EM Daily:EM credit,A "less full"second half

The external backdrop has deteriorated for EM credit over the past month dueto higher core yields and lower oil prices. Despite some retail outflows led byETF redemptions, technical conditions remain robust due in part to the moresupportive supply/demand balance for the second half of 2017. Valuation remainstight after a contained widening in credit spreads. We remain marketweightand focus on idiosyncratic factors within EM for asset allocation. We moveMexico to overweight, Brazil to underweight, and cover underweight on SouthAfrica. We retain overweight on Argentina while we stay underweight Peru,Hungary and Poland on valuation, among other major EMs. Our top trade relativevalue recommendations include: PEMEX 27s vs. Mexico 27s, Argentina 2117svs. PETBRA 2115s , Argentina Pars vs. 46s, Argentina EUR Discounts vs. USDDiscounts (FX-hedged), South Africa 26s vs. 44s, Mexico 27s vs. 47s, Turkey 24svs. 5Y CDS, Argentina Pars vs. 5Y CDS, South Africa 24s vs. 5Y CDS. See EMSovereign Credit Weekly for details.