- Big upside inflation surprises in Turkey and parts of LATAM co-exist with moderating inflation in EM Asia. China’s economic surprises keep decoupling from the rest of EM.
- From the market’s perspective, a key question is whether EM’s big inflation divide will reinforce a big monetary policy divide.
- A lack of positive economic surprises is one reason why the market is so focused on China’s crackdown on tech companies, corporate defaults, and the U.S.-China financial decoupling narrative that is making rounds this morning.
For further details see:
EM's Big Inflation Divide