Staying Selective among EM and DM Outliers - Feb. EM/DM Leading Indicator Watch

New Ideas: Adding exposure to Indian equities 
Summary: Rising inflation and weak liquidity conditions remain headwinds for most economies, but we see some outliers with strong growth prospects and stable inflation. Among DM, inflation pressures are moderately elevated across the board while growth outlooks remain divergent. Among EM, South Africa, Indonesia, and India are outliers with improving growth outlooks and tame inflationary pressures.

Summary by Country:

• Japan: Inflation pressures stabilizing, BoJ not hawkish enough to boost JPY
• UK: Sticky inflation thesis playing out, attractive entry point for SONIA curve trade
• Canada: Still see growth upside, stay short CORRA futures
• New Zealand: NZDJPY has further upside as growth still shows signs of improving
• India: Positive growth outlook and multiple compelling buy signals for equities 
• Brazil: Early signs of turning points in inflation and BCB tightening
• Poland: Fade the peace dividend, PLN looks stretched amid growing macro risks
• South Africa: Reiterating bullish ZAR on cyclical and structural tailwinds

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