Our directional signal for EM bonds has turned neutral for the first time since October 2013
• Foreign holdings of EM bonds are stabilising; EM bond funds redemptions/outflows remain negative
• Our EM/DM spread signal is neutral; foreign investors...
Foreign mutual funds are selling EM bonds, but foreign structural investors are still buying
• Mexican and Indian markets are being bought: we maintain our Positive local bond outlook on INR bonds
• We now track local and foreign positions in Nige...
Foreigners are sellers of THB, TRY, ZAR and KRW bonds; buyers of IDR and MXN bonds
• Our carry-sensitivity indicator reaches new lows; EM/DM bond spreads to remain wide
• Foreign holdings of EM bonds are flat, suggesting that sovereign investors ...
Our directional signal for EM bonds has turned negative for the first time since July
• Outflows from EM funds are accelerating, hurting risk appetite and triggering EM bond selling
• Fundamentally, we are neutral on EM bonds, as we expect Fed QE ...
• We previously analysed aggregate foreign positioning in local currency in SC FIRST, assessed our own data sources for a more accurate fund-flow analysis, and generated insights on foreign-investor heterogeneity
• We can now generate insights on d...
• SC FIRST signals little active risk appetite on debt-ceiling worries
• Relative-value signal turns positive for ZAR bonds; we have raised our ZAR duration outlook to Overweight
• Direction signal is neutral for EM bonds for the third month, supp...
To paraphrase Mark Twain, the reports of the death of EM bond markets have been greatly exaggerated. Increased global allocations to local EM bond markets have been not cyclical but primarily structural in nature, reflecting these markets’ rising ec...
Client conversations indicate that access issues for Indian bonds extend beyond capital controls, although index eligibility criteria appear to stipulate capital controls as the sole reason for exclusion
• We review these issues and compare India w...
Spread signal is positive for EM versus DM bonds as foreign investors become more carry-sensitive
• Relative-value signal turns positive for IDR bonds; we have raised our IDR duration outlook to Neutral
• Direction signal stays neutral for second...
Direction signal for EM bonds turns to neutral from negative; investors should cut EM underweights
• Spread signal turns positive for EM versus DM bonds as foreign investors become more carry-sensitive
• Relative value signal turns positive for I...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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