EM Preview: Starting on a soft note, currencies continue to plunge – BBH

By FXStreet FXStreet (Delhi) – Research team at BBH, notes that the most of the emerging market assets have started the current week on a softer note with many EM currencies hitting new multi-year lows or all-time lows.

Key Quotes

“In a familiar refrain, EM assets are starting off the week on a soft note, with markets picking up where the left off on Friday. With China markets reopening after a two-day holiday, the Shanghai dropped -2.5% and has fed into wider EM equity losses.”

“MSCI EM is down two straight days and five of the past six. The strong US jobs report Friday also brings the Fed lift-off back into focus. Many EM currencies are either making new multi-year lows (IDR, MYR) or making new all-time lows (BRL, TRY). We see more and more currencies following suit in the coming weeks.”

“Besides the negative global backdrop, idiosyncratic risks remain in play for some of the major EM countries. Political risk is elevated in Turkey, for instance, after another PKK bombing killed several Turkish soldiers.”

“Concerns about Finance Minister Levy resigning are also likely to continue weighing on Brazil markets. All in all, we remain negative on EM due to the …read more

Source:: FX Street