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28 May 2013
Flash: EM views in a messy environment - Nomura
FXstreet.com (Barcelona) - Nomura strategists note that on the EM FX front, they think it is time to think fresh.
They comment that they have been involved in various long EM baskets for more than six months and their initial global basket delivered strong returns, although entirely driven by gains on funding currencies. Their second global basket has largely traded in a range for the past two months, and they are becoming increasingly uncomfortable with the general notion of broad-based EM gains. On this basis, they are closing out our global EM basket, and looking to make related adjustments in other thematic EM positions in short order. They write, “Instead, our strategy will focus on long/short opportunities in the EM space. One theme to consider carefully in this context is how the EM complex will respond to a withdrawal of Fed stimulus.”
They comment that they have been involved in various long EM baskets for more than six months and their initial global basket delivered strong returns, although entirely driven by gains on funding currencies. Their second global basket has largely traded in a range for the past two months, and they are becoming increasingly uncomfortable with the general notion of broad-based EM gains. On this basis, they are closing out our global EM basket, and looking to make related adjustments in other thematic EM positions in short order. They write, “Instead, our strategy will focus on long/short opportunities in the EM space. One theme to consider carefully in this context is how the EM complex will respond to a withdrawal of Fed stimulus.”