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Yahoo
7 days ago
- Business
- Yahoo
Traders Hold Their Nerve to Ride Bumpy Emerging-Market Rally
(Bloomberg) -- Investors are betting the months-long rally in emerging markets has further to run even as tariff threats and escalating geopolitical tensions signal a rocky path ahead. Shuttered NY College Has Alumni Fighting Over Its Future As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Do World's Fairs Still Matter? NYC Renters Brace for Price Hikes After Broker-Fee Ban As American Architects Gather in Boston, Retrofits Are All the Rage Money managers from Lazard Asset Management Ltd. to Pictet Asset Management Ltd. have been scooping up Latin American local bonds, Asian currencies and some high-yield sovereign debt. The optimism — fueled by fading concerns about Trump's trade policies — got a fresh boost last week after a string of soft US inflation data reignited bets the Federal Reserve will lower interest rates more than once this year. That helped send the dollar to 2022 lows, pushing EM assets to extend yearly gains. 'Increasing momentum in the weaker dollar narrative and a still structurally elevated valuation for the dollar suggest there is much more room to go for EM local as an asset class,' said Chris Preece, a portfolio manager at Pictet. 'Sure, there can be a pullback — but I don't think we can say the move in FX has been over-extended.' Emerging markets have been on a stellar run: currencies are having the best start to the year since 2009, stocks are beating the S&P 500 Index and local bonds are on a tear. The jump left the extra yield investors demand to hold junk-rated dollar debt from the developing world over Treasuries at the lowest in almost four years. That has made assets more vulnerable to looming US policy risks and the escalating conflict in the Middle East. The latest reminder came at the end of last week, following Israeli airstrikes on Iran. For Morgan Stanley strategists, that means traders 'will need to hold their nerve' going into the second half. 'The next few days will be critical to this, but we would think there is a higher bar for markets to panic' given previous experiences of conflicts between Israel and Iran over the last two years, JPMorgan Chase & Co. strategists including Jonny Goulden and Saad Siddiqui said Friday. They reaffirmed an overweight recommendation for EM currencies. Markets on Monday showed some of that optimism as both the EM currency and stock indexes posted gains. Israel's shekel rose the most in the world, while stocks tied to artificial intelligence and defense contracts rallied. Comeback The asset class is also seeing a pickup in inflows after multi-billion dollar outflows over the past three years. The rebound comes as money managers seek to diversify away from the US, where questions about growth and policies are eroding sentiment after years of outperformance. EM bond funds saw $738 million of inflows in the week ending June 11, the biggest this year, according to JPMorgan Chase & Co. citing EPFR Global data. A $3.2 billion exchange-traded fund focused on local government bonds in emerging economies attracted $255 million in May, the most for a month since 2019. 'We are seeing flows coming back into the asset class from foreign allocators,' said Nicolas Jaquier, portfolio manager at Ninety One Plc.. 'But also domestic investors in EM generally have been very long dollar for a long time and we're seeing a bit of a reversal of that trend.' Asia FX Arif Joshi, who co-heads EM debt at Lazard, has rotated out of emerging Europe currencies to turn more constructive in Asia. Some of his preferred wagers include the Taiwan dollar, the South Korean won and the Malaysian ringgit. Anders Faergemann, a portfolio manager at PineBridge Investments, is adding currencies like the Czech koruna and Hungarian forint which benefit from the Eurozone's strength. In Asia, where trade risks have pressured assets, he likes the Taiwanese dollar, Korean won and Indian rupee. He also favors local assets in Mexico that offer high yields as the USMCA trade agreement is set to prevail and limit volatility. 'While we have come a long way already in EM local this year, largely due to the softer US dollar trend, we can see the current developments extending further into the second half irrespective of the July 9 deadline,' he said, referring to the end of President Donald's Trump truce for tariffs. Pullback Still, some money managers are warning US debt ceiling negotiations and Trump's back-and-forth on levies have potential to send volatility — which has come down following Liberation Day — jumping again. 'While we believe EM currencies have a lot of upside potential in the medium term, we have tactically reduced exposure to them,' said Antonina Tarassiouk, a senior analyst at Reams Asset Management. Brazil's real, which has strengthened 11% versus the dollar this year, would likely come under pressure in a risk-off scenario driven by tariffs, she said. 'The market kind of got ahead of itself and is totally riding off any trade risks or Trump policy risks,' said Aaron Gifford, a senior EM sovereign analyst at T. Rowe Price. 'It'd be prudent for investors to take some chips off the table.' To Invesco Ltd., it's not the time to be out of the market. 'You may want to restructure some trades with these potential hiccups in mind but you also want to stay the course in this asset class,' said Wim Vandenhoeck, co-head of EM debt at the firm. What to Watch Brazil and Chile policymakers to decide on interest rates, with the former likely declaring the end of the tightening cycle and the latter expected to hold its benchmark rate at 5% Central banks in Turkey, Indonesia, the Philippines, Taiwan and Pakistan also hold monetary policy meetings Economists surveyed by Bloomberg expect officials in the Philippines to bring rates down closer to neutral while the rest might keep rates unchanged (Updates eighth paragraph with Monday market moves) American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Sign in to access your portfolio
Bloomberg
15-06-2025
- Business
- Bloomberg
Traders ‘Hold Their Nerve' to Ride Bumpy Emerging Market Rally
Investors are betting the months-long rally in emerging markets has further to run even as tariff threats and escalating geopolitical tensions signal a rocky path ahead. Money managers from Lazard Asset Management Ltd. to Pictet Asset Management Ltd. have been scooping up Latin American local bonds, Asian currencies and some high-yield sovereign debt. The optimism — fueled by fading concerns about Trump's trade policies — got a fresh boost last week after a string of soft US inflation data reignited bets the Federal Reserve will lower interest rates more than once this year. That helped send the dollar to 2022 lows, pushing EM assets to extend yearly gains.
