"We expect continued solid returns for emerging market debt (EMD) over the next six to 12 months, driven by healthy fundamentals, a supportive net issuance level and attractive valuations. "
Our view over the past few quarters has been that EURUSD should be rangebound, as the cyclical outperformance of the US economy is offset by the eurozone’s relatively better balance of payments position.
As of last week, the partial government shutdown is officially the longest shutdown on record.
We enter the second quarter with a constructive view on emerging markets debt (EMD). In our view, the combination of a dovish Federal Reserve (Fed)*, Chinese stimulus and a stable servicing backdrop should lead to a stable returns profile
Market sentiment towards the Chinese currency has shifted significantly
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EURUSD should be rangebound
A greater percentage of negative yielding bonds has reignited the hunt for yield as investors look for higher yields in riskier asset classes.
Equities continue to look attractive relative to fixed income, and could very well move higher in the short-term given firmer economic data and a Fed on hold.