According to Rabobank analysts, with only few days left it is safe to say that October proved to be a very good month for emerging markets.
Key Quotes
“Excluding the Argentine peso and the Turkish lira, virtually all EM currencies appreciated versus the broadly weaker dollar.”
“In the CEEMEA space, gains were led by the Polish zloty (+4%) and the Hungarian forint (+3.7%), which benefited from growing market optimism that a hard Brexit could be avoided, although enthusiasm faded towards the end of the month when political uncertainty increased as a result of PM Johnson pushing hard for an early general election.”
“Progress to avert the UK crashing out of the EU without a deal was not the only source of an improved sentiment towards risky assets as the prospect of an interim trade agreement between the US and China also boosted risk appetite.”
“While we retain our bearish long-term view on the CEEMEA currencies, we have to acknowledge that in the coming weeks or perhaps even months the global environment may remain conducive for the EM assets. A fresh wave of capital inflows would lead to further currency gains.”
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