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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
- The DXY index broke below its 50DMA support this week; the gradual consolidation in USD leaves the door open for new highs in EM equities in the short term.
- In the past year, the elevated uncertainty over the economic outlook and USD strength have been weighing on EM risky assets, which have constantly been testing lower highs since their peak reached in February 2021.
- As a reminder, the rise in Covid uncertainty, political instability in some EM markets and the hawkish Fed had supported the US Dollar in H2 2021; DXY index reached a high at 97 in the end of November before consolidating slightly lower in recent weeks.
- The probability of 4 Fed hikes in 2022 has been gradually rising in the past few months, approaching 80% in January.
- Even though more rate hikes for this year should increase the preference for the USD in the medium term (especially against Euro and Yen), the ‘big miss’ in Payrolls on Friday could increase the selling pressure on the USD in the near term, therefore supporting EM equities.
- EM equities (EEM) broke above their 50DMA yesterday, next resistance to watch on the topside stands at 50.58 (100DMA), followed by 52.10 (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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