The Guardian
05-06-2025
- Business
- The Guardian
European Central Bank expected to cut eurozone interest rates today after inflation falls
Update: Date: Title: Introduction: ECB expected to cut interest rates today Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Interest rates across the eurozone are likely to be cut today, as the European Central Bank attempts to support the euro economy as it reels from the damage caused by Donald Trump's trade wars. The ECB is widely expected to cut its key interest rates by a quarter of one percentage point. That would lower its deposit facility rate to 2%, and would be the eighth cut in a year. A cut looks nailed on, after inflation across the eurozone fell to 1.9% last month, below the ECB's 2% target for the first time since last September. Markets are pricing almost a 100% probability of a quarter-point cut, reports Ronald Temple, chief market strategist at Lazard Asset Management, adding: With ongoing declines in inflation and consistently dovish language from ECB members, a rate cut appears to be a done deal. The ECB has previously described 1.75%–2.25% as the range that would be considered neutral monetary policy. Any signals of a change in this view would be surprising. I continue to expect rates to be reduced to 1.5% by year end given a more aggressive US trade posture against the European Union. Markets suggest a slightly less dovish outlook with rates ending the year just below 1.6%.' Today, investors will also be interested to hear the ECB's latest forecasts – economists expect cuts to its growth and inflation projections for next year. The ECB may also signal that it could pause its rate cutting cycle over the summer, before reassessing the situation in September. Christine Lagarde can also expect questions about her claim last month that the euro could take on a more global role, as the dollar loses influence amid the current trade turmoil. Lagarde's future could also come up, following claims that she has discussed cutting short her term as European Central Bank president to become chair of the World Economic Forum. 7am: German factory orders for April 9am BST: UK new car sales report for May 9.30am BST: UK construction PMI report 1.15pm BST: European Central Bank interest rate decision 1.30pm BST: US trade data for April 1.30pm BST: US weekly jobless claims data 1.45pm BST: European Central Bank press conference Update: Date: 2025-06-05T06:32:14.000Z Title: German factory orders rise unexpectedly Content: German factory orders have jumped unexpectedly, defying forecasts that they would fall as Donald Trump's tariffs disrupted trade. Orders at German manufacturers rose by 0.6% in April, official data this morning shows, beating forecasts of a 1% fall. Der #Dienstleistungssektor in Deutschland hat im März 2025 nach vorläufigen Ergebnissen real 0,5 % und nominal 0,6 % mehr #Umsatz erwirtschaftet als im Februar 2025. Verglichen mit März 2024 gab es einen Umsatzanstieg von real 0,9 % und nominal 2,7 %. Statistics body Destatis also reported that foreign orders declined by 0.3%, despite a 0.5% rise in orders from within the eurozone. Domestic orders increased by 2.2%. Demand for data processing equipment, electronic, and optical products increased, while there was also a rise in new orders for transport equipment, and for metal products. Update: Date: 2025-06-05T06:25:10.000Z Title: Introduction: ECB expected to cut interest rates today Content: Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy. Interest rates across the eurozone are likely to be cut today, as the European Central Bank attempts to support the euro economy as it reels from the damage caused by Donald Trump's trade wars. The ECB is widely expected to cut its key interest rates by a quarter of one percentage point. That would lower its deposit facility rate to 2%, and would be the eighth cut in a year. A cut looks nailed on, after inflation across the eurozone fell to 1.9% last month, below the ECB's 2% target for the first time since last September. Markets are pricing almost a 100% probability of a quarter-point cut, reports Ronald Temple, chief market strategist at Lazard Asset Management, adding: With ongoing declines in inflation and consistently dovish language from ECB members, a rate cut appears to be a done deal. The ECB has previously described 1.75%–2.25% as the range that would be considered neutral monetary policy. Any signals of a change in this view would be surprising. I continue to expect rates to be reduced to 1.5% by year end given a more aggressive US trade posture against the European Union. Markets suggest a slightly less dovish