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Emergingmarkets

Inflation, China and Emerging MarketsIn higher inflation environments, money flows typically begin to head into emerging markets. This is primarily due to the fact that many of them are commodity producers. When looking at capital flows into EM-nations and real treasury term premia, it is this capital flow which is partly responsible for driving up interest rates. When taking this into account, it is expected that continued flow into emerging markets will keep interest rates elevated. However, there is an increasing relationship into capital flows into emerging markets and China’s monetary policy, which to say the least is non-consistent. We believe the late-cycle inflation in the U.S., plus the likely even that China could face another liquidity crunch, the outlook on EEM is neutral. Although, price momentum is strong the rapidly declining volume is a key signal that a bull trap could be in place. Key risk ranges available on chart.
AMEX:EEM
by MacroView_TrendFlex
The #Trump TradeThe Mexican peso has remained volatile due to numerous factors, including the price of crude oil, prospects of the Brexit and, more interestingly, the potential of a Donald Trump presidency in the U.S. The USDMXN had been on a steady bullish trend, and the peso's dramatic nine percent decline going into the first U.S. debate on September 26 was largely in part to the "Trump effect" as he was within two points of Democratic candidate Hillary Clinton. However, after a series of miscues from Trump and sporadic polling performance, the Mexican peso began to strengthen considerably. A closer look at Donald Trump's immigration policy : Trump aims to protect the jobs, thus wages, through tougher immigration by hindering the flow of undocumented foreign workers and immigrants. The keystone of the immigration plan is to build a physical border-wall, which is not particularly unheard of. For instance, due to the constant flow of political and economic refugees from the Middle East into Europe, many European countries have greatly increased their immigration policies to help monitor refugee movement. Nations, such as Serbia, Bulgaria and Hungary, are clamping down due to the potential safety concerns to its citizens, as well as controlling the financial strain due to the unfettered flow of migrants. Larger, developed nations, like the United Kingdom, is aiming to build a wall to prevent migrants crossing from the "Calais Jungle," which is a French migrant camp of 10,000 looking to cross into Britain. What is concerning for Mexico is that Trump is almost unwilling to alter his plan for a border well while making Mexico pay for it. Trump has proposed that Mexico will pay the U.S. government between $5 and $10 billion as a one time payment or face the consequence freezing all incoming money wires into Mexico. Trump's outline says the Mexican economy benefits from $24 billion from Mexican nationals that work within the U.S. and calls it "de facto welfare." It is true that the Mexican economy greatly benefits, and the blockage of incoming dollars would have a net-negative effect on their economy; it would also have a net-negative affect on the U.S.-Mexican relationship. We expect the peso to remain elevated as long as Hillary Clinton remains ahead in the polls, but, considering the overwhelming evidence of potential collusion between the "mainstream" media and the Clinton campaign, there is a potential for an upset which would undoubtedly send ripples throughout risk assets, including the peso. For the meantime, we can see the USDMXN trending lower to 18.52 with a secondary level near the 200-day EMA. Another interesting "Trump trade" is the RUBMXN. With tensions between the current Obama administration and Russia, as well as elevated rhetoric from Clinton, the ruble could see a great deal of volatility heading into the U.S. election. Trump, who has no obvious ties to Russia, has stated that he would aim to develop a partnership between the two nations. Following the debate, to which a CNN poll containing a meager sample of less than 550 likely voters show Clinton won the debate, the RUBMXN dropped over 1.55 percent. As rhetoric from the Democrats pick up, we expect the ruble to weaken against both the dollar and Mexican peso.
by MacroView_Research
USDCLP - posicion alcista !Podemos ver buenos indicadores en el grafico diario del dolar/peso Chileno el cual ha hecho un re-test de los 0.618 de fibonacci, podemos observar un Lower Low, en los 646 y un Higher low en los 652,5 el cual nos indica una buena posicion para tomar compras. La caida del cobre nos ayuda en esta vision del par y podemos ver a corto plazo un objetivo de 679 y a largo plazo los 700 se ven bastante atractivos, un Stop loss estaria bien ubicado debajo de los 646. Buena suerte !
Long
by btM_Afta
Bovespa Symmetrical Downtrend Moves Back to a 1.618 Extension.The Bovespa has been forming a symmetrical downward trend followed by a 1.618 extension of the longer bull trend. You can see this in the chart by the first light blue fib retracement, and then I used a green arrow to indicate where the second retracement line is compared to the green 1.618 retracement line. The second to last move down is a bit tricky as it extended further than the previous downward moves (indicated by the dashed blue trend lines) and did not fully retrace back to its 1.618 extension of the larger trend. Instead it only retraced back to the .786 fib line and again made a downward move extremely similar to past downward moves (again indicated by the dashed blue lines.) It may be forming a double bottom, especially if it finishes out its symmetrical downward trend line, which is about where it’s at. If this is the case, expect a move again back to its 1.618 retracement. This mark is also important as it overlaps the much larger downward trend that started back in November of 2015. These retracement lines overlap almost perfectly and is indicates strong resistance. Target Price: is 55975-56007 by early to mid-June. I would actually rate this quite conservative as the upward extensions seem to happen in a 5-ish day time cycle sometimes followed by a week of slowly moving bullish trends indicating indecision. Make sure to give it time to play out its double bottom which Should be slightly higher than its first bottom of 49907.77 and be sure to use a smaller time frame chart for your entry. To play this index I may use a leveraged ETF like BRZU. Please Like and share and follow for future symmetrical and perhaps non symmetrical analysis. Thanks!
