9 Jun 2015
Negative stance in EM FX, assets – BBH
FXStreet (Edinburgh) - The research team at BBH keeps the negative bias when comes to EM FX and EM assets.
Key Quotes
“We remain negative on EM FX. However, we do not see this rise in yields as a trigger for another sharp selloff in EM currencies. Yes, many EM currencies will come under pressure if and when the dollar strengthening trend resumes, but we doubt the moves will be as dramatic as those seen towards the end of last year, for example”.
“Until we see the Fed lift-off (our call is September), we believe EM assets will continue to trade with a negative bias, even though a Fed hike is largely priced in. So we could see EM get some traction in Q4 if the Fed is successful in calming markets after it starts tightening. With the Fed expected to tighten at a very modest pace, and with the ECB and BOJ QE continuing into 2016, EM yields should eventually prove to be attractive”.
Key Quotes
“We remain negative on EM FX. However, we do not see this rise in yields as a trigger for another sharp selloff in EM currencies. Yes, many EM currencies will come under pressure if and when the dollar strengthening trend resumes, but we doubt the moves will be as dramatic as those seen towards the end of last year, for example”.
“Until we see the Fed lift-off (our call is September), we believe EM assets will continue to trade with a negative bias, even though a Fed hike is largely priced in. So we could see EM get some traction in Q4 if the Fed is successful in calming markets after it starts tightening. With the Fed expected to tighten at a very modest pace, and with the ECB and BOJ QE continuing into 2016, EM yields should eventually prove to be attractive”.