FXStreet (Delhi) – Research Team at BBH, suggests that EM starts 2016 on a weak footing, with negative sentiment carrying over from 2015 as the global backdrop remains poor, with the Fed likely to continue its tightening cycle with another hike in March and commodity prices remain near the lows, while China data suggests that the slowdown (albeit modest) continues. Key Quotes "Idiosyncratic EM risk remains in play, but in some instances could take a bit of a breather. Brazil’s congress is effectively on holiday until well into February, and so risks of negative impeachment headlines have ebbed. On the other hand, this means no progress on fiscal measures until Q2. South African and Turkish political risk could also quiet down, but negative fundamentals remain in play for all three of these countries and support our call for further ratings downgrades. Brazil reports November IP Thursday, and is expected at -10.3% y/y vs. -11.2% in October. Brazil reports December IPCA inflation Friday, and is expected to rise 10.78% y/y vs. 10.48% in November. This would be a new cycle high and the highest since November 2003. COPOM next meets January 20, and we think the tightening cycle will restart then with a 50 bp hike to 14.75%. Mexico reports December CPI Thursday, and is expected to rise 2.10% y/y vs. 2.21% in November. This would be another record low, and further below the 3% target as well as nearing the lower bound of the 2-4% target range. The next policy meeting is February 4, and no change is expected then. Banxico officials have suggested that they will be largely taking their cue from the Fed, which is not expected to hike again until the March 16 meeting. Korea reports November current account Tuesday. The external accounts remain in good shape, more from plummeting imports than from strong exports. The economy remains soft and so we think that the BOK may tilt more dovish this year. The next policy meeting s January 14, but no change is expected that soon. Caixin reports December China services PMI Wednesday. Earlier today, Caixin manufacturing PMI came in at 48.2 vs. 48.9 expected and 48.6 in November. Last week, official manufacturing PMI came in at 49.7 vs. 49.8 expected and 49.6 in November. December foreign reserves will be reported Thursday, and are expected to fall slightly to $3.42 trln. China then reports December CPI and PPIon Saturday. The former is expected to rise 1.6% y/y while the latter is expected to fall -5.8% y/y. Malaysia reports November trade Thursday. In USD terms, exports are expected at -12% y/y and imports at -10% y/y. Exports have been contracting, but imports have kept pace and so the external accounts have not worsened much. The economy remains sluggish. While inflation remains fairly low at 2.6% y/y, the central bank is concerned about the risks from El Nino and will likely remain on hold for the time being. Turkey reports December IP Friday, and is expected to rise 4.3% y/y vs. 4.6% in October. Earlier today, CPI came in at 8.81% y/y, and is the highest since November 2014. The central bank delivered a dovish surprise last month when it remained on hold, but rising inflation should push it into hiking rates at its next meeting on January 19.” For more information, read our latest forex news.