For more information please contact us

ashmail [at] ashmoregroup [dot] com (Email Ashmore)

Revealed preference

The Emerging View

09 October 2014

Developed economies are still accumulating debt, making it tougher to tighten monetary policy and to grow. Recently, the market has been pricing in a policy mistake by the Fed – evident in lower breakeven inflation, rising real yields, bigger risks for credit markets, weaker stock markets and a stronger Dollar. We think the true preferences of central banks in developed economies for supporting the recovery are easily revealed by market weakness. Emerging Markets (EM) asset prices and currencies have – as always – been buffeted by the shifting sentiments about the US, Europe and Japan, but fundamentals in EM have hardly changed relative to the heavily indebted developed countries. In our view this makes current valuations in EM attractive now, especially in local markets. The recovery from the Taper Tantrum last year has only been interrupted, not derailed.

Full article

Latest Insights

View all