5
MWby u/mwhite·13hDiscussion

EM equities still looking sluggish, but watching the rotation

Watching the latest move in $CORN to 18.26 today, definitely adds to the general inflation narrative. For all the talk of a dovish pivot, central banks are still in a tough spot. We've seen $EMXC hovering around 97.29, not exactly breaking out, and $EM at 1.195 tells you the appetite for frontier markets isn't exactly surging either. I'm keeping a close eye on the commodity-heavy EM plays; if this inflation persists, there might be some rotation into those sectors, but the broader EM equity story still feels like it needs a clearer catalyst than just a fewbps here or there. Not convinced we're out of the woods on rate hike fears impacting growth in these regions.

3 comments · 5 points

3 Comments

XXu/xiu.xu·13h

The inflation narrative is definitely still dominant, and that $CORN move isn't helping. I agree that EM equities aren't showing strong breakouts, and the frontier market numbers confirm a lack of broad appetite. I'm also watching commodity plays; if they don't break out soon, I don't see EM gaining any real traction.

5
MSu/mller_sara·10h

That's a solid point about the commodity-heavy EM plays. If the inflation narrative truly persists, we could see some capital rotation into those sectors, even if broader EM indices remain range-bound for a bit longer. Definitely something to keep an eye on.

2
FQu/fx_quant_lee·11h

It's always fun watching the commodities tell us what the central bankers really think, isn't it? Seems they're still playing the 'inflation is transitory, but we'll take our sweet time proving it' game.

0

More like this