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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EMERGING MARKETS
- Even though the Jackson Hole meeting has been perceived slightly dovish by the market, with Powell hinting participants that the Fed will be cautious in its tapering announcement, momentum on the US Dollar could resume as we approach the fourth quarter.
- Consensus is currently pricing in the Fed to announce the tapering in November for a December start.
- Investors are now questioning how long will the tapering last for? For instance, a 15bn USD cut in asset purchases at each meeting would imply that it would take 8 meetings to end the current program (12 months), which would delay the first hike for H1 2023.
- The trajectory of the US Dollar remains very important for EM risky assets, especially equities.
- The chart below shows that the momentum on EM equities (EEM) has been bearish since February; EEM has been constantly reaching lower highs.
- Key supports to watch on the downside stand at 48.90 (low of its LT downward trending channel) and 47.52, which corresponds to the 38.2% Fibo retracement of the 30.10 – 58.29 range.
- On the topside, ST resistance to watch stands at 52.72 (50DMA), followed by 53.27 (200DMA).
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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