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EM Equities Near 61.8% Fibo Support

  • Global risk off environment marked by the renewed geopolitical uncertainty, surging US Dollar and the severe lockdown policies imposed by Chinese government have been weighing on EM equities since the start of the month.
  • EM MSCI index is down over 10% since its early month high, erasing nearly all of its March gains (second half mostly driven by the surge in Chinese equities following the headline on the ‘malicious short sellers’).
  • Polish local media (OneT.PL) reported earlier that Russia has halted its gas supplies to Poland under the Yamal contract (unofficial source), which has increased the selling pressure on CEE FX and risky assets.
  • MSCI EM index is approaching its ST support at 1,018.10, which corresponds to the 61.8% Fibo retracement of the 751.80 – 1,449.10 range.
    • A break below that level would open the door for a move down to 1,000.

Source: Bloomberg/MNI

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