In the wreckage of China’s stock market meltdown, some traders are making long-shot bets that officials in Beijing can stoke a recovery.
One of last year’s best wagers in emerging-market debt is getting a fresh boost from bets the Federal Reserve will finally begin cutting interest rates.
India is once again leading flows into US exchange-traded funds tracking emerging markets, boosting one of the most popular trades in 2023 as declining US yields and a weakening dollar turn investors toward assets in the developing world.
Across Wall Street, analysts and investors had cheered 2023 as the year of emerging markets, only to be burned by a relentless climb in US Treasury yields. Now, as the Federal Reserve looks set to end its most aggressive monetary tightening campaign in a generation, they’re at it again.
The third quarter was a story of dashed hopes in emerging markets, with the unraveling of some of the most profitable trades in the asset class.
Traders in the $325 billion industry for emerging-market exchange-traded funds are shifting cash toward strategies that focus on brighter spots in the developing world as China’s economy stumbles.
The three-day selloff in the US dollar on the back of a global stock rally and just the possibility -- yet to materialize -- of an end to China’s Covid-zero policy, has caught market players’ attention.