Waiting for ‘Bolso’
Also Interesting
Emerging Markets Debt Update
Global equities suffered last week as the release of minutes from the 25–26 September Federal Reserve (Fed) policy meeting were deemed marginally hawkish, leading to a sharp reversal higher in rates on the evening of the release. There were many other reasons cited for the sell-off, including concerns around the Chinese growth outlook and worries that US earnings will peak in the third quarter, but the most plausible explanation is that the Fed hike has induced higher real rates, and all risk assets are repricing off this. Emerging market performance was actually mixed on the week, with equities suffering while fixed income markets fared better, with positive returns in EM local markets and hard currency spreads also outperforming their developed-market peers. Another trend we are watching is oil, where recent weakness bears monitoring given large speculative longs in the space.
