EM Buyers Deploying More Cash As Fear Subsides

EM assets have rebounded strongly over the past few trading sessions, indicating that investors who were sitting on the sidelines have begun to put money to work at the start of Q4, notes Barclays.

Andreas Kolbe and team at Barclays in their October 8, 2015 research report titled: “Consensus squeeze” point out, however, that supply is likely to dampen the rally in EM credit.

Technical factors in driving seat in EM assets’ rally

According to the Barclays’ analysts, the rebound in commodity prices has evidently alleviated pressures on commodity-linked EM economies and assets. They point out that the less negative comments by Moody’s about Brazil may at least have trimmed the most imminent downgrade concerns. However, Kolbe et al. express concern...