Prior to QE3, fund managers were positioning for US dollar weakness and emerging/commodity FX strength but it hasn’t materialized and they’re losing faith, according to the FT.
Flows into EM debt and equity funds rose substantially last week, according to data from EPFR Global, Cameron Brandt, research director, says this week’s flows looked more muted: “There’s a certain amount of reaction fatigue setting in.”
I’d say we need to wait a few more weeks. If Spain takes the bailout money, the whole world starts to look a bit better.
