October, 14 2016 by lsr team

The euro area LI continues to put in an above consensus call. It is probably over predicting growth somewhat but its strength is fundamentally underpinned by the newly emerged German locomotive. While German demand often turns out to be derived from others, chiefly China, in this case it is genuine. In fact, this is highlighted by our below consensus Australia call. China’s stimulus has not fed through to a rebound in private demand, although easing PPI deflation is helping manufacturers.

September, 16 2016 by lsr team

Emerging market growth has been on a downward trend for just over half a decade. The slowdown probably bottomed out at the end of last year. On an aggregate basis, the advance in EM annual real GDP accelerated to 3.9% in Q2 from 2.4% in Q3 2015. Is this the start of a sustained rebound in EM growth? Click above to watch the full video or below for our latest report on emerging markets.

March, 09 2016 by lsr team

Improved risk sentiment is driving another rebound in EM assets. Investors have scaled back fears of a US recession, with Treasury yields now off recent lows and inflation breakeven rates bouncing from depressed levels. At the same time, China is loosening the fiscal taps, while the PBoC has shifted its focus back to boosting liquidity and credit. In turn, commodity prices have found a degree of stability. Market expectations for the path of Fed policy hit extremes in February. Since then, the US$ index (DXY) has turned higher, EM currencies have strengthened and oil pri...

February, 29 2016 by lsr team

Shweta Singh, senior economist at Lombard Street Research, discusses the new budget that caters to the rural sector of the economy. Click below to watch the full video on CNBC.

January, 04 2016 by lsr team

Happy New Year! Having sifted through various sell-side reports, we conclude that our emerging market view is more on the bearish side. While we have a constructive stance on some EMs, India and Mexico in particular, our general tone is still one of caution. For more details, please request a copy of our year-ahead piece -2016: Don’t panic, yet! In today’s note, we address three key questions: 1) Why are we more bearish than consensus on EMs? 2) What would make us more optimistic? 3) What would make us more negative? Click below to find out more.

October, 06 2015 by lsr team

The emerging market (EM) slowdown that started in 2011 and gathered pace after the taper tantrums of 2013 continues unabated. The two questions investors often asked over the last couple of years have been: are EMs heading for a 1990s-style crash and is the worst behind us? We have replied No to both, and the follow-up question has usually been ‘how much more pain is in store?’ This has been tough to answer. Our latest publication - LSR View looks at the extent of the adjustments that EMs still need to make by answering the following set of questions: 1) W...

August, 13 2015 by lsr team

China joins currency wars, just as the Fed prepares to raise rates. The move in the yuan over the last couple of days is the sharpest since the steep devaluation of 1994, which is often cited as one of the first actions that ultimately led to a widespread emerging market financial crisis. The start of the Fed’s rate rise cycle during the same year was the straw that broke the camel’s back. What does it bode for emerging markets this time around? Please click below for the full report.  

August, 04 2015 by lsr team

The Reserve Bank of India (RBI) kept the policy repo rate unchanged in its monetary policy meeting today while leaving the door open for more rate cuts. Our report answers two critical questions: to what extent the RBI can afford to loosen policy and more importantly, whether it would work. Interbank liquidity conditions are improving in India. In fact, liquidity conditions are looser than at any time since 2009. This is in line with our expectations and is one of the reasons why we think economic recovery will gain traction. But will fears about excess liquidity cause t...