Primas Insights - Aug 2024

After a prolonged period of unusually low volatility, August began with significant financial market fluctuations driven by deleveraging and the unwinding of JPY carry trades following the surprise rate hike by the Bank of Japan. This triggered declines in other assets, with the Nikkei 225 experiencing a 25% drop - the third largest in any non-overlapping one-month period. Meanwhile, the July US CPI print reinforced the disinflationary trend, and strong retail sales alleviated concerns about collapsing demand. At the Jackson Hole Economic Symposium, Federal Reserve Chair Jerome Powell indicated that progress on disinflation had opened the door for the Fed to join the global easing cycle. Elsewhere, slowing industrial production, contracting property investment, and subdued retail sales confirmed a weak Q3 start for China.?

This month's newsletter assesses how the Fed's cutting cycle might affect emerging markets (EM) credits, and which factors will have a particular impact in the near-to-medium term future.

To learn more, please reach out to our Investor Relations for the full version of the Primas Newsletter.

Disclaimer:

The article is a general investment philosophy description for information purposes only, and should not be regarded as an offer to sell or a solicitation of an offer to buy any security. The Company is only allowed to serve PI clients and cannot serve retail. The Company accepts no liability nor contractual agreement based on the content of this article, or for the consequences of any actions taken on the basis of the information provided. All terms are subject to the signed subscription documents. Investment involves risk and may result in substantial losses. Past performance results are not indicative of future returns.