10 Jan 2014
Flash: EM FX seeing persistent outflow - ANZ
FXstreet.com (Barcelona) - Richard Yetsenga, Head of Global Markets Research at ANZ believes that Emerging Market currencies are weighed on by EM equity outflows.
Key Quotes
"Emerging Asia saw outflows for the sixth consecutive week, according to EPFR fund flows data for the week ending 8 January. Equities saw USD384m of outflows, while bonds had USD37m of inflows, reversing four weeks of outflows."
"Korea accounted for a large part of the flows. There were USD321m of outflows from Korean equity funds, likely reflecting some concerns over the impact of won strength and yen weakness on earnings. Korean bonds saw USD109m of inflows though, partly on speculation of a possible rate cut from the Bank of Korea (they held rates unchanged yesterday)."
"The overall flow data continue to support our reversification thematic. As the first chart below shows, DM equities have seen a large turnaround in flows last year, particularly in the US. But Europe has also enjoyed strong inflows, a key reason why EUR has been strong. EM equities on the other hand, continued to see persistent outflows, which will weigh on EM currencies."
Key Quotes
"Emerging Asia saw outflows for the sixth consecutive week, according to EPFR fund flows data for the week ending 8 January. Equities saw USD384m of outflows, while bonds had USD37m of inflows, reversing four weeks of outflows."
"Korea accounted for a large part of the flows. There were USD321m of outflows from Korean equity funds, likely reflecting some concerns over the impact of won strength and yen weakness on earnings. Korean bonds saw USD109m of inflows though, partly on speculation of a possible rate cut from the Bank of Korea (they held rates unchanged yesterday)."
"The overall flow data continue to support our reversification thematic. As the first chart below shows, DM equities have seen a large turnaround in flows last year, particularly in the US. But Europe has also enjoyed strong inflows, a key reason why EUR has been strong. EM equities on the other hand, continued to see persistent outflows, which will weigh on EM currencies."