The Belt and Road Initiative (BRI), China’s ambitious infrastructure and investment plan worth over $1.5 trillion over ten years, will have enormous economic, geopolitical and investment implications for China.
But its impact on the more than 80 countries it encompasses is likely to be greater still.
Economics: We expect Asia’s sweet spot of solid growth, strong capital inflows, tame inflation and low interest rates to stretch into 2018, underpinned by a durable global tech upcycle, continued quantitative easing by the European Central Bank and Bank of Japan and still-loose regional macro policies.
Despite the lessons learned from past crises, currency crises still occur from time to time and spread contagiously when they happen. After receiving substantial capital inflows, some EM economies are under pressure this year, as investors re-assess the risks from developed markets monetary policy normalisation, trade protectionism, China’s economic slowdown and country-specific factors.
When deciphering EM rates, we look at 14 rate markets across Asia, Latin America and EEMEA, and highlight the evolution of benchmark policy rates and analyze their relationship with IRS/CCS fixings through different monetary policy regimes by looking at seasonal factors and possible leads or lags in the fixing to potential rate actions. We also look at the effects of sharp domestic equity and foreign exchange moves on the fixing.
The first three industrial revolutions – powered by water and steam, electricity, and electronics and information technology – transformed our world.
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