Sanctions on Russia’s foreign currency reserves will likely stymie the rise of the Chinese renminbi as a competitor to the U.S. dollar.
Natural herd immunity in predominantly young emerging markets populations looks set to offset slower vaccine rollouts, setting the stage for a resurgence in economic growth.
China’s economy should see a soft landing as stimulus is reduced, but the drag on global growth may place a burden on developed economies to keep stimulus taps open for longer.
A confluence of dynamics are set to accelerate global capital flows to emerging markets amid attractive valuations.
In prioritizing stability over all other objectives, China is borrowing from future growth while reducing policy ammunition to counter future shocks.
The market consequences of direct intervention by the U.S. could be substantial and thus bear consideration.
While we are constructive on the prospects for emerging markets in the year ahead, we think the real potential lies in individual country and thematic opportunities.
In recent months China has rolled out tax cuts and incentives to boost consumption over investment while taking steps to further open its capital markets – a shift in approach that seems to accept a natural slowing in growth over time and to acknowledge the costs of an overreliance on credit growth.
The incoming Mexican government’s costly plan to cancel the new Mexico City airport has fueled concerns that President-elect Andrés Manuel López Obrador will enact a populist agenda and squander the country’s sound financial position.
One truism spanning the last three decades has been that emerging markets are a leveraged play on global growth – often outperforming when developed markets (DM) are growing but susceptible to sharp downturns when DM conditions are less favorable.
Forecasting currency performance is like predicting the outcome of a horse race. Currencies move up the field and then fall back depending on their respective country conditions. And once in a great while, a very strong contender dominates the field – much like the winner of the Triple Crown.
During the second most significant repricing in U.S. Treasury bond yields since 2013, emerging market debt has so far significantly outperformed equity, oil and U.S. Treasury beta.
With a steady repricing of global bond markets having contributed to a sharp plunge in global stock markets, there could be a whiff of a new era in the air.
After a strong run in emerging markets through the first nine months of 2017, a recent performance setback in local bond markets has led some investors to fear that the recovery cycle may be short-circuiting. Is the two-month run of underperformance in EM local markets an opportunity or a canary in a coal mine?
The use of credit to fuel growth in China is weakening, a trend that has begun to depress demand for imports. Given China’s seminal role as an engine of global growth, the ripple effects will weigh on growth prospects for the countries most exposed to Chinese demand, including those in Asia and Latin America.
Bond investors are from Mars, and central bankers are from Venus – or so suggests the bond market’s negative reaction to signals that the exceptional monetary policy accommodation of the last decade is winding down. Risk-asset markets, however, are ignoring the red flags that the bond markets are waving. Are they right?
Five years ago this week, Mario Draghi’s landmark “whatever it takes” speech turned the tide of the euro crisis, the president effectively clarifying the European Central Bank’s role as a conditional lender of last resort to eurozone sovereign borrowers.
Why falling commodity prices may not upend the EM rally.
By focusing so intensely on U.S. political developments, investors risk missing a silent shift in what has arguably been the strongest driver of global reflation in the last five years:...
While Chinese growth looks stable into early 2017, a more marked slowdown by the second quarter appears inevitable.
For much of 2016, a unique alignment of push and pull factors has driven strong performance in emerging markets (EM). The election of Republican Donald Trump and Republican majorities in the U.S. Congress on 8 November, however, represents a pivot point.
