Amundi Asset Management

2018 Top 400 ranking: 9http://www.amundi.com

Request More Information

Amundi

Cross Asset Investment Strategy: July 2018

Since the beginning of the year, emerging market risky assets have become more volatile. 

Segments like local currencies have performed poorly (YtD -6.8% as of the 21st of June), due to a strong USD that has finally emerged, along with the Federal Reserve’s pursuing its monetary policy normalization process. Flexible exchange rates are acting as a shock absorber, and they should allow economies to adjust, provided that sufficient buffers are there to prevent disorderly developments. However, the level of stress expressed in the financial markets is not comparable to that of past crisis events (based on the portfolio outflows and CDS widening) and there is still some appetite for EM assets. This reflects a combination of still appealing relative returns, together with the view of improved fundamentals within the asset class, barring any further disruptive scenario in terms of trade war and unexpected/uncontrolled monetary policy actions by the main central banks. This has been partially visible as far as Asian markets are concerned.

Indeed, current positive fundamentals and constructive macroeconomic conditions should not conceal the fact that emerging market countries are still very dependent on external demand. EM aggregate profits growth is very closely correlated with EM exports performance. Different dynamics in terms of commodity prices or the manufacturing cycle can shift the growth premium in favour of commodity or manufacturing producers, simply making a growth re-distribution.

Read the complete white paper at the link beneath Related Links

Head Office
90, boulevard Pasteur
Paris
75015
France
Company website:
http://www.amundi.com
Year Founded:
2010
No. of investment offices worldwide:
6

Browse this manager's…

What’s new

  • China more appealing based on progress in trade negotiations

    China more appealing based on progress in trade negotiations

    White papersThu, 7 Feb 2019

    The recent statements following the bilateral meetings between the US and China suggest that important progress has been made, and more details are emerging compared to the quiet early January round.

  • cross asset investment strategy february 2019

    Cross Asset Investment Strategy - February 2019

    White papersFri, 1 Feb 2019

    After a tough December, which led to an abrupt valuation reset, risk assets rebounded in the first weeks of the year, boosted by a market-sympathetic turn in Fed rhetoric and an increased optimism on trade negotiations. As the current reasons for optimism should be confirmed, we believe it is time to re-approach the areas of risk assets where the correction has brought value back, especially in emerging markets.

  • is turkey really out of the woods

    Cross-Asset Investment Strategy: Is Turkey really out of the woods?

    White papersFri, 1 Feb 2019

    After having narrowly escaped a balance of payments crisis last spring, there are questions surrounding the Turkish economy, not to mention the many (geo)political tensions. Throughout this period, the currency has continued to experience strong downward pressures, leading to a surge in inflation. Recently, the markets seem to be recovering hope.

  • investing in the low carbon economy

    Investing in the Low-Carbon Economy

    White papersFri, 1 Feb 2019

    Private capital has never been given such an important role in tackling climate change and de- carbonising the economy. As Philippe Le Houérou, CEO of International Finance Corporation (IFC), says, the private sector “holds the key,” noting that it “has the innovation, the financing and the tools.

  • time to increase risk exposure

    Time to increase risk exposure: start with emerging markets and credit

    White papersTue, 29 Jan 2019

    The excess of pessimism at the end of 2018 resulted in a sharp decline in financial markets and renewed volatility. According to our analysis, market participants priced in twice the slowdown risk that economic fundamentals justified.

Search all our content