FX: USD strength and growth optimism boost Asian currencies
- months supported by a continued improvement in global risk appetite. On EM FX markets it is notable that the dollar-sensitive Asian currencies have been doing quite well supported by continued strong optimism about the outlook for the Asian economies and the recent rebound in the dollar.The overall bullish sentiment has continued in most Emerging Markets over the past
Rates and yield: Higher G3 yields up EM yields
- As we are approaching the beginning of scaling back of Quantitative Easing G3 yields have started to move upwards. This in general has also pushed up EM yields over the past month. Most notable in our view has been the tightening of monetary policy in China where the PBOC has tightened reserve requirements and hiked interest rates, which is a pretty clear indication that Chinese monetary conditions will be tightened further and that the renminbi will be revalued in the coming months.
Bullish sentiment in EM stock markets
- The overall sentiment has stayed positive in the Emerging Markets stock markets despite - what some consider - the quite stretched valuations of most of those markets. The best performing EM stock market over the past month has been Turkey, which has been boosted by continued speculation about an IMF deal for Turkey.
