Some of the biggest gainers in the FX space this year have been EM countries like Brazil and Mexico, who thanks to an earlier rate hiking schedule and a more stable macroeconomic environment have been able to weather the storm this year of what has been a resurgence in USD strength. With these two LATAM EM currencies leading the way in YTD performance.
The 2s10s curve has continued to invert, closing this past Friday at -50bps, the flattest level in more than 40 years, with rates heavily dependent on macro releases next week's CPI data will be another big event to watch with this continued inversion.
With the recent rumors of a possible Chinese reopening after Covid prices of crude, iron ore and other commodities soared late this week, as the single largest consumer of many of the major commodities the Chinese reopening presents a strong bull case for commodities.
Similarly, Chinese equities in HK posted their best week in more than seven years, with the Golden Dragon Index rising 8.82% on Friday in the hopes that Beijing would soon start relaxing the restrictions that most of the world has already discarded scrapped their Covid restrictions.
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