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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
- Risk-on environment have been supporting risky assets this month, partly driven by the sharp depreciation in the Japanese yen.
- EM financials have been testing new highs this week, with MXEF0FN Index breaking above its 349 resistance and currently trading at its highest level since early June.
- Even though cyclical stocks may be supported by the rise in LT bond yields, driven by growing concerns over stagflation risks, the reintroduction of new Covid restrictions combined with the significant fall in liquidity could start to weigh on financials in the medium term.
- This chart shows that the drastic contraction in Chinese real M1 money growth, which we compute as the difference between the growth in money supply in PPI inflation, has been pricing in lower financial equities in recent months.
- Can the divergence persist in the medium term?
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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