HALISTER1: BoFAML Buys India, Indonesia Bonds as EM Rally Matures

BoFAML Buys India, Indonesia Bonds as EM Rally Matures

(Bloomberg) -- Bank of America Merrill Lynch strategist Claudio Irigoyen remains constructive as EM fundamentals are well grounded but turns more cautious as EM rally is maturing, according to e-mailed note.
  • Likes India 5y and Indonesia 15y debt on attractive yields and low exposure to China
  • In FX, has a bias for short CNY and KRW as positioning is clean and represents an efficient hedge to geopolitical risks
  • Likes steepeners in Turkey on risk premium compression; extends duration in Ukraine USD as the curve is steep. Carry in RUB remains “attractive.” Pays 5y CZK rates and buy 5y bonds vs swaps in Hungary
  • In LatAm, likes Peruvian bonds; In Brazil and Mexico, likes steepeners and within receivers prefers real to nominal rates
    • In FX, recommends selling BRL/ARS and CLP/COP. Both trades benefit from positive carry. Keeps a bias to long USDMXN.

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Claudio Irigoyen (Bank of America Corp)

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