Emerging Markets are nearing recent trend highs against the SPX and may be poised to trade through recent resistance as we head into a challenged US earnings season and Emerging Markets have had the kitchen sink thrown at it and is coming back for more.
This AM the Dollar giving back from yesterday’s reversal and continues trade lower. Amazing to me how everyone quickly jumped to more sensational reactions yesterday on how Fed was back in play. How about that the Dollar was very oversold on short term basis but still overbot? Stay with “95 before 110” on DXY. We are still playing this out.
As the Fed gathers this morning a quick look at the DXY, now two days into a pause higher, tells me there could be more of a trade here that is more than just two days.
On the call today we talk about how the extraordinary payroll number raises risks globally as the Dollar may overshoot to the upside with no other central banks ready to counter the tightening mode we have in the US. Emerging markets trade in sympathy with currencies stretching all time low levels but underlying markets contained and in some cases positive.
Emerging Money Daily Audio Call March 5 – On today’s call we highlight outperformance of Europe and a rebound in global markets today despite Dollars strength that’s pushing EM currencies to the brink.
Recapping a couple macro themes from today that are part of larger macro views we have.
Today’s headlines on Greece are NOT in the market’s volatility range or where equities should feel comfortable at this level.
But making money in the oil trade is another. Oil analysts have been largely wrong in the last month on oil prices and the strong rally off the lows.
Argentina has been the expected roller coaster for investors over the last 30 months (see chart of the Merval) as the political pendulum has swung back and forth on change and willingness to negotiate in good faith with western creditors.