Global environment for emerging markets
I'm not willing to bet against the pound sterling example in front of the Japanese yen or U.S. dollar, because in terms relative attitude of the Bank of England is marginally more "hawkish" than the Federal Reserve and significantly more "hawkish" than the Bank of Japan.
Since we are still in a favorable global environment for emerging markets, we chose this time to try the scenario of a depreciation of the currency exchange belonging to the British the most important emerging economies producing goods. But the central hypothesis is that the exchange of additional assessments in emerging and Japanese yen against the U.S. dollar and a depreciation scenario pound selective secondary is only a hypothesis.
I decided to come back on some of the assumptions abandoned at the beginning of the week. So I want to watch again
the prospect of further appreciation of the quotations for:
- Emerging markets (stocks, bonds, currencies against the U.S. dollar);
- Goods (class as a whole, agricultural goods, industrial metals, gold and silver);
- Most major currencies emerging economies producing goods in front of the U.S. dollar and Japanese yen;
- Currencies of the major emerging economies producing goods in front of Sterling.
Monday's announcement by Standard & Poor's is now history. I think the Fed next week will sound more "dovish" than the public probably thinks (I noted yesterday a number of ideas in this respect). And the normalization of monetary conditions in China is viewed more as a vote of confidence in the local economy, otherwise I would be hard to explain my actions as the Chinese stock market has from the beginning of the best performance
major markets. Bank of Japan remains dependent on ultra-lax monetary approach, which theoretically make more convenient the Japanese yen currency financing
speculation global "carry trade".
Published yesterday, the transcript of most recent meeting of the Bank of England monetary policy that took place earlier this month indicated that the vote remained 6-3 in favor of keeping key interest rates at historically low 0.5%, similar situation in February and March. Transcript also says that although growth is expected to
additional medium-term prices, the central bank is more worried about the possible negative effects that a key interest rate increase could have on consumer confidence.
In the line of what I believe for some time, the message appeared yesterday transcript reconfirm attitude "dovish" Bank of England (or, more accurately, not as "hawkish" on how they thought markets).