We’ve talked incessantly about the risk of getting too complacent in emerging markets after a stellar Q1 for anything with an “EM” prefix.
Those who need (or want) a refresher are encouraged to see the latest here:
Simply put, there’s every reason to believe what we’ve seen so far this year in EM is unsustainable, although in a note out Tuesday, Deutsche Bank seems to disagree. To wit:
So we suppose that’s something of a counterargument.
But for those who, like Bloomberg’s Mark Cudmore in the third post linked above, think we might be due for something of a “painful cleanout,” BofAML has what the bank calls “4 key factors which argue for a more nuanced view” on risk assets going forward. Note that point #1 is precisely the same point we made here.
Also, this is supposed to be applicable to risk assets in general but as you’ll see, there’s a particular emphasis on EM. More below…
Via BofAML
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