
8.2 49500
Against US Dollars : 20.00 20.50 20.25 20.25
8
Against Euro : 24.20 - 24.80 24.50 24.34 7.8
49000
It will be a busy week for data with the manufacturing PMI, the CPI, vehcile 7.6 48500
exporst and production as well as consumer confidence all due. In addition 7.4
48000
domestic politics will remain a focus ahead of the 6 June mid-term as AMLO 7.2
looks to cement control. MXN may be a little soft if politics remains the 7
47500
primary investor focus 6.8 47000
6.6
46500
6.4
6.2 46000
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 14Indian Rupee
GDP YoY : 0.4% Unemployment rate : 1.3% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 6.4% Curr. Acct. % of GDP : Joseph McElhill, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
INR began last week positively as the stockmarket rebounded and the USD/INR (LHS) EUR/INR (RHS)
75.5 91
currency snapped back for the first day in five, among an overall weaker
dollar. Market consensus is that any cool off on the peak of covid-19 75 90
infection cases should help INR to join other stronger Asian EM currencies. 89
74.5
Cases were up 2.5mio on Friday from the previous Friday, to 18.763mio.
88
74
87
73.5
86
73
85
72.5 84
72 83
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
INR 10 year bond yeild (LHS) NIFTY Index (RHS)
6.14 15000
Against US Dollars : 73.40 - 74.40 73.90 74.09
6.12 14900
Against Euro : 88.00 - 90.00 89.00 89.60 6.1 14800
On Wednesday we have the release of the Market PMI Services and 6.08 14700
Composite data. Manufacturing data managed to post another month of 6.06 14600
expansion, reading 55.5 on Monday, actually up from 55.4 for March despite 6.04 14500
the flare up in cases witnessed recently. Further expansion in Services 6.02 14400
sector should support INR appreciation against the dollar. 6 14300
5.98 14200
5.96 14100
5.94 14000
5.92 13900
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 15Turkish Lira
GDP YoY : 5.9% Unemployment rate : 13.1% ( Note: These opinions do not necessarily agree with the other contents of this report )
CPI YoY : 13.5% Curr. Acct. % of GDP : -5.1% Colin Asher, London
04 May, 2021
Summary of last week's market Movement over the past month Source from Bloomberg
TRY has been volatile in recent weeks. This past week saw it as one of the USD/TRY (LHS) EUR/TRY (RHS)
8.5 10.3
stronger perfromers against the US dollar, recouping some of the decline
10.2
from the previous week. The focus over the past week was monetary policy, 8.4
10.1
with the central bank promising tight policy. That said, with the new central
8.3
bank governor beholden to the president for his position and the president's 10
dislike of high rates being well known, investors are sceptical that policy will 8.2
9.9
remain tight. 9.8
8.1
9.7
8 9.6
9.5
7.9
9.4
7.8 9.3
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
What to expect this week Domestic stock market and interest rates Source from Bloomberg
Expected Ranges ( The week of 4/5 ) forecast mean (30/04 close)
(%)
TRY 10 year bond yeild (LHS) XU100 Index (RHS)
18.2 1460
Against US Dollars : 8.15 - 9.00 8.58 8.29
1440
Against Euro : 9.80 - 10.50 10.15 9.97 18
1420
The Institute of International Finance now sees fair vaule for USD/TRY at
1400
9.5 up from 7.5 previously in the wake of the change of central bank 17.8
1380
governor and the resulting loss of confidence and potentail policy volatility.
17.6 1360
Data in the current week include the CPI and PPI (both Monday). The CPI
1340
rose 17.14% and the PPI was up 35.17%, as a result of a combination of a 17.4
1320
weak currency and rising energy costs. The rising PPI points to growing
1300
pipeline inflation pressures. We see TRY weakening a little over the course 17.2
1280
of the week
17 1260
05/04/2021 12/04/2021 19/04/2021 26/04/2021 03/05/2021
Page 16Market Implied Policy Rate
Source from Bloomberg
Implied policy rates using OIS market (%) Implied rate change in 3 months time (%)
-0.8 -0.6 -0.4 -0.2 0 0.2 0.4
Policy Rate 3 months 6 months 1 year 2 years 3 years
Americas Russia
United States 0.13 0.10 0.11 0.11 0.17 0.32 Taiwan
Canada 0.25 0.28 1.27 1.27 1.27 1.27 Turkey
Mexico 6.50 5.68 5.35 5.38 5.69 6.35
Romania
Chile 0.50 -0.01 0.02 0.11 0.86 1.52
Brazil 3.75 3.26 3.37 4.17 7.19 9.17 Japan
EMEA Canada
