by David Hill | Nov 27, 2019 | Emerging Markets
We continue to favour EM sovereign debt as an alternative to stretched developed-market debt. We like the higher initial yields on offer and potential capital upside from monetary easing and rolldown from steeper yield curves (top-left chart). If we looked only at...
by David Hill | Nov 6, 2019 | Emerging Markets
Since the peak back in April, most EM equities markets have seen declines or consolidation (top-left chart). The temptation is to view this as a buying opportunity to front-run more aggressive central bank easing (especially from eg the PBoC in China). Although we...
by David Hill | Jun 21, 2019 | Asia, Emerging Markets
Exit polls predict that Modi should return to power in India with another 5-year term. The election was a blot of uncertainty on the landscape but, barring a Modi loss (votes are counted on the 23rd May), it should mean no major deviation from the root-and-branch...
by David Hill | Nov 30, 2018 | Emerging Markets
We have previously highlighted that despite the global equity selloff there has been only a marginal decline in flows to emerging market equity ETFs, which suggests that investors remain committed for the time being. We have dug further into fund flows for Brazil and...
by David Hill | Sep 28, 2018 | Emerging Markets
In an almost textbook fashion, a stronger dollar and rising US rates has triggered a broad emerging market sell-off and surge in volatility. However, somewhat atypically there is little evidence so far of foreign capital bolting for the exit, despite the gradual...
by David Hill | Jun 14, 2018 | China, Emerging Markets
Our macro-driven model of expected industrial commodity returns (the CRB Raw Industrials Index includes non-exchange traded commodities such as burlap, rubber and lead scrap) has turned persistently negative, triggering the regime to shift to bearish from neutral (top...
by David Hill | Jun 7, 2018 | Emerging Markets, Global Economy
With the rise in the USD, UST yields and LIBOR-OIS, it is key to know where most offshore dollar leverage lies. The top-left chart shows the big picture – worldwide, there is over $14 trillion of USD claims held outside of the US (BIS data). Most of these are...
by David Hill | Mar 16, 2018 | Emerging Markets
EM CPI inflation is at multi-year lows at present (top chart), with a clear divergence between world food prices and EM CPI. Food tends to be one of the main components of EM inflation baskets, on average accounting for a 30% weighting. A lot of agricultural...
by Bill | Feb 26, 2014 | China, Emerging Markets, Featured, Global Economy
Many emerging markets were in recession last year and are only slowly emerging. Tight financial conditions and flat to inverted yield curves will make the recovery slow and fraught with risks. Global growth will be lower as a result. Flattening and inverted yield...
