Goldman’s weaker dollar calls are added to the glow of the new market

(Bloomberg) – Investors in new markets seem to have a lot to do with them right now – and the renewed weakness of the US dollar contributes to the bullish sentiment.

MSCI Inc.’s index listing of developing country currencies rose to a record high on Friday as the dollar posted its biggest weekly decline in 2021, even as US interest rates rose. A measure of implied volatility fell to its lowest level since July, underscoring optimism about a vaccine-led global recovery and the prospect of more US stimulus.

“Global growth must be very strong over the next six months as vaccination campaigns unfold,” Goldman Sachs Group Inc strategists, including Zach Pandl and Kamakshya Trivedi, wrote in a note. “We expect global cyclical forces to dominate some degree of ‘US outperformance’, resulting in a dollar decline for most crosses.”

The Turkish lira is leading worldwide currency gains this year, and economists expect the central bank to keep monetary policy tight on Thursday after inflation rose for a fourth month in January. Political decision-makers in Indonesia are likely to ease the same day.

Central banks decide

Bank Indonesia is expected to lower its benchmark interest rate by 25 basis points, according to a majority of analysts in a Bloomberg survey. Governor Perry Warjiyo seemed to mark such a step in testimony to parliament last week Fixed balance of payments, including inflows to local bond markets, and eight-month CPI below target make room for a cut Rupee has also been stable since the last price meeting, and Bank Indonesia is likely to support the currency with rhetoric as well as intervention if necessary A surprising team could be marginally positive for currency, according to a study by BloombergIndonesia’s trade balance in January due Monday and expected to show a continued surplusThe current fourth quarter account data released on Friday And must remain in surplus. The surplus in the last two quarters of 2020 is the first since 2011 and creates room for Bank Indonesia to loosen monetary policy. Turkey’s central bank is expected to keep its repo rate at one week at 17%, according to most economists surveyed by Bloomberg; only three predict a 100 basis point increase “The lira has risen and reserves are rising, giving no reason to raise interest rates further,” according to Bloomberg EconomicsDerivatives traders paired their bearish play on the lira in a fourth week in the five days through to a month’s risk reversal, Governor Naci Agbal has promised to keep politics tight after raising the benchmark rate by 675 basis points to 17% since his appointment in November

Events and development

Trade is likely to be easy at the start of the week, with China’s markets closed until Thursday and Taiwan reopening only on Wednesday. Brazil and Argentina week will be shortened by carnival holiday Hungary seeks to vaccinate 2 million people against coronavirus by April using Chinese-developed shots, while Venezuela received the first 100,000 doses of the Russian Sputnik V vaccine. Traders will see the Ukrainian hryvnia after the International Monetary Fund concluded a remote assessment of its $ 5 billion loan program with Ukraine without clearing the next tranche because conditions have not been metPresident Volodymyr Zelenskiy said he will submit draft bills for improvement of the judiciary next week and “insist” that lawmakers discuss them “quickly”

Ecuador’s bondholders will see the recount of the votes from the presidential election after market-friendly candidate Guillermo Lasso fought environmental activist Yaku Perez for a seat in the run-off on April 11

The nation’s debt bounced back late last week as Lasso toppled Perez’s first leadership, raising the prospect of a face against socialist economist Andres Arauz. exacerbated by the pandemicQatar is holding a non-appointment roadshow in Europe from 15-17. February, USA from 22.-24. February and Asia from 25 February to 1 March

Key data

India’s trade number for January will be released on Monday and is likely to show a large deficit. The rupee was among the worst performing in New Asia last week despite the benefits of the aggressive budget and rapid advances in vaccinations. Philippines in December transfer figures are due on Monday, while balance of payments figures for January are due on Friday The peso remains slightly changed as authorities continue to protect the psychological key 48 level against the dollar China’s figures for current items in the fourth quarter will be released on Friday Net data on currency settlements for January will be followed closely after strong increase in corporate conversion rates in December It is possible that improvement in conversion rates compared to the July-November period will contribute to the yuan revaluation pressure The yuan closed up a bit this week , as positive market pressure continued to meet opposition from authorities Read more: Yuan Traders and why PBOC distrusts their Bull Ca see: Macro outlook South Africa’s January inflation likely accelerated from the year before, data on Wednesday may showRanden was one of the most effective developing countries’ currencies in the past weekRead more: From Global Pariah to Emerging Market Proxy: Edge turns 60Listen: Speech by the European Championships: RenCaps Robertson on the Randts 60th (Podcast) Russia’s central bank will publish its monetary policy report on Saturday. The regulator ended its monetary easing cycle as a sign of a rebound from the pandemic added to inflationary pressures. Interest rates were put on hold for a fourth straight political meeting on Friday Russia will also release January industrial production data on Monday, which is expected to show an improvement from the previous year

A reading of Colombia’s fourth quarter gross domestic product on Monday is likely to mark an economic recovery while remaining below pre-pandemic levels

The economic activity in December, released on the same day, is expected to show similar results

In Peru, a measure of economic activity in December released on Monday is likely to show a similar picture as growth gradually returns, according to Bloomberg Economics

The nation’s fourth-quarter figures on gross domestic product scheduled for release on Thursday should also show a recovery from the sharp contraction that was felt in the middle of the outbreak as lockdown measures loosen and external demand takes

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