6 Apr 2015
EM FX firm as USD remains on the defensive – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team comments on the EM market performance and further note that the improving EM trend will continue over the next several weeks.
Key Quotes
“EM currencies are starting the week off firm, helped by the weak US jobs data on Friday. While we continue to see the US economy’s weakness in Q1 as transitory, risk sentiment should remain fairly strong near-term as Fed rate hike expectations have been pushed out further.”
“There are no major US data points until next week, when March retail sales will be reported. This could give EM some further upside potential this week.”
“The MSCI World Index (Developed) has outperformed the MSCI Emerging Markets Index over the past six months, but has begun lagging recently. This improved trend for EM is poised to continue over the next several weeks.”
“However, it is mostly tactical and opportunistic for EM, as we remain concerned about the end of commodities super-cycle, slower growth in China, and the impact of higher US rates eventually.”
“We continue to favor Asia and Eastern Europe over Latin America.”
Key Quotes
“EM currencies are starting the week off firm, helped by the weak US jobs data on Friday. While we continue to see the US economy’s weakness in Q1 as transitory, risk sentiment should remain fairly strong near-term as Fed rate hike expectations have been pushed out further.”
“There are no major US data points until next week, when March retail sales will be reported. This could give EM some further upside potential this week.”
“The MSCI World Index (Developed) has outperformed the MSCI Emerging Markets Index over the past six months, but has begun lagging recently. This improved trend for EM is poised to continue over the next several weeks.”
“However, it is mostly tactical and opportunistic for EM, as we remain concerned about the end of commodities super-cycle, slower growth in China, and the impact of higher US rates eventually.”
“We continue to favor Asia and Eastern Europe over Latin America.”