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13 Feb 2014
Flash: Better sentiment in EM's space temporary? - BAML
FXStreet (Barcelona) - Albert Leung, Emerging Asia FI Strategist at Bank of America Merrill Lynch, suggests the EM could still face headwinds in the medium-term.
Key Quotes
"After the strong correction late January and early February with markets focusing on issues in China, Turkey and Argentina, risk assets have recovered in the past few days. Asia equity markets are now 4-5% higher from a year low and a number of Asian currencies are back to flat against the USD year-to-date."
"The risk rebound following only a mediocre nonfarm payroll last Friday suggests positioning was too light. A more stable China sentiment should give further lift to carry trades near-term, even though medium-term some EM headwind remains."
Key Quotes
"After the strong correction late January and early February with markets focusing on issues in China, Turkey and Argentina, risk assets have recovered in the past few days. Asia equity markets are now 4-5% higher from a year low and a number of Asian currencies are back to flat against the USD year-to-date."
"The risk rebound following only a mediocre nonfarm payroll last Friday suggests positioning was too light. A more stable China sentiment should give further lift to carry trades near-term, even though medium-term some EM headwind remains."