yesterday, we got fresh inflation data from the Fed, so the world wants to know, “Hey USA, do you have inflation?”
As we see the US emerge from the winter hibernation (Retail Sales, Industrial Production, Jobless Claims), we are also seeing signs of Emerging Markets recovery on Macro.
Emerging Market Funds, both dedicated and ETFs, have now strung together two consecutive weeks of inflows for the first time in 6 months.
I just got back from a week in the islands and tried to escape the chorus of emerging market bears. It’s been a nasty week and emerging markets has been near the top of the loser board, but the reach of journalists and voices of marginal observers of emerging markets found its way to me on a quiet beach in the Caribbean.
…but most didn’t really see this coming despite all the historical references. So while the U.S. is +3.2% in May going into the last day of the month, and Germany is +4.5% (in USD terms), emerging market equities have been torched with much of that move coming from the FOREX.
Commodity currencies: How can they withstand the deflation that spot prices in core commodities are enduring?
The rich get richer and the poor get poorer. I’m not sure not sure you can expect this to change anytime soon. Fund flows into EM last week broke a three week downtrend with new inflows.