Written by my colleague Dr. Win Thin

In the EM equity space, as measured by MSCI, Egypt (+3.5%), Korea (+0.9%), and Hong Kong (+0.5%) have outperformed this week, while Peru (-5.1%), Russia (-4.6%), and Brazil (-3.0%) have underperformed. To put this in better context, MSCI EM fell -0.4% this week while MSCI DM fell -0.1%.

In the EM local currency bond space, Peru (10-year yield -5 bp), South Africa (-4 bp), and Israel (-4 bp) have outperformed this week, while the Philippines (10-year yield +24 bp), Hungary (+18 bp), and Russia (+15 bp) have underperformed. To put this in better context, the 10-year UST yield rose 10 bp to 2.58%.

In the EM FX space, ILS (+0.6% vs. USD), INR (+0.3% vs. USD), and COP (+0.2% vs. USD) have outperformed this week, while EGP (-8.3% vs. USD), BRL (-1.3% vs. USD), and RUB (-1.0% vs. USD) have underperformed.

North Korean banks subject to international sanctions have been banned from using Swift. The Society for Worldwide Interbank Financial Telecommunication said it had been informed by Belgian authorities that they would no longer provide the “necessary authorizations” for it to continue offering services to North Korean banks covered by United Nations sanctions.

Korea’s Constitutional Court upheld Parliament’s motion to impeach President Park. A new election will be held within 60 days. The three leading contenders (according to the most recent Gallup poll) to replace Park are Moon Jae-in and Ahn Hee-jung of the largest opposition Democratic Party of Korea, and Ahn Cheol-soo of the smaller opposition People’s Party. Macro policy will remain prudent whoever is elected, but there are likely to be positive micro changes (with regards to how the chaebol operate) in the next administration.  

Singapore eased some property market curbs after a three-year decline in home prices. Specifically, the stamp duty for sellers was reduced and debt ratio rules for some mortgages were eased. Measures will go into effect March 11.