Some 68% of Spain’s multinationals and 47% of SMEs present in Latin America expect to generate more revenue in the region than in Spain in a period of three years,
During the second most significant repricing in U.S. Treasury bond yields since 2013, emerging markets debt, especially local currency bonds, has so far significantly outperformed equity, oil and U.S. Treasury beta. PIMCO’s analysts believe this resilience in EM reflects the resolution of most balance-of-payments issues over the past few years.
In his first congressional testimony, Jerome Powell delivered an upbeat appraisal of the US economy. In his own words, headwinds have turned into tailwinds. While avoiding any commitment on the plausible monetary stance, markets have discounted a faster pace in rate hikes, pushing bond yields to fresh highs.
In the mind of many investors, frontier markets are a black box of uncertainty, characterised by unstable leadership, volatile currency, and questionable corporate governance. However, broad investor aversion has created some of the most compelling bottom-up investment opportunities of any asset class.
Coco Feng via Caixin | The U.S., Australia, India and Japan are discussing formation of a joint regional infrastructure-building initiative, attempting to counter similar Beijing-led efforts aimed at boosting developing market economies, according to an Australian media report.
The collapse in the “greed index”, the exchange traded note XIV that was an inverse of the VIX, was behind the speed and magnitude of the drawdown in equities over last weeks, but was simply amplifying an existing fragility that has grown out of the post GFC obsession with low volatility. This is just “market mechanics”, as explained by Mark Tinker Chief Economist at AXA IM Framlington Equities Asia in one of his last notes.
After twenty years of similarity between 10-year rates in the US and Germany, for the last six years there has been a growing decoupling of the US rate, reaching a spread of 2%. So what are the macroeconomic differences justifying such behaviour? Germany’s huge savings play a big part.
After thirty years, with the MSCI emerging markets at a historical high, having outperformed developed markets for the past two years. What should we expect going forward ?
After US inflation beat estimates in January, it’s likely the market will end up putting even more emphasis on the possibility of seeing inflation rates higher-than-expected months ago, or even stagflation. And, unfortunately, this will continue to spark potential over-reactions which would give way to strong, quick movements.
Atul Singh and Manu Sharma | The Indian government’s latest budget courts the poor with an indigenous brand of socialism that relies on financial transfers and private provision of services in an election year.