Emerging-market investors seem to have everything going for them right now, with the November rally offering a hint of what 2021 may have in store. Bonds have wiped out their year-to-date losses, while MSCI Inc. ’s currency index is poised for the best month since January 2019 as well as a second successive annual gain. […] Fourth-quarter portfolio inflows to emerging markets are poised to hit the highest in eight years, data from the Institute of International Finance show. […] Below are three reasons to be optimistic about the outlook for emerging currencies in 2021 and key events and data to watch out for in the coming week: Attractive Valuation Exchange rates in developing economies are still modestly undervalued, with an average Z-score of minus 0.4 using a simple metric of the current REER versus the five-year average. […] Bloomberg Economics expects the reading to beat expectations, although this may be partly due to working-day effects The yuan’s outperformance has partly been because of the recovery in the domestic economy Markit manufacturing PMIs are due on Tuesday for the rest of Asia, with China’s Caixin indicators on Thursday These diffusion indicators have shown a steady improvement over the past four months South Korea’s October industrial production data will kick off a busy week of economic reports, including a third-quarter gross domestic product reading on Tuesday and current-account data on Friday South Korea will maintain social-distancing rules in the greater Seoul area at the current level while adding restrictions to more venues, and tighten measures outside the capital region The won was Asia’s top-performing currency last week, in line with its economic performance and external accounts, despite continued concerns about the impact of currency strength READ: Here Are the Low-Yield Asia FX to Watch for Returns: Macro View Malaysia’s October trade balance is due to show another surplus on Monday The ringgit was the second-strongest currency in Asia last week as commodity prices extended gains and the government passed the budget Thailand’s current account for October is expected to remain in surplus, as are the trade accounts, in data due Monday The constitutional court is due to rule on Prime Minister Prayuth Chan-Ocha’s qualification to serve on Wednesday — after allegations of abuse of power resulting from his residence in army accommodation, despite no longer being a serving officer A slew of inflation figures are due in Asia, including those from Indonesia, South Korea, the Philippines and Thailand Eastern Europe Rates Poland’s central bank will probably leave its policy rate unchanged near zero for a sixth consecutive meeting as the eastern European country tightens measures to combat the spread of the coronavirus Policy makers in Hungary will announce their decision on Thursday after leaving the key rate unchanged at 0.75% at the previous nine meetings Polish GDP, Turkey CPI Poland reports final third-quarter GDP on Monday, followed by November PMI and CPI prints on Tuesday South Africa probably posted a fifth straight monthly trade surplus in October amid muted imports and rising commodity exports, data may show Monday Reports on the money supply and private credit, manufacturing, vehicle sales and business confidence will give clues about the strength of the recovery from the coronavirus lockdown Russia’s consumer inflation probably accelerated in November to a seven-month high, a report may show on Friday, complicating the central bank’s policy options for the remainder of the year The manufacturing and services PMIs, gold and forex reserves, and money supply are also due this week Turkey’s consumer inflation rate probably rose to 12.7% in November, the highest in more than a year, data may show Thursday.
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