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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 year, the sharp increase in ST interest rates combined with the rise in global liquidity have been the major drivers of EM financial stocks.
- However, the worsening economic outlook amid rising Covid uncertainty combined with the significant rise in LT interest rates could start to weigh on banks' profitability in the near term.
- In addition, we previously saw that the drastic fall in China real money growth (defined as the difference between M1 growth and PPI inflation) is pricing in further weakness in financial equities.
- The chart below shows that China real M1 has historically strongly led EM financial equities by 6 months.
- EM Financials (MXEF0FN Index) have been consolidating lower this month, currently trading slightly above their 200DMA (337.80); a break below that level would open the door for a move down to 330 (LT upward trending support line).
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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