US dollar cycles last an average of six to nine years, and we are approaching the tenth year of this dollar bull market.
Senior Sovereign Analyst Gregory Hadjian and Alpha Strategies Portfolio Managers Andrea DiCenso and Peter Yanulis consider the potential opportunity offered in local EM debt markets.
Emerging market (EM) assets were hit hard by the crash in commodity prices in 2014-2015, but so far this year, EM and commodity performance have diverged. EM is one of the top-performing asset classes across global markets despite flat commodity prices. This doesn’t square with the market rule of thumb that EM tends to perform in line with commodity prices. I believe strong EM performance can continue if we begin to see global demand for commodities materialize; otherwise, this divergence could reverse.