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What to expect from emerging economies in December
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Loading...2017 will most likely be one of the best in emerging markets, taking into account that the MSCI AC World Index has not seen a single losing month in the year. Looking at statistics over the years, it is clear that the likelihood that the current month of December will end with a fall is only 21%. If December ends with an increase, the index will mark a historic moment in which 12 consecutive months have not seen a decline.
But do we expect to end in the positive territory last month?
Emerging markets such as China, India, Turkey or Korea rely mainly on exports of goods to the countries of the West. Taking into account the high consumption and record low levels of unemployment in Western Europe and the US, our expectations are that emerging markets will register for the 12th consecutive month of growth. On the other hand, rising interest rates in the US and future ECB plans to end the QE program support both the dollar and the euro. This makes Asian goods and services cheaper and increases their exports to the West significantly higher. If we look at the past black Friday, which has traditionally broken all sales records and upcoming Christmas and New Year holidays, during which, according to expectations, we are also not going to save money, we expect to support emerging economies. Another factor that greatly supports Asian economies is the big steps with which China has decided to fundamentally transform its financial sector. China's banking sector reforms are winning the entire region, as many foreign investors will enter the market, which will make business financing even cheaper. Wall Street's moods show that investors believe the growth of the global economy and expect 2018 to be good as well.
Jr Trader Petar Milanov
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