Week‐ahead highlights
Germany’s elections, scheduled to take place over the week‐end, are expected to be a relatively low event risk event for markets, as Chancellor Merkhel is expected to retain a similar position to her current status. On the Fed front, things have remained relatively interesting, with Bullard seemingly suggesting that October is a possibility for tapering, just two days after the Fed decided not to taper….. Fed speak is likely to remain a major market driver in our view (and uncertainty high / predictability reduced). On the EM front, issuers seized the window of improved sentiment to issue bonds, with those tapping markets including Colombia (US$1.6bn) and BNDES (US$2.5bn). There are reportedly several other potential deals in the pipeline (Valor mentioned: Petrobras, CSN and Banco do Brasil), which could become LATAM FX tailwinds.
Read full report: FX Daily
Scotiabank