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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
- In the past few months, the surge in global liquidity combined with rising short-term rates have been supporting EM risky assets, especially cyclicals stocks such as financials.
- However, with major central banks preparing for tapering (i.e. Fed), the deceleration in liquidity at a time when uncertainty over the economic outlook remains elevated could weigh both on EM FX and EM equities in the near to medium term.
- In addition, we have seen that the significant contraction in China real money growth, which has historically acted as a strong leading liquidity indicator (6 months) for EM cyclical stocks, could also limit the upside gains in EM financials stocks in the coming months (see chart).
- Even though financial equities could appear 'cheap' according to some value scoring methods, it seems that the risk-reward is biased to the downside.
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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