INDEX:IBOVLong
by KyleKeb
USD Devaluation driving Oil Price Rallly and Gold StrengthThe recent devaluation of the USD is serving purpose to make way for future rate hikes by the FED without causing EM volatility and issue with China's currency peg. As the USD devalues it also pushes up Oil prices which provides relief for entities with Oil based junk bond exposure (Aka US banks). I see the devaluation as a short / medium term trend as a relief valve for policy normalisation. It should also stoke up some inflation to further give strength to the 'recovery' dialogue.
NYMEX:CL1!Short
by MarcusWilliamson
THE FORCE BEHIND BRAZIL'S RECENT BULLISHNESS (ANALYSIS ON EWZ) If you've been paying attention to headlines about Brazil recently, the term "impeachment" seems to be all over the place. But what's really driving prices upwards in the country's stock market? Is it the daily swaying impeachment probability or something else? Today's instrument to be analysed is EWZ, the ETF that seeks to track the investment results of the MSCI Brazil 25/50 Index. The fund generally invests at least 95% of its assets in the securities of its underlying index and in depositary receipts ("DRs") representing securities in its underlying index. The index, which consists of stocks traded primarily on the BM&FBOVESPA, is a free float-adjusted market capitalization-weighted index with a capping methodology applied to issuer weights so that no single issuer of a component exceeds 25% of the underlying index weight, and all issuers with weight above 5% do not cumulatively exceed 50% of the underlying index weight. The fund is non-diversified. (source: finance.yahoo.com) The chart's left side is late October 2014, when president Dilma Rousseff got re-elected. As can be seen, EWZ price has since then maintained a close correlation with the price of other Emerging Market ETFs and Indexes 2015 was a perfect storm for Emerging Markets. With China's slowdown, a commodity crash, the strong dollar, a Fed rate hike, the light at the end of the tunnel was nowhere to be seen. Commodities Many emerging markets depend on commodities like oil, iron and copper in order for their economies to do well. Commodity prices tumbled in 2015, with Crude Oil hitting a 7-year low in December. Oil and other commodities are not set to boom in 2016, but they likely won't tumble as much as they did last year, specially if OPEC agrees on setting production quotas again. China's Slowdown China is transitioning to a consumer-led economy from one led by manufacturing and construction, meaning its demand for all those commodities has plummeted. China has been cutting rates, weakening the currency and pumping money into the economy to counteract the slowdown. Many experts believe China's growth may slow down more in 2016, but not at a faster pace. A more stable China should help the countries that depend on it. Strong Dollar and Rate Hike The good news is that a weak currency lets emerging markets sell products abroad more cheaply, making them more attractive to foreign buyers. That eventually boosts exports and, in turn, economic growth. The bad news is that emerging markets have to pay off some debt in U.S. dollars. In total, there's $3 trillion of emerging market debt denominated in dollars, according to Wells Fargo. As the dollar rallies, that debt gets more expensive to pay back. The rate hike makes the US Bonds more attractive and attract foreign money to the US. This money has to be exchanged into US Dollars and ends up boosting the currency. Many leaders in emerging markets are actually glad the Fed finally raised rates. So much uncertainty surrounded the first rate hike, and now that it's done, that gives emerging markets more clarity. With all this in mind, it's silly to say Dilma's possible impeachment is the main responsible for the upwards drive in Brazil's stock market prices...
AMEX:EWZ
by geraldelli
Buy MXNGBP Gartely - great Risk/Reward and good fundamentalsTechnicals We have a Gartely pattern set up here. I am looking to go long at 0.03697, which falls between the 0.786 retracement and 1.272 extension along with 1:1 ratio between the AB and CD legs. There is also a divergence on the Relative Strength Index from a heavily oversold condition, supporting a spike from around the current price. Fundamentals Slumping oil prices damage the prospect for investment in Mexico’s energy industry, while slowing growth in the US is hurting Mexico more, since the US is Mexico's main export market. However, Mexico has the best economic fundamentals in the emerging market, and is heavily undervalued right now, suggesting either a continued consolidation around the current low, or a rebound from this low. Fundamentally, this is a risky trade and could overshoot into the stop loss, but it could also be potentially very rewarding. Profit target I have set an initial profit target based on Fibonacci levels. I expect the second target to be met, and based on the fundamentals above and how they evolve in the coming weeks I will either move the stop loss up to the first profit target if the second is met, or I will close the trade there.
Long
by olly_price
Copper: Republishing my old forecast and new trade setupHi, I'd like to repost a private idea I had (I did post it in related ideas in my last retracement long idea for copper -which actually worked for the 1st entry before a massive turn south-). We have a clear short opportunity as outlined by my friend Tom Killick (he does great coverage of copper and USDCLP, check in related ideas). If we're offered with a retracement we can take these two entries for a low risk trade: If not, I'll be forced to operate off the 4h or daily chart and jump on the trend in some other way...There's always a good excuse to join a trend, and if you don't have many, you will miss out on the best trades (many times they never come back to you once they leave the station). Cheers, Ivan Labrie.
COMEX:HG1!Short
by IvanLabrie
15