EM equities end week higher; ILS, BRL, IDR underperformed - BBH

FXStreet (Córdoba) - Analysts from Brown Brothers Harriman show how Emerging Markets (EM) performed during the week that the Federal Reserve left its monetary policy unchanged. Among currencies they note that the BRL was among the worst amid a new fiscal package in Brazil, with an unlikely approval and as the local press reports that “Lula and the PT are considering pro-growth measures that would see Levy (Finance Minister) and Tombini (Central bank president) leave their posts.”

Key quotes:

“In the EM equity space, Turkey (+5.1), Malaysia (+4.1%), and South Africa (+4.1%) have outperformed over the last week, while China (-2.9%), Qatar (-1.8%), and Czech Republic (-1.8%) have underperformed. To put this in better context, MSCI EM rose 3.5% over the past week while MSCI DM rose 0.7%.”

“In the EM local currency bond space, Russia (10-year yield -32 bp), Thailand (-32 bp), and Indonesia (-27 bp) have outperformed over the last week, while Brazil (10-year yield +30 bp), Chile (+8 bp), and Colombia (+5 bp) have underperformed. To put this in better context, the 10-year UST yield fell -3 bp over the past week.”

“In the EM FX space, RUB (+3.2% vs. USD), MYR (+2.9% vs. USD), and ZAR (+2.3% vs. USD) have outperformed over the last week, while ILS (-0.8% vs. USD), BRL (-0.7% vs. USD), and IDR (-0.4% vs. USD) have underperformed.”