EM FX was mixed Friday, capping a mixed week as a whole.COP, CLP, and MXN were the best performers last week, while RUB, BRL, and TRY were the worst. While concerns about trade wars and Syrian missile strikes have ebbed, risks to EM remain elevated.US retail sales Monday and Fed Beige Book Wednesday are the economic highlights this week.
Indonesia reports March trade Monday. Bank Indonesia meets Thursday and is expected to keep rates steady at 4.25%.CPI rose 3.4% y/y in March, near the bottom of the 3-5% target range.As such, Bank Indonesia should be able to keep rates on hold for most of this year.
Turkey reports February IP Monday, which is expected to rise 10.4% y/y vs. 12% in January. The economy remains fairly robust even as inflation remains elevated, raising concerns about overheating. The central bank next meets April 25, and much will depend on the lira. If it remains under pressure, the bank may be forced to tighten.
Bank of Israel meets Monday and is expected to keep rates steady at 0.10%. CPI will be reported over the weekend and is expected at 0.1% y/y, which is well below the 1-3% target range. The lack of any price pressures should allow the central bank to keep rates on hold this year.
Colombia reports February retail sales and IP Monday. The former is expected to rise 5.7% y/y and the latter by 1.4% y/y. It then reports February trade Friday. Officials are starting to get concerned about the strong peso and its impact on the economy. Next policy meeting is April 25, and rates are expected to be cut 25 bp to 4.25%.
Singapore reports March trade Tuesday. NODX are expected to rise 4.2% y/y vs. -5.9% in February. Last Friday, the MAS tightened policy modestly whilst voicing some concerns about the global trade outlook. We expect the MAS to proceed cautiously.
China reports March retail sales and IP as well as Q1 GDP Tuesday. GDP growth is expected to remain steady at 6.8% y/y, while sales and IP are expected to pick up slightly. For now, the economic outlook is one of stability.