Halister News

(Bloomberg) -- “We do not think the Q1 EM rally has initiated a period of sustained outperformance by EM equities,” analysts at Barclays including Ajay Rajadhyaksha say in e-mailed note.

• “Emerging-market equities were an improbable hero of Q1” but it wasn’t broad rally as large Asian markets lost ground through mid-March
• “We are sceptical that the Q1 rally in commodities, in particular oil, will persist into Q2”
• “Both commodity-intensive and manufacturing economies are

at risk of continued pressure from an extended period of weak demand growth from China”

• “Although fear of the Fed has at times been exaggerated, a new possible round of dollar strength against EM currencies remains a threat that should cap further upside”
• Fundamental backdrop for bonds, FX “only marginally better than for equities”
  • “But like Q1, the asset class has pockets of underappreciated value in sovereign, quasi-sovereign, and corporate credit”