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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
- Since the start of the year, we have seen that a rise in the USD amid elevated uncertainty and the divergence in growth expectations between US and the EM economies (where vaccination rate has been 'low') has been one of the major risks for EM equities.
- After peaking in February (which also corresponds to the peak in Chinese economy), EM equities have been trending lower in the past 8 months, constantly reaching lower highs.
- On the other hand, the elevated inflationary pressures have been supporting commodities, with the CRB RIND Index recently trading at new all-time highs.
- This chart shows a strong co-movement between raw industrial commodities (CRB RIND Index) and EM equities (MXEF Index), and investors have been questioning if the divergence we have seen in recent months could continue in the medium term.
- Hence, can the firm trend in commodities support EM equities despite appreciating US Dollar?
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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