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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
- Despite the bullish retracement on the US Dollar this week, momentum on EM equities has remained firm with the EEM index up nearly 9% since August 20.
- We have seen that the broad USD weakness in the end of August/beginning of September following Powell's 'dovish' speech at Jackson Hole has been supporting EM risky assets in general.
- Hence, EM equities (in addition to a broad range of commodities) remains very sensitive to the direction of the US Dollar:
- If the Fed starts to delay its tapering announcement to 2022 amid rising uncertainty over the Delta variant and the constant deterioration in economic data, the US Dollar could continue to consolidate lower, therefore supporting EM equities.
- On the other hand, if the Fed remains firm on its tapering decision with policymakers announcing it at the November meeting for a December start, preference for the US Dollar could start to accelerate again, therefore weighing on EM risky assets.
- EM equities (EEM) are currently testing a key resistance at 53.40 (200DMA); a break above that level would open the door for a move up to 54.30 (high of the LT upward trending channel).
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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