outlook with rates ending the year just below 1.6%.' Today, investors will also be interested to hear the ECB's latest forecasts – economists expect cuts to its growth and inflation projections for next year. The ECB may also signal that it could pause its rate cutting cycle over the summer, before reassessing the situation in September. Christine Lagarde can also expect questions about her claim last month that the euro could take on a more global role, as the dollar loses influence amid the current trade turmoil. Lagarde's future could also come up, following claims that she has discussed cutting short her term as European Central Bank president to become chair of the World Economic Forum. 7am: German factory orders for April 9am BST: UK new car sales report for May 9.30am BST: UK construction PMI report 1.15pm BST: European Central Bank interest rate decision 1.30pm BST: US trade data for April 1.30pm BST: US weekly jobless claims data 1.45pm BST: European Central Bank press conference
Business Wire
02-06-2025
- Business
- Business Wire
Lazard Asset Management Appoints Eric Van Nostrand Global Head of Markets and Chief Economist
NEW YORK--(BUSINESS WIRE)--Lazard Asset Management (LAM) today announced that Eric Van Nostrand has joined the firm as Global Head of Markets and Chief Economist. In this newly created role reporting to LAM CEO Evan Russo, Mr. Van Nostrand will work across the firm's investment and research teams, bringing additional macro insights and market perspectives to our investment decisions. As a member of the executive leadership team for Lazard's Asset Management business, he will lead economic and market analysis for the firm and its clients, including oversight and development of investment content. "Financial markets around the world are becoming increasingly complex, with global economic volatility and policy decisions profoundly influencing market dynamics and investment outcomes," said Evan Russo, CEO of Lazard Asset Management. 'Eric joins the firm at a time where actionable economic analysis and macro insights are more critical to investment success. Lazard is renowned for its deep research and investment acumen, and Eric's background and experience will further enhance our capabilities to deliver world-class investment solutions and insights for our clients.' Mr. Van Nostrand most recently served as Assistant Secretary of the Treasury for Economic Policy, serving as Chief Economist at the US Treasury Department under Secretary Janet Yellen. Eric received the Alexander Hamilton Award, Treasury's highest honor. Prior to his government role, Mr. Van Nostrand was a portfolio manager and Managing Director at BlackRock, where he managed systematic equity funds and served as Head of Research for Multi-Asset Strategies. He earned undergraduate degrees from the University of Pennsylvania and holds a JD from Yale Law School. 'I'm excited to join Lazard Asset Management and help our investment teams deliver market-leading investment performance to our clients,' said Mr. Van Nostrand. 'Lazard has a distinguished reputation and proven track record for generating alpha, grounded in rigorous investment research and analysis. I am looking forward to contributing to those efforts to help our clients achieve their investment goals.' About Lazard Founded in 1848, Lazard is the preeminent financial advisory and asset management firm, with operations in North and South America, Europe, the Middle East, Asia, and Australia. Lazard provides advice on mergers and acquisitions, capital markets and capital solutions, restructuring and liability management, geopolitics, and other strategic matters, as well as asset management and investment solutions to institutions, corporations, governments, partnerships, family offices, and high net worth individuals. For more information, please visit and follow Lazard on LinkedIn. Lazard Asset Management, a subsidiary of Lazard, Inc. (NYSE: LAZ), offers a range of equity, fixed income, and alternative investment products worldwide. As of April 30, 2025, Lazard's asset management businesses managed approximately $231 billion of client assets. For more information about LAM, please visit LAZ-AM
Yahoo
09-04-2025
- Business
- Yahoo
Lazard Launches First Three Active ETFs
Lazard Asset Management has announced they are launching 3 new ETFs, Lazard Equity Megatrends ETF (ticker: THMZ), Lazard Next Gen Technologies ETF (ticker: TEKY) Lazard Japanese Equity ETF (ticker: JPY). Lazard Asset Management Global Head of ETFs Rob Forsyth discuses the launch and how their ETFs will fit into the current environment. Sign in to access your portfolio
