Bloomberg Television - EM Cheap But Not Attractive at This Time: 3-Minute MLIV
The discussion centers on the anticipated Fed rate decision, with expectations of a 'hawkish cut' where rates are reduced but with a strong message. The consensus is so strong that it might be difficult for the Fed to exceed expectations, and the dollar may not appreciate much further due to already long positions. The conversation also touches on the Brazilian economy, highlighting its strong growth and attractive yields but also its fiscal challenges and potential risks similar to Turkey's past economic issues. The speaker advises caution in investing in Brazil due to these concerns. For those seeking high yields, the speaker suggests looking at emerging and frontier markets, particularly in Africa, but advises waiting until early next year for better timing, especially in light of potential political changes in the U.S.
Key Points:
- Fed expected to deliver a 'hawkish cut' but may struggle to exceed market expectations.
- Dollar unlikely to appreciate significantly due to long positions and lack of catalysts.
- Brazil offers good growth and yields but faces fiscal challenges and investor concerns.
- Emerging and frontier markets, especially in Africa, offer attractive yields.
- Advised to wait until early next year for better investment timing due to political factors.