Citigroup 3 月 23 日英文超长篇，140页。

     The global recovery has generally come hand in hand with some evidence ofrising inflation, but that’s less true in EM. We argue that EM does faceinflationary pressures, but in a fashion that is more synchronised with globaltrends than in previous years: in other words, the idiosyncratic component ofEM inflation has fallen considerably.

 EM inflation traditionally exceeds DMinflation. However, the long-term trend has been for this differential toshrink and what appears to be happening is that excess inflation, oridiosyncratic inflation unrelated to global price developments, is declining inEM. We remain sceptical whether this decline in EM’s idiosyncratic inflation istemporary or permanent.

 Clearly there are some structural elementsthat explain idiosyncratic inflation in EM. Economic openness and quality ofregulations are for example negatively correlated with the share ofidiosyncratic inflation in overall inflation. And historical fx volatility seemsto be another structural source of idiosyncratic inflation in EM. However, our viewis that also cyclical factors, particularly fx appreciation, have helped toreduce idiosyncratic inflation over the last two years.

 Since cyclical factors have helped push downidiosyncratic inflation in the past two years, a question arises as to whatmight cause exchange rate depreciation across the board. The best candidate todeliver this kind of shock these days is probably a strengthening of thedollar, leading to capital outflows and lower commodity prices, therebytriggering further currency depreciation in EM. While Citi’s base case is that thedollar will stay weak, the downside risk and the consequences for EM are worth keepingin mind, particularly against the background of strong US data.

 In the absence of a shock coming from astronger DXY, EM inflation seems set to converge further towards global inflation.Output gaps are improving, but remain in the ‘Goldilocks’ zone, where theeconomy is not overheating, and currencies are on a stable path, but one shouldexpect a round of ‘risk off’ to change that.

 The Fed and oil have faded as risk factorsfor EM, but trade actions remain the biggest source of uncertainty. Risks ofescalation to an all-out trade war are not high and major risk aversion can beavoided. We stay long FX in Asia and Latam, but are more cautious in CEEMEA. We’repositive on duration overall.