In the EM equity space as measured by MSCI, Korea (+4.2%), South Africa (+3.2%), and Thailand (+1.9%) have outperformed this week, while Egypt (-5.1%), Turkey (-1.9%), and Russia (-1.8%) have underperformed. To put this in better context, MSCI EM rose 0.7% this week while MSCI DM fell -0.3%.

In the EM local currency bond space, Malaysia (10-year yield -13 bp), South Africa (-13 bp), and Colombia (-12 bp) have outperformed this week, while Turkey (10-year yield +22 bp), Lebanon (+19 bp), and Peru (+12 bp) have underperformed. To put this in better context, the 10-year UST yield fell 5 bp to 2.35%. 

In the EM FX space, ZAR (+2.3% vs. USD), KRW (+1.8% vs. USD), and ILS (+1.0% vs. USD) have outperformed this week, while TRY (-0.6% vs. USD), PLN (-0.3% vs. EUR), and RUB (-0.3% vs. USD) have underperformed. 

Moody’s raised India’s sovereign debt rating for the first time since 2004 by a notch to Baa2 with a stable outlook. This puts it one notch above the other two major rating agencies, Fitch and S&P. However, note that our own sovereign ratings model shows India’s implied rating at BBB+/Baa1/BBB+, and so further upgrades are likely.Moody’s cited progress on institutional and economic reforms.   

Nigerian officials are on a global roadshow to support plans to issue its longest-dated Eurobonds ever. Total of $2.5 bln in 10- and 30-year foreign currency bonds is reportedly planned, but details have yet to be released. Currently, the longest is a 15-year issued this February. Size could be increased, as parliament authorized the government’s plan to issue $5.5 bln of external debt.  

The head of South Africa’s budget office resigned. Michael Sachs said he wanted to continue serving the public sector but “in a different capacity. ”He added that he won’t leave the National Treasury immediately in order to ensure a proper handover and smooth transition. Local press reports that Sachs resigned after President Zuma’s office ordered the National Treasury to find additional money to fund a plan for free higher education.