Research & Insight

Even Harry Potter could not forecast the future and my crystal ball is no better than his – it will reveal only brief pictures, some of which should worry investors, and others that should reassure.

The past twelve months have seen a very rapid appreciation of the euro versus the US dollar as the effects of the sub-prime crisis and the subsequent Fed cuts led investors to sell dollars. However, with a weakening economic outlook in Europe and a possible narrowing of the spread between Fed and European Central Bank rates, the dollar is showing signs of reversing this trend.

JP Morgan produces the Emerging Local Markets Index Plus (ELMI+) which tracks total returns, measured in dollars, for local-currency-denominated money market instruments in 23 emerging markets. They produce series for each market on a monthly basis, beginning in January 1994, and extending through to the end of March 2008.

Author: Christopher Vale, Managing Director & CIO, Asia.

The first quarter of 2008 was one of the worst quarters on record with the MSCI Asia ex Japan Index falling 14.4%. Worries of a US recession, rising credit spreads,...

Emerging markets have become increasingly popular in recent years. Investors are continually searching for diversified sources of strong risk-adjusted returns and emerging market debt meets this requirement.