What Does the Fed Pivot Spell for Major Markets?
Expectations for Fed policy continue to drive global bond, equity, and FX markets. that is why we think it is crucial to get the call right, as everything else should fall into place. Despite the recent shift in market expectations, our Fed call remains unchanged: we are not yet nearing the end of the tightening cycle.
China’s Reopening and What it Means for Emerging Markets
China’s abrupt abandonment of its Covid Zero policy in December 2022 has fed into optimism that the world’s second largest economy will get back on track after last year’s subpar growth. The MSCI EM has rallied nearly 25% since the October trough, when it traded at the lowest since April 2020. However, it has only recouped about 30% of its losses from the February 2021 peak. Part of this rally is due to the Fed pivot story, while the other part is due to China reopening.
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