Daiwa: The rebound of emerging markets is "unsettling"

Morgan Stanley strategist, including James Lord, wrote in a report on Friday that emerging market assets are expected to continue to rise for the rest of the year, but the gains may be limited by global economic slowdown and US policy uncertainty. The investment bank forecasts that by the end of the year, emerging market currencies against the US dollar will modestly appreciate, lagging behind some other G10 currencies. An index measuring emerging market currencies has risen by more than 5% this year, the best performance since May 2017. They stated, "This is a worrying rebound amid significant uncertainty in the US and global economic slowdown. Investors need to remain cautious." Morgan Stanley's most favored trades include betting on the Chilean peso strengthening against the dollar, buying local bonds in Hungary due in 2030, and betting on a decrease in Brazilian yields.