Emerging markets: Resilient cycle shift – HSBC
|HSBC Asset Management highlights that Emerging Markets have weathered higher Oil prices and a stronger Dollar better than in past cycles, thanks to stronger policy frameworks and diverse country exposures. The report notes improved real yields, firmer fiscal positions and anchored inflation expectations, arguing EM assets now function as a higher-quality, diversified building block in global portfolios.
EM assets show structural resilience
"Emerging markets (EM) have proved remarkably resilient to the twin shocks of surging oil prices and a stronger US dollar – a combination that was once a recipe for widespread stress."
"Compared to the pre-Global Financial Crisis era, EM economies absorb stress much better today. Capital outflows are muted, currency weakness translates into less inflation, and the overall hit to growth is generally smaller."
"Meanwhile, real yields in many emerging markets remain attractive versus developed markets and fiscal positions have generally strengthened. Together with improving central bank credibility, this is helping to anchor inflation expectations when external conditions become choppy."
"Divergence between countries is a big part of the story. Commodity exporters like Brazil and Colombia have benefitted from higher oil prices."
"India is a big energy importer, but also benefits from a very strong structural growth story over the long term."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.