Emerging markets
The only thing that seems to matter for the EM, as a region: looser financial conditions.
We bought a small amount of EM equities, after that week in which the Golden Dragon ETF fell by a quarter (this is the US listed China centric stocks). That trade didn’t work so well, the index continued to fall, the region continues to struggle, and the answer of course is because rates, the dollar, and commodities continue to weigh against it.
We are nearing the end of US tightening (approaching the “peak fed funds rate”) and will be stepping down from jumbo-sized hikes, to more moderate one’s, before an eventual pause.
At that stage, we will likely nibble further at EM equities. Of course, should China actually reopen (rather than the rumour of the past few days) we would accelerate that timeline.
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