EM selloff overdone, says Chow of Barclays | beyondbrics:
"Has the EM sell-off been overdone? Koon Chow, fixed income strategist at Barclays, thinks it has. In a note on Monday titled “Peak pessimism?”, he says 14 straight weeks of outflows from EM bond funds are quite enough and it may now be too late to be adding to EM short positions or scaling up hedges. Investors, he tells beyondbrics, are more exposed to positive surprises than they are to negative ones.
That’s quite a bold call, given the amount of negative sentiment hanging over India and other big emerging markets. Stephen Jen, former head of foreign exchange at Morgan Stanley and now a founding partner at SLJ Marco Partners, told Bloomberg on Monday:
“Whatever selloff you think is reasonable, just double it… It’s the way markets trade: they overshoot.”"
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