A framework for evaluating EM currencies’ fair value
In our recent extended panel assessment on EM FX, we found most currencies have yet to recover ‘fair value’ after the March 2020 overshooting event. Estimates considered; regional stories emerge.
What you will learn:
- In Latin America, massive political noise has been a key ingredient for larger FX discounts. Meanwhile, EMEIA currency misalignments are mixed, with forecasts consistent with fundamentals continuing to improve in the near future.
- Our FX valuation model produces common elasticities for 15 EM economies.
- Model residuals are interpreted as misalignments, decoupled from key economic fundamentals controlled by high-frequency variables.
Housing supply front and centre for policy makers
The passing of the previously delayed Housing Australia Future Fund (HAFF) means that all the Albanese government's announced housing policies are now in place. These policies represent a minimum funding pool of $5.5 billion stretching to the end of the decade, potentially lifting as high as $10 billion if all targets are met and excess fund returns achieved.Find Out More
BoJ will continue effective zero interest rate policy anyway in Japan
The Bank of Japan (BoJ) maintained the policy rates at its September meeting, following a tweak in its yield curve control policy in July. Although this decision was widely expected, the markets are starting to speculate policy changes within the coming quarters, especially after the BoJ governor's recent interview.Find Out More