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Reuters
JPMorgan cuts EM forex, rates to ‘market weight’ on Fed path view
NEW YORK, April 10 (Reuters) –JPMorgan has downgraded its view of emerging market currencies and local rates after high inflation data in the United States called for a reassessment of the interest rate path of the U.S. Federal Reserve.
U.S. consumer prices increased more than expected in March, leading financial markets to anticipate that the Fed would delay cutting interest rates until September.
“That is the point at which the probability of no (Fed) cuts becomes sufficiently likely for markets to reprice, moving risk-free rates even higher and limiting the ability of EM currencies to perform or EM rates to keep resisting the move higher,” JPMorgan said in a client note.
JPMorgan said it moved back to market weight in EM local duration after cutting its overweight in half last month, and moved to market weight in EM FX from its previous overweight stance.
Reporting by Rodrigo Campos
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2024-04-10 17:06:40