4 Jul 2013
Flash: EM after the shock – Nomura
FXstreet.com (Barcelona) - Nomura strategists note that emerging markets have seen considerable volatility over the past two months, on the back of changed policy expectations from the Fed and weaker economic momentum in China.
They have examined whether this volatility has pushed EM assets into undervalued territory and find that in FX, while small pockets of value exist, few currencies stand out as being significantly cheap. Looking to EM rates, they see a similar conclusion, commenting, “Value has been created in selected short-end rate products, but no common global trading theme emerges. We are inclined to trade EM FX in an opportunistic, long-short manner going forward, and are adopting a selective tactical approach to EM rates too.”
They have examined whether this volatility has pushed EM assets into undervalued territory and find that in FX, while small pockets of value exist, few currencies stand out as being significantly cheap. Looking to EM rates, they see a similar conclusion, commenting, “Value has been created in selected short-end rate products, but no common global trading theme emerges. We are inclined to trade EM FX in an opportunistic, long-short manner going forward, and are adopting a selective tactical approach to EM rates too.”