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Citi: What Is Wrong With EMFX?

EMERGING MARKETS

Citi have noted that "EMFX is underperforming its major macro drivers. Carry is not to blame. The current account factor is performing on the margin in the absence of large capital account inflows. It is rare for outflows out of local EM during times of DXY weakness. It may take better vaccine news as a trigger for inflows. The team remains bullish on EMFX in Asia, more cautiously positive in Latam, and negative in CEEMEA. In rates, the team owns duration selectively, focused on Asia. Credit is likely to grind tighter."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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