http://www.emergingmarketsmonitor.com Emerging Markets Monitor RSS Feed from Business Monitor International en Copyright 2010, Business Monitor International Ltd Tue, 09 Feb 2010 06:30 GMT Tue, 09 Feb 2010 06:30 GMT AFP RSS Generator Despite a substantial market correction in recent weeks, we continue to hold a broadly bearish stance towards Asian equity markets, with many key indices across the region making decisive breaks below their 200-day moving averages. While we could see markets take a breather - or even bounce short term - a combination of poor technicals, sovereign risk contagion and a stuttering macroeconomic picture suggests to us much further downside ahead. http://www.emergingmarketsmonitor.com/file/86026/Equities:-Still-On-The-Ropes.html Mon, 08 Feb 2010 00:00 GMT BMI View: The South African rand looks set for a spell of short-term weakness on the back of US dollar strength and waning risk appetite. Meanwhile, the rand looks set to continue its gentle depreciation against the Japanese yen, and sustain its appreciation against the euro. http://www.emergingmarketsmonitor.com/file/86025/Rand:-Bearish-Technical-Picture.html Mon, 08 Feb 2010 00:00 GMT Commodity markets are trading up this morning, likely on the back the strong close in the Dow Jones late on Friday as well as the slightly weaker US dollar this morning. This backdrop, combined with oversold momentum indicators, is suggestive of a bounce in commodity markets short-term, particularly for the base metals and agricultural complex (as technical indicators remain more favourable). That said, the medium term outlook has deteriorated significantly in recent weeks, which could weigh on markets going forward. Greece's fiscal woes will continue to weigh on sentiment as long as they remain unresolved, as will the potential for http://www.emergingmarketsmonitor.com/file/86023/Commodities:-Medium-Term-Risks-Remain.html Mon, 08 Feb 2010 00:00 GMT We see potential for a modest short-term bounce in grain prices. Firstly, grain markets held up relatively well amidst broad-based commodity weakness last week. As a result, they are well placed to benefit from a potential bounce in commodity prices this week. Secondly, tomorrow's United States Department of Agriculture (USDA) world supply and demand estimates (WASDE), could provide a boost to underlying grain fundamentals. Given the bearish extent of WASDE data in January, we expect that the majority of bad news has been priced into grain markets and short-term risks to supply estimates lie to the downside. With this in http://www.emergingmarketsmonitor.com/file/86024/Commodities:-Grains-Eyeing-Short-Term-Gains.html Mon, 08 Feb 2010 00:00 GMT Regular readers of the Latin America Daily Financial Alert will be familiar with our bearish stance on Brazil's US dollar debt. Since initiating our bearish US$ Global 2027 position in our Key Market Views portfolio on January 26, we have seen implied gains of 2.5%, and continue to target a price level of 140.00 on the bond. The view is underpinned by our belief that considerable fiscal uncertainty is not fully priced into the bond market, while Brazil's robust economic performance in the latter stages of 2009, along with the positive outlook for 2010, have already been factored into yields, which hit a record low at the start of the year. http://www.emergingmarketsmonitor.com/file/86021/CDS:-Mexico-To-Move-Inside-Brazil.html Mon, 08 Feb 2010 00:00 GMT Core View: The recent decline in risk appetite and the concomitant sell-off in markets, has prompted us to downwardly revise our average price forecast for lead prices in 2010. We now anticipate lead will average US$2,300/tonne in 2010, down from out previous forecast of US$2,400/tonne. That said, we have left our average forecast of US$2,500/tonne unchanged in 2011. Three-month lead is currently trading at US$1,935/tonne, and we do not rule our further downside pressure on prices. Furthermore, according to the International Lead & Zinc Study Group (ILZSG), the global lead market was in surplus to the tune of 58,000 tonnes in the first eleven months the year, which should tame upside pressures to lead prices in the short run. http://www.emergingmarketsmonitor.com/file/86022/Lead-Update:-Downside-Risks-To-Average-Price-of-US$2300-tonne-In-2010.html Mon, 08 Feb 2010 00:00 GMT A spate of bad news concerning the liquidity crisis of http://www.emergingmarketsmonitor.com/file/86020/Potential-GFH-Default-Bad-Sign-For-Banking-Sector-Recovery.html Mon, 08 Feb 2010 00:00 GMT With market conditions once again piling up against the Vietnamese dong, we see the government effecting another devaluation of the unit to the vicinity of VND19,000-19,200/US$ before the end of February. We believe this will be coupled with an increase in the base rate, most likely by 100bps. http://www.emergingmarketsmonitor.com/file/85981/New-Devaluation-Approaching.html Fri, 05 Feb 2010 00:00 GMT Precious metals have been hit particularly hard in recent trading and we see potential for further downside in the coming days. We have been wary of precious metals for some time, highlighting potential downside for PGMs in particular http://www.emergingmarketsmonitor.com/file/85980/Commodities:-Precious-Metals-On-Thin-Ice.html Fri, 05 Feb 2010 00:00 GMT Yesterday's market turmoil has sent the euro tumbling back through support at US$1.3750/EUR, a development which could herald a period of renewed risk aversion, depending on today's non-farm payrolls data and the weekly closes on a number of key global markets. This is in line with BMI's long-held view that what we believe to have been a mismatched technical-fundamental picture (that has driven the rally since March 2009) could lead to a sharp correction and a renewed wave of deleveraging, which could benefit the dollar and take its toll on commodities. http://www.emergingmarketsmonitor.com/file/85979/Dollar-Strength:-Key-Implications-For-MENA-FX.html Fri, 05 Feb 2010 00:00 GMT March corn collapsed in January, weighed down by a surprise upward revision to the United States Department of Agriculture (USDA)'s global supply estimates on January 12. Despite the slowest US harvest on record, the USDA now expects a record US corn crop in 2009/10. This has undermined our bullish corn view, by forcing a reduction in our projected global corn surplus to 5.5mn tonnes for 2009/10, down from our previous estimate of 10.7mn tonnes. This shortfall should keep markets tight on a historical basis. However, we now identify downside risks to our forecasts for an average price of USc450/bushel for http://www.emergingmarketsmonitor.com/file/85937/Monthly-Grains-Update.html Thu, 04 Feb 2010 00:00 GMT Nigerian equities have risen sharply in recent trading sessions, hitting a fresh four month high of 24,226 at the time of writing. The latest move brings total gains since the beginning of February to 6.5%, while year-to-date gains now stand at 15.4%. http://www.emergingmarketsmonitor.com/file/85936/Bullish-Technicals-Point-To-Equity-Revival.html Thu, 04 Feb 2010 00:00 GMT While the Philippine peso has held up relatively well in the face of widespread Asia FX weakness, we are maintaining a near-term depreciatory bias. Technically speaking, we expect to see a retracement back towards trendline support, currently at PHP47.85/US$. Prolonged risk aversion, US dollar strength and growing expectations of Chinese monetary tightening could see this level breached over the coming weeks, setting up a further bout of depreciation. http://www.emergingmarketsmonitor.com/file/85935/PHP:-A-Near-Term-Depreciatory-Bias.html Thu, 04 Feb 2010 00:00 GMT With the Serbian dinar remaining firmly within a depreciatory trendchannel since November 2009, and pushing through a key level of support at RSD97.00/EUR in early January, the near-term outlook for the currency is certainly weak. Indeed, having fallen to a new record low of RSD98.94/EUR at one point on February 4, the currency appears set for further depreciation over the coming weeks. As a result, we caution that additional depreciation beyond RSD100.00/EUR is likely, though we expect the central bank to intervene in the event of a sell-off beyond RSD105.00/EUR. http://www.emergingmarketsmonitor.com/file/85934/RSD:-Appreciatory-Momentum-To-Resume-In-Q2.html Thu, 04 Feb 2010 00:00 GMT The general bounce in commodity prices that has played out in recent trading appears to be losing steam. Admittedly, the broad technical picture suggests further upside potential in the short-term. In particular, daily momentum indicators for the CRB Index have only just ticked up from oversold territory. However, with markets such as copper and oil looking precarious at present, the outlook is mixed. Given that both copper and oil are typically bellwethers for the wider commodity complex, we are growing increasingly cautious with regard to the short-term outlook for commodities in http://www.emergingmarketsmonitor.com/file/85933/Commodities:-Short-Term-Bounce-Looking-Shaky.html Thu, 04 Feb 2010 00:00 GMT