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Argentina joins the EM local currency bond index

Weekly investor research

09 January 2017

We applaud JP Morgan for including Argentina in the GBI EM GD local currency government bond index, although the main benchmark indices in EM fixed income still remain woefully unrepresentative of the overall opportunity set. Mexico intervenes in the currency market to stabilise MXN in response to a series of threats by US President-elect Donald Trump against US and foreign companies with plans to produce cars in Mexico. The Speaker of the Lower House in Brazil’s parliament is optimistic that pension reform will be passed in H1 2017. Venezuela’s President Nicholas Maduro reshuffles his cabinet to surround himself with friends as his party hits new lows in the polls. China’s recent oversight and regulatory measures are broadly similar to provisions that exist in Western capital markets and should not be regarded as capital controls. US payrolls did not change the immediate economic outlook, while the December FOMC minutes suggested discomfort in Fed circles at prospect of major fiscal stimulus at a time of full or near-full employment.

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