Euro Zone -0.50 -0.54 -0.57 -0.56 -0.56 -0.49 Uniterd Kingdom
Uniterd Kingdom 0.10 0.10 0.12 0.12 0.25 0.31 Hungary
Switzerland -0.75 -0.80 -0.79 -0.80 -0.75 -0.66
United States
Norway 0.25 -0.18 -0.23 -0.29 -0.21 -0.07
Sweden 0 -0.19 -0.20 -0.20 -0.21 -0.08 Euro Zone
Czech Republic 1.00 0.45 0.43 0.46 0.59 0.67 Switzerland
Poland 1.00 0.45 0.33 0.30 0.46 0.62 Korea
Romania 2.00 2.09 2.35 2.38 1.96 1.87
Sweden
Turkey 9.75 9.94 9.51 14.65 10.70 12.11
Russia 6.00 6.27 6.29 5.94 6.25 6.32 Thailand
Hungary 0.90 0.90 0.91 0.97 1.16 1.48 Norway
Asia / Pacific Brazil
China 2.20 1.63 2.04 1.89 2.24 2.63 Chile
India 4.40 3.58 3.84 3.63 3.99 4.37
Czech Republic
Korea 0.75 0.58 0.56 0.56 0.70 0.75
Japan -0.07 -0.02 -0.02 0.00 -0.03 -0.06 Poland
Thailand 0.75 0.34 0.49 0.63 0.73 0.92 China
Taiwan 1.13 1.34 0.82 0.40 1.78 0.71
Page 17(%)
(%)
-
-
12.0
14.0
6.0
2.0
4.0
8.0
10.0
16.0
-2.0
2.0
6.0
8.0
4.0
-4.0
-6.0
-2.0
Turkey China
India Turkey
Russia US
Brazil India
Mexico Norway
South Africa Brazil
Poland Romania
Hungary Sweden
Czech
CPI YoY
Poland
GDP YoY
Romania Russia
Norway Hungary
US South Africa
Sweden Thailand
China Mexico
Thailand Czech
Economic Indicators (Quarterly data)
(%)
(%)
-
-
10.0
25.0
30.0
5.0
15.0
20.0
35.0
4.0
8.0
2.0
6.0
-6.0
-2.0
-4.0
Thailand South Africa
Sweden Brazil
Czech Turkey
Russia Sweden
Poland US
Mexico Russia
South Africa
Norway
Norway
Romania
China
Mexico
Current Account
India
China
Unemployment Rate
Hungary
Hungary
Brazil
Poland
US
Czech
Turkey
Thailand
Romania
Source from Bloomberg
Page 18Economic Indicators (Quarterly data)
Source from Bloomberg
GDP YoY % (EMEA) GDP YoY % (Other EMs)
15 Czech Poland Hungary 20 Russia South Africa China Brazil
Romania Norway Sweden
15 Mexico India Turkey Thailand
10
10
5
5
0
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19
0 -5
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19
-10
-5 -15
-20
-10
-25
-15 -30
CPI YoY % (EMEA) 25 CPI YoY % (Other EMs)
10
Czech Poland Hungary Russia South Africa China
Romania Norway Sweden 20 Brazil Mexico India
8
Turkey Thailand
6 15
4 10
2
5
0
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19 0
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19
-2
-5
-4
Page 19Economic Indicators (Quarterly data)
Source from Bloomberg
Umemployment rate % (EMEA) Umemployment rate % (Other EMs)
Czech Poland Hungary 35 Russia South Africa China Brazil
12
Romania Norway Sweden
Mexico India Turkey Thailand
30
10
25
8
20
6
15
4
10
2
5
0 0
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19 Mar 11 Mar 13 Mar 15 Mar 17 Mar 19
Current Account % (EMEA) Current Account % (Other EMs)
15
15 Czech Poland Hungary Russia South Africa China Brazil
Romania Norway Sweden Mexico India Turkey Thailand
10
10
5
5
0
0
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19
Mar 11 Mar 13 Mar 15 Mar 17 Mar 19
-5 -5
-10 -10
Page 20Commodities (Daily data)
Source from Bloomberg
Commodity price change % Oil Price vs Oil Currencies %
100%
50%
Brent Oil Gold Copper Brent Oil RUB/USD NOK/USD
80% 40%
60% 30%
40% 20%
20% 10%
0%
0%
29/03/2016
29/03/2016 -10%
-20%
-20%
-40%
-30%
-60%
-40%
Crude Oil Production % of GDP Economic Activities
100% US(LHS) China(LHS) UK(LHS) 1800% 3,000 20
Saudi Arabia(RHS) Russia(RHS) Norway(RHS) Baltic Dry Index (RHS, USD)
90% 1600% 18
Li Keqiang (LHS, %)
80% 2,500
1400% 16
70% 14
1200% 2,000
60% 12
1000%
50% 1,500 10
800%
40% 8
600% 1,000
30% 6
20% 400%
4
500
10% 200% 2
0% 0% 0 0
Jan 16 Jan 17 Jan 18 Jan 19 Jan 20 Jan 21 29/03/2016
Page 22Onshore vs Offshore market (3 month swap points)
Source from Bloomberg
(Pips) Taiwan Dollar
Chinese Yuan, Renminbi (Pips) Brazilian Real
(Pips)
700 Offshore USD/CNH Onshore USD/CNY - Offshore USD/TWD Onshore USD/TWD
400 Offshore USD/BRL NDF Onshore USD/BRL
600 -10
350
500
300 -20
400
250 -30
300
200
-40
200
150
100 -50
100
- -60
50
-100
-70
-
-200 Mar 20 Jun 20 Sep 20 Dec 20
Mar 20 Jun 20 Sep 20 Dec 20
Mar 20 Jun 20 Sep 20 Dec 20
Korean Won
Thai Baht (Pips)
(Pips) Indian Rupee (Pips) 1.00
14 Offshore USD/THB Onshore USD/THB
Offshore USD/INR NDF Onshore USD/INR Offshore USD/KRW Onshore USD/KWD
250
12 -
10
200 -1.00
8
6 -2.00
150
4
-3.00
2
100
- -4.00
50 -2 -5.00
-4
-6.00
- -6
Mar 20 Jun 20 Sep 20 Dec 20
Mar 20 Jun 20 Sep 20 Dec 20 Mar 20 Jun 20 Sep 20 Dec 20
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