EM FX was mostly firmer last week, but ended on a mixed note Friday. Best performers on the week for COP, MXN, and BRL while the worst were ARS, PHP, and CNY. We continue to warn investors against blindly buying into this broad-based EM rally, as we believe divergences will once again assert themselves in the coming weeks.

Turkey reports November IP Monday, which is expected to rise 7.0% y/y vs. 7.3% in October. Current account data will be reported Friday, and a deficit of -$3.85 billion is expected. If so, the 12-month total would rise to -$43.5 billion, the highest since December 2014. The external accounts are worsening at a time when financing them will become more difficult.

Czech Republic reports November construction and industrial output (5.7% y/y expected), and trade (CZK5.3 billion expected) Monday. December CPI will be reported Wednesday and is expected to rise 2.4% y/y vs. 2.6% in November. If so, it would still be above the 2% target and supports modest tightening ahead. Next policy meeting is February 1 and we expect another 25 bp hike to 0.75%. Retail sales will be reported Thursday, and are expected to rise 3.8% y/y vs. 7.0% in October.  

Hungary reports November IP and retail sales Monday. The former is expected to rise 7.2% y/y WDA and the latter by 5.5% y/y. Trade will be reported Tuesday. Central bank minutes will be released Wednesday. December CPI will be reported Friday, which is expected to rise 2.3% y/y vs. 2.5% in November. If so, inflation would still be below the 3% target though within the 2-4% target range. Next policy meeting is January 30 and further easing via unconventional measures are possible.  

Taiwan reports December trade Monday. Exports are expected to rise 9.4% y/y and imports by 9.1% y/y. Export orders have remained fairly robust, driven by the stabilizing mainland economy.

Chile reports December CPI Monday, which is expected to rise 2.3% y/y vs. 1.9% in November. If so, inflation would be back in the 2-4% target range for the first time since May. For now, the central bank has signaled no more easing. Next policy meeting is February 1 and rates are likely to be kept steady at 2.5%. December trade will also be reported that day.