Overall conditions in Emerging Markets’ (EM) manufacturing sectors eased marginally in January but stayed very supportive as indicated by the EH EM Manufacturing PMI at 52.0 points (52.2 in Decem-ber). Some large EM such as China and India showed a loss of momentum but overall there were more improvements (10) than deteriorations (5) in our sample of 15 EM. Moreover, open EM still exhibited a steady increase: their aggregate PMI reached 53.7 in January (53.0 in December), the best figure since March 2011. This reflects that the favorable trade momentum during the last quarters triggered an acceleration of domestic demand. Capacity utilization rates have increased and reached highs in many economies, which has two possible consequences. First, it has fueled a positive momentum (and outlook) for private investment. Second, it may hamper near-term growth as a result of labor scarcities, an overheating syndrome and related inflationary pressures. As a result, the monetary policy stance is likely to become more hawkish, mainly in Asia-Pacific, but also in Eastern European EU countries. Both the Czech Republic and Romania hiked their key policy rates by +25bp over the past week.