(from my colleagues Dr. Win Thin and Ilan Solot)

Overall, the investment climate for EM is likely to remain negative in this strong dollar environment. Weaker than expected official China PMI over the weekend didn't help matters. Indeed, most of the Asian PMI readings out already came in weaker than expected, with Korea and Indonesia coming in below 50. Expect further deterioration in EM sentiment ahead.

As we wrote last week, the weaker yen has negative implications for EM exporters, particularly in Asia. Taiwan reported weaker than expected Q3 GDP last week, and we expect softer regional data to continue. While we do not see a hard landing in China, neither is it likely to provide much in the way of positive headlines ahead. We downplay talk of more large-scale stimulus by China.

Brazil reports October trade to start the week. It then reports October FIPE inflation and September IP on Tuesday, with the latter seen at -1.9% y/y vs. -5.4% in August. COPOM minutes from last week’s meeting (when it surprised markets with a 25 bp hike) will be released Thursday. October IPCA inflation will be reported Friday, expected to rise 6.66% y/y vs. 6.75% in September. Minutes and IPCA print should give markets a better idea of how much tightening to expect ahead.

Mexico reports October PMI on today. Manufacturing seen at 52.5 vs. 52.7 while non-manufacturing seen at 52.0 vs. 51.8. October consumer confidence will be reported Wednesday, expected at 91.2 vs. 91.8 in September. Mexico then reports October CPI Friday, headline expected to rise 4.30% y/y vs. 4.22% in September. Last Friday, Banco de Mexico kept rates steady at 3%, as expected. The statement was balanced, and suggests it is no hurry to move rates in either direction. It continues to view the current above-target inflation as temporary, and we agree.

Korea reports October CPI on Tuesday, expected to rise 1.3% y/y vs. 1.1% in September. Core is seen steady at 1.9% y/y. BOK just cut rates 25 bp in October, and is unlikely to cut again so soon at its November 13 meeting. However, continued softness in inflation will give BOK cover to cut again in the coming months. This is especially so in light of renewed yen weakness, which will pressure Korean exporters. October PMI was reported over the weekend at 48.7.

Romanian central bank meets Tuesday and is expected to cut rates 25 bp to 2.75%. Earlier today, September retail sales were reported at 5.8% y/y vs. 5.6% in August. On Friday, Romania reports September industrial sales. Inflation is starting to turn higher, but the central bank is clearly focused on growth right now as it has cut rates two straight months and is in the midst of an extended easing cycle.

Taiwan reports October CPI on Wednesday, expected to rise 1.2% y/y vs. 0.7% in September. WPI will also be reported, seen at -0.43% y/y vs. -0.67% in September. Taiwan then reports October trade on Friday, with exports seen rising 4.9% y/y and imports seen rising 4.5% y/y. Export orders have been growing nicely, up % y/y in September and pointing to ongoing firmness in exports.

Philippines reports October CPI on Wednesday, expected to rise 4.2% y/y vs. 4.4% in September. Core is seen easing to 3.3% y/y from 3.4% in September. We believe the central bank’s tightening cycle has ended after the last 25 bp hike in September. Lower commodity prices should start to filter into the CPI, while growth headwinds are growing.

Indonesia reports Q3 GDP Wednesday, with growth expected to remain steady at 5.1% y/y. October CPI inflation accelerated to 4.83% y/y from 4.53% in September. Bank Indonesia appears unlikely to move rates until after fuel subsidies are cut, but we think the central bank will lean more dovish in early 2015. Lower commodity prices should start to filter into the CPI, while growth headwinds are growing.

Thai central bank meets Wednesday and is expected to keep rates steady at 2.0%. Earlier today, Thailand reported October headline CPI at 1.48 vs. 1.6% y/y consensus and 1.75% in September. Core eased to 1.67%. If the economy remains soft, we think the BOT will resume cutting rates in the coming months. Data reported last week remained very weak. Private investment contracted -5% y/y and IP -3.9% y/y. Exports and private consumption showed small y/y gains, but the overall outlook remains soft. BOT has not cut rates since the last 25 bp move back in March, but we think more easing will be seen in the months ahead.

Czech Republic reports September retail sales on Wednesday, expected to rise 5.3% y/y vs. 2.7% in August. It then reports September trade (CZK14 bln consensus) as well as industrial (4.4% y/y consensus) and construction output on Thursday. The central bank then meets later on Thursday and is expected to keep rates steady at 0.05%. It is possible that it will extend its forward guidance for maintaining the EUR/CZK floor, which it currently says it won’t exit before 2016.

Hungary reports September retail sales on Wednesday, expected to rise 2.8% y/y vs. 2.5% in August. It then reports September IP on Thursday, expected to rise 5.9% y/y WDA vs. 2.9% in August. September trade will be reported Friday, seen at EUR800 mln vs. EUR279 mln in August. Even though the central bank signaled an end to the easing cycle, low inflation gives it cover to cut rates again if headwinds to growth get too strong.

Polish central bank meets Wednesday and is expected to cut rates by 25 bp to 1.75%. Governor Belka has said that easing should be completed by year end, which supports our view of a 25 bp cut in both November and December that would result in 100 bp of total easing in Q4. Even though the economy is in decent shape, headwinds are growing stronger and policymakers are being proactive.

Colombia reports October CPI Wednesday. CPI is expected to rise 3.02% y/y vs. 2.86% in September. This is still near the center of the 2-4% target range. We think the tightening cycle will remain on hold after the 25 bp hike in August. Minutes from the October 30 meeting come out November 14, while the next policy meeting is November 28 (no move then is expected).

Malaysian central bank meets Thursday and is expected to keep rates steady at 3.25%. Malaysia then reports September trade on Friday, with exports seen rising 3.0% y/y and imports seen rising 9.1% y/y. With inflation set to fall and growth starting to slow, we think the tightening cycle is over after the 25 bp hike in July.

Chile reports October CPI and trade on Friday. CPI is expected to rise 5.0% y/y vs. 4.9% in September, while the trade surplus is seen at $800 mln. We think the easing cycle is on hold after the 25 bp cut in October. Next meeting is November 18, no move then is expected after four straight months of cuts. Central bank minutes and comments out on Monday confirm that the easing cycle is on hold, with the bank saying it has done its best to stimulate and is now starting a period of evaluation of the economic data as it comes in.