5 Jan 2015
Continued divergence across emerging markets – BBH
FXStreet (Barcelona) - The Brown Brothers Harriman Team note that the emerging markets are likely to remain vulnerable in the first half of 2015, expecting the probable Fed rate hike in 2015 to generate a mixed reaction across the EM asset classes.
Key Quotes
“Emerging Markets (EM) are likely to remain vulnerable as we start off 2015, but we believe EM assets could gain some traction in the second half. Until then, we are in for a very bumpy ride.”
“In addition to the well-telegraphed Fed rate hike in 2015, EM also has to grapple with lower commodity prices, the weak yen, and a slowing China.“
“The impact of these developments will vary across the EM asset class, generating some winners and some losers. Policy responses will also differ across EM and, as always, fundamentals will matter in terms of winners and losers in the EM space.”
“We believe several EM countries are edging closer to default, including Ukraine and Venezuela, but the good news is that neither poses systemic risk to global markets.”
Key Quotes
“Emerging Markets (EM) are likely to remain vulnerable as we start off 2015, but we believe EM assets could gain some traction in the second half. Until then, we are in for a very bumpy ride.”
“In addition to the well-telegraphed Fed rate hike in 2015, EM also has to grapple with lower commodity prices, the weak yen, and a slowing China.“
“The impact of these developments will vary across the EM asset class, generating some winners and some losers. Policy responses will also differ across EM and, as always, fundamentals will matter in terms of winners and losers in the EM space.”
“We believe several EM countries are edging closer to default, including Ukraine and Venezuela, but the good news is that neither poses systemic risk to global markets.”