Returning