Subject: EM MSF - Outlook, trade updates, specials on Arg, Mex, SoA, FX From: Martin Zeman < > Date: Fri, 27 Oct 2017 12:43:30 -0400 To: "Paul Barrett (S" Stewart Oldfield I haven't read this yet, but it has updates on Arg and South Africa post the latest news/elections. From: Drausio Giacomelli Sent: Friday, October 27, 2017 11:38 AM Subject: EM MSF - Outlook, trade updates, specials on Arg, Mex, SoA, FX The repricing of premium across EM that we have highlighted over the past six+ weeks is starting to show some signs of overshooting in FX. But we avoid retracement trades before uncertainty about US taxes and Fed is resolved and we see fatigue in the repricing of growth via weaker equities. Download the complete report: http://pull.db-gmresearch.com/p/- 8197-3525/253082833/DB_EMEventRadar_2017-10-27_0900b8c08dbd45c0.pdf Economics Focus: In Asia, we expect Taiwan's GDP growth to accelerate in 03 and South Korea's CPI inflation and export growth to fall in October. In EMEA, we believe CNB will hike the policy rate by 25bps next week. While October inflation is likely to decline in Poland and Russia, it should accelerate in Turkey. In LatAm, the COPOM minutes on Tuesday should reinforce a final 50bp cut next while leaving the door open for more. Watch for some deceleration in Mexico's 03 GDP as private consumption continues to decline at the margin. Strategy Focus: The repricing of premium across EM that we have highlighted over the past six+ weeks is starting to show some signs of overshooting in FX. But we avoid retracement trades before uncertainty about US taxes and Fed is resolved and we see fatigue in the repricing of growth via weaker equities. FX: Increased correlation with US yields and overshooting vs. DXY (observed in the underperformance vs. EUR since mid-October) point to pent-up FX- hedging demand for local bonds. This is unlikely to reverse before the pressure on core yields ease. The contribution of idiosyncratic shocks in