Standard and Poor's: The growth of emerging markets under question

Many developing economies, especially Turkey and South Africa, have not taken full advantage of global liquidity to clear their sovereign balances. Several governments have used this moment to divert their attention from international markets and focus on domestic political problems in their country.

Turkey and South Africa are two of the key examples of this trend.

The two countries have chosen to concentrate on their domestic political problems and have failed to take advantage of the low "prices" of the debt.

At present, the low interest rates and the quantitative easing programs of the ECB and the FED lead to strong global economic progress, with the strongest impact on emerging markets, or at least those who benefit from low interest-raising debt, which helps their development. When the CBs begin to cut their balances, raise interest rates and end the program for quantitative easing, the growth of emerging markets will be questionable and we are likely to see a fall in the Emerging Market indices.

Looking at the good examples, Portugal managed to make the necessary adjustment to its debt and used the low interest rates to make its position more sustainable. As a result, Standard and Poor's Global Rating raised the country's credit rating to "Investment Grade" again.

That's what the indexes of the three mentioned countries look like and where we can position themselves. In summary, the third indexes are on a rising trend and, despite Hawkish, rumors in recent months do not indicate that the bullish market is over.

Turkey - Borsa Istanbul 100 Index - XU100

The Turkish benchmark XU100 was able to fill the gaps created by the US-Turkey visa ban and is currently overwhelmed by earlier diagonal and horizontal resistance. Levels are good for entry, but at high risk. For this reason, it is good to wait for a long-term and short-term diagonal test, then to position SL with SL; 102 000.

Portugal - PSI20

Taking into account the aforementioned, the Portuguese index marks a strong growth, being close to the historic peak of yesterday. Each correction input is appropriate, such as the closest support level and the one created by the pierced horizon. there we can look for Price Action Signal for input with long and stop at levels around 5296.20.

South Africa - MSCI South Africa Index

The index showing the development of the South African economy is at a historic peak and is currently not technically fit to buy. The first level of support is that formed by the previous peak, but entry there would be quite risky. The first stronger level of support for the inner segmental line coinciding with the horizontal line formed by the last bottom.

Source: Bloomberg Pro Terminal

Jr Trader Petar Milanov

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