US 10Y yields are up 70bp on the year, after retracing some over the last few weeks.
How is the alleged EM taper tantrum going? (4 tweet thread)
How is the alleged EM taper tantrum going? (4 tweet thread)
It is a mixed bag, not all EMs are the same, but the most liquid crosses are interesting. Starting with South Africa:
the ZAR is appreciating strongly in recent week, and now clearly at a new post-COVID-shock high vs the USD (=USD at the lows...)
the ZAR is appreciating strongly in recent week, and now clearly at a new post-COVID-shock high vs the USD (=USD at the lows...)
The MXN saw some volatility in Feb and early March, but is quickly approaching the strongest post-covid-shocks levels again, as seen in January
The rest of EM is very mixed (India dealing with its COVID surge, Russia dealing with its sanctions, Brazil dealing with its debt).
But that is not a function of US rates: there is no global tantrum to see, although that is not the same as saying that US rates are irrelevant.
But that is not a function of US rates: there is no global tantrum to see, although that is not the same as saying that US rates are irrelevant.
Relatedly, overall EM fixed income flows are 'normal' looking at the YTD trajectory relative to previous years, based on @exantedata real-time tracking
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