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Emergingmarkets

Move on, nothing to see hereSideways movement predicted for USDCNH till the end of 2017. Nothing to see here, move on to another pair. Fundamentals -CNY fixing (Higher swaps -> lesser short interest) (Authority looking to keep yuan stable. Volatile Yuan -> Bad for economy) -Fed Rate Decision (Yuan least affected by fed decision -> see capital flows for direction of currency) -Balance of Payments (Don't expect BOP to deviate in extreme fashion -> See FX reserves) -Devalued Yuan is providing support to economy -> improvement in industrial profits Technicals Strong resistance at 7.0, Support expected to deviate between 6.7 - 6.75 Black Swan Events -Real Estate Bubble pops - 20% (Personally, I do not expect the bubble to pop in 2017. Open for debate) No further explanation needed -Donald Trump - 5% (North Korea deal informally reached? -> See Xi's visit to US) "China is a currency manipulator" -> competitive devaluation
by AnthonyLi7f
Inflation, China and Emerging MarketsIn higher inflation environments, money flows typically begin to head into emerging markets. This is primarily due to the fact that many of them are commodity producers. When looking at capital flows into EM-nations and real treasury term premia, it is this capital flow which is partly responsible for driving up interest rates. When taking this into account, it is expected that continued flow into emerging markets will keep interest rates elevated. However, there is an increasing relationship into capital flows into emerging markets and China’s monetary policy, which to say the least is non-consistent. We believe the late-cycle inflation in the U.S., plus the likely even that China could face another liquidity crunch, the outlook on EEM is neutral. Although, price momentum is strong the rapidly declining volume is a key signal that a bull trap could be in place. Key risk ranges available on chart.
AMEX:EEM
by MacroView_TrendFlex