Emerging Markets View: What Our Analysts Are Reading

EM View

Emerging markets are caught between the rebound in risk appetite and an appreciating dollar, according to Business Insider. Sam Osborn, Practice Leader for FSG’s Global Analytics, agrees with the article’s sentiment.

“The catalysts of global currency volatility are primed to act. Any changes in the forward guidance from the ECB or US Federal Reserve has the potential to rattle investors and drive sharp currency swings in emerging markets.  FSG clients should read our FX Quarterly report for additional information on the operational strategies executives can employ to mitigate the effects of exchange rate fluctuation.”

In a more positive light, India’s economy likely grew at its fastest in two years according to a Reuters poll. Though this good news, it’s not an immediate result from India’s recent landmark general election.

“Economists are expecting the latest figures from India to show that the country grew at 5.3% during its April-June quarter. If achieved, this would be India’s fastest growth since Q1 2012, indicating positive investor and consumer sentiment,” says Shishir Sinha, Senior Analyst for Asia-Pacific at FSG. “Executives should keep in mind that the Modi government would have little direct impact on these figures since they officially took up the helm in June.”

Meanwhile, Argentina continues to be met with skepticism as companies fear a radical turn in Argentina, according to the Financial Times.

“While Argentina took steps to change its policy course earlier this year by devaluing the peso, cutting subsidies, and making efforts at rapprochement with the Paris Club, those efforts were stymied by the default,” according to Gabriela Mallory, senior analyst for Latin America. “Argentina has once again switched gears to even more interventionist and expansionary economic policies that make FSG’s downside scenario of a deepening recession more probable.”


FSG clients can stay up to date with analyst commentary on the latest emerging markets headlines on the client portalNot a client? Contact us to learn more.

 

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