The rebound came after the unexpectedly long-lasting massive sales episode that has affected emerging assets this year
Volatility in other asset classes is at more moderate levels
Richard Turnill, Global Head of Investment Strategy at BlackRock, believes there is room for the recovery in emerging markets last week to persist, especially in the equity segment.
The rebound came after the unexpectedly long-lasting massive sales episode that has affected emerging assets this year, despite the strength of short-term global growth prospects.
"The shocks originating in certain countries and the restriction of financial conditions throughout the world put pressure on those markets in the emerging sphere that present greater external vulnerabilities. However, we do not believe that the reverse suffered by this universe constitutes a threat of greater significance for global markets, "says Turnill.
Emerging currencies have been the most affected by the recent episode of massive sales. Its volatility increased drastically in recent times to reach levels higher than those recorded during the 2013 taper tantrum , when the then Federal Reserve Chairman, Ben Bernanke, signaled the beginning of the end of the new purchases of assets by the institution monetary (orange line in the graph).
However, recalls Turnill, volatility in other asset classes is at a more moderate level, in both emerging and developed markets, as the chart shows.
The currencies also showed certain signs of stabilization, and the rises of emergency types in Turkey prevented a drastic massive sale in the lira. "We consider this to be a positive sign for emerging assets as a whole," he concludes.
SUBMITTED BY By Funds Society, Miami