By Gustavo Medeiros, Ben Underhill
The Emerging View

Emerging market resilience tested by energy shock and Fed hikes

The Fed is tightening into an energy shock, a combination that has triggered EM crises before. This time the reaction has been muted. We explain why, and the four questions that will shape the outlook from here.

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Weekly investor research

Bond yields fall as AI financing concerns drive risk-off move

Core CPI surprised to the upside, yet Treasuries rallied as semiconductor and AI-credit stress drove a flight from risk. Plus: Saudi Arabia under daily Houthi fire, the IMF’s India upgrade, MSCI’s Indonesia warning and Bolsonaro’s narrowing lead.
Weekly investor research

US CPI up next for bonds, while stocks pivot to Q3 earnings

Core CPI should stay benign even as the headline rises, while Q3 earnings must justify a market concentrated in AI. Plus: Trump’s energy ceasefire, Bolsonaro’s poll lead, Malaysia’s budget and Ghana’s upgrade.

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Vaccine developments, big improvements in economic activity and more benign geopolitics bode very well for returns across EM markets in 2021, notably for EM equities.
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The 2020 Triple Shock of coronavirus, crashing commodity prices and spread widening reminded many investors that segments of Emerging Markets (EM) fixed income can be extremely volatile during bouts of risk aversion.
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US elections and EM

Noise levels are likely to remain elevated in the run-up to – and possibly in the immediate aftermath of the upcoming US presidential election