Emerging Markets: 2019 unlikely to be smooth sailing – Nordea Markets
Analysts at Nordea Markets do not expect 2019 to be smooth sailing for emerging market currencies, even though EM FX has staged a strong comeback since mid-December fuelled by a bearish repricing of the Fed and optimism about a trade deal between the US and China.
Key Quotes
“Many downside risks remain, a sharper-than-expected decline in the Chinese economy being one of them. The trade dispute with the US is already having a negative impact on growth sentiment in China through exports and manufacturing activity. While we expect the Chinese government's increased fiscal and monetary stimulus to prevent a disorderly slowdown, the economy could struggle as prolonged uncertainty hurts business and consumer confidence.”
“Weakening momentum in China is bad for EM, as it could reduce China's imports of commodities and other goods from EM. It will also likely worsen the general risk sentiment towards EM.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
