The Intelligence Report

24 Apr 2017

  • Macron vs. Marine – considering the implications of declining perceptions of Frexit tail risks in light of the first round results of the French presidential elections
  • South Africa’s path – examining the recent dramatic sacking of Pravin Gordhan, the widely respected South African finance minister, and the country’s subsequent downgrading to junk status by S&P
  • A Czech break – focusing on the long-awaited depegging of the Czech koruna, envisaging that the fundamental strength of the Czech economy may now drive significant medium term currency appreciation
  • When Donald Trump meets Xi Jinping, the reality emerges– offering insights into how the differing personalities of Xi and Trump may shape the outcome of their meeting as well as future discussions
We had not planned to write about the first round of the French presidential elections in this edition of The Intelligence Report. We felt confident that our readers would already have had their fill of insights and analysis. However, it’s clear from the market reaction to the “as expected” result that it isn’t quite as simple as that. In our first article, we consider the implications of declining perceptions of Frexit tail risks in light of the first round results. The rest of the edition turns its attention to emerging markets, always a rich source of interesting and idiosyncratic stories – we highlight three stories of particular note which have made recent headlines. In the first of our articles, Cristiana De Alessi, Portfolio Manager for our Emerging Market Fixed Income (EMFI) team, examines the recent dramatic  sacking of Pravin Gordhan, the widely respected South African finance minister, and the country’s subsequent downgrading to junk status by S& P. She takes a relatively benign view of the shorter term market implications, whilst sounding a decidedly cautious note in the longer term. In our second article, Bryan Carter, Head of our EMFI team, focuses on the long-awaited depegging of the Czech koruna, envisaging that the fundamental strength of the Czech economy may now drive significant medium term currency appreciation. Lastly, Chi Lo analyses the recent Xi – Trump meeting, offering insights into how the differing personalities of the two leaders may shape the outcome of this, and future discussions.
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