On Tuesday, BCA Research's Emerging Markets Strategy service concluded that the cyclical outlook for Brazilian bank stocks has worsened further due to the COVID-19 pandemic, despite the fact that valuations have improved. Brazilian…
Highlights The pandemic has a negative impact on households and has not peaked in the US. But a depression is likely to be averted. Our market-based geopolitical risk indicators point toward a period of rising political turbulence…
Feature We closed our short position in EM equities last week but still maintain our short recommendation on EM currencies. Going forward we will be looking for signs of a durable bottom in risk assets. The clash between forthcoming…
The selloff in Brazilian financial markets has been vicious. A bottom might not be too far away given the 57% drop in large cap and a 62% drop in small cap stocks in US dollar terms since their peak. However, downside risks…
Since February 2018, Chilean stocks in USD terms have fallen more than 50% to their 2008 lows. They now trade at their cheapest cyclically-adjusted P/E ratio since 2003. This cheapness is particularly significant as Chilean and…
Highlights Bear markets occur in phases, and their narrative can mutate. What began as a selloff caused by the coronavirus outbreak could well mutate into an oil crash-led selloff, and then mutate again into a selloff due to policy…
Highlights An analysis on Colombia is available below. If EM share prices hold at current levels, a major rally will likely unfold. If they are unable to hold, a substantial breakdown will likely ensue. The direction of EM US dollar…
Highlights Analyses on Asian semis, Argentina and Russia are available on pages 7, 12 and 14, respectively. The most likely trajectory for Chinese growth will be as follows: the initial plunge in business activity will be…
Since the summer of 2019, the Mexican central bank has cut interest rates from 8.25% to 7%. The Mexican economy remains weak, therefore, our emerging market strategist expects Banxico to cut rates to 6%, maybe even lower.…
Highlights Malaysian businesses and households have been deleveraging and the economy risks entering a debt deflation spiral. This macro-backdrop is bond bullish. EM fixed income-dedicated investors should keep an overweight position…