September, 16 2016 by lsr team

Emerging market growth has been on a downward trend for just over half a decade. The slowdown probably bottomed out at the end of last year. On an aggregate basis, the advance in EM annual real GDP accelerated to 3.9% in Q2 from 2.4% in Q3 2015. Is this the start of a sustained rebound in EM growth? Click above to watch the full video or below for our latest report on emerging markets.

December, 09 2015 by lsr team

Twelve months ago we said 2015 would be a year of ‘deceptive calm’. With the S&P 500 up 5% and US 10-year yields around 5bps higher, you could say our forecast was accurate. Markets spent much of the year in an anxious state, fretting about Greece, then China, then the risk of a synchronised global recession. In 2006 and 2007, LSR had a high conviction that a financial meltdown was about to wreak havoc on the global economy. This time around we stick with our 2015 theme ‘Keep Dancing’ but with no great conviction. Looking ahead to 2016, China...

October, 06 2015 by lsr team

The emerging market (EM) slowdown that started in 2011 and gathered pace after the taper tantrums of 2013 continues unabated. The two questions investors often asked over the last couple of years have been: are EMs heading for a 1990s-style crash and is the worst behind us? We have replied No to both, and the follow-up question has usually been ‘how much more pain is in store?’ This has been tough to answer. Our latest publication - LSR View looks at the extent of the adjustments that EMs still need to make by answering the following set of questions: 1) W...

September, 02 2015 by lsr team

We have warned of painful adjustments and weaker currencies in EMs, most recently in our 2015 outlook. Our own LSR EM FX index is down 11% against the dollar since the start of the year, and even China has dipped a toe in the tempting waters of currency depreciation. In real terms, many EM currencies are still overvalued. Our analysis suggests that a further 9% real depreciation of the LSR EM FX index would be required just to make EMs as competitive as in late 1990s. The important question here to ask is whether US policy can support the large scale EM devaluati...