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by winston » Fri Mar 10, 2023 7:32 am
We expect equities to remain the favored asset class in nominal terms given the resilience of EM currencies and duration”.
The Bloomberg EM bond index declined 8.4% in 2022, compared with a 22% drop in MSCI EM stock index.
by behappyalways » Tue May 07, 2024 4:23 pm
by winston » Fri Aug 09, 2024 8:23 am
NON-RESIDENTS poured US$36.5 billion into their emerging market stock and debt portfolios in July, the largest inflows since January.
The Institute of International Finance (IIF) also said prospects for lower interest rates in the US further brightened the outlook for EM assets.
Debt issuance accounted for the bulk of the net inflows to EM portfolios last month, a total of US$29.4 billion, according to IIF data.
A further US$7.1 billion went to stock portfolios.
More than double June’s US$17.2 billion inflow and US$4.6 billion above July 2023.
“As inflation trends downward across the globe, many EM central banks may find the leeway to loosen their monetary stances as well. This potential shift could help stabilise EM currencies and support economic growth.”
by winston » Mon Mar 10, 2025 8:23 am
Monetary authorities in China, India and elsewhere have waged a prolonged campaign against the strong US dollar, using a mix of official reserves and opaque derivatives trades to defend their currencies. But their moves have pushed up borrowing costs for local banks just when slowing economies need more liquidity.
China’s overnight and seven-day repo rates surged in February, while bond investors took losses from a sharp rise in yields.
Banking liquidity in India suffered its highest deficit in at least 14 years earlier this year and overnight borrowing costs jumped.
Liquidity also dried up in Indonesia and Malaysia following central bank currency interventions.
The impossible trinity, the idea that countries can’t simultaneously control their currencies, independently set interest rates and allow capital to move freely across borders. Something will break or give way.
by winston » Tue Mar 25, 2025 7:11 am
As global tariff issues continue to escalate, developed countries are also beginning to experience persistent inflationary pressures.
However, because these nations have stronger national power and more favorable fiscal conditions, they have a higher capacity to withstand such pressures.
In contrast, emerging nations are in a different situation and do not have the strength to fight these challenges.
Therefore, a large-scale financial crisis is inevitable in emerging markets within this year.
by winston » Mon Jun 23, 2025 8:05 pm
by winston » Mon Feb 16, 2026 8:31 am
JPMorgan volatility indices show developing nations’ currencies have swung less than their Group of Seven peers for nearly 200 straight days – the longest stretch since 2008. If it passes 208 days, it would mark a record going back to 2000.
Strong commodity prices and robust capital inflows have supported demand for emerging market (EM) assets.
Improvements in emerging market fundamentals, relatively stronger growth than in developed economies and ample foreign exchange reserves should help keep emerging market currency volatility subdued this year.
Yen volatility has also climbed amid concerns about Japan’s fiscal outlook and possible intervention by authorities. It could face further pressure if the yen carry trade unwinds.
“Investors are looking at less volatile currencies in the emerging market space, such as the Singapore dollar, the baht and the yuan in Asia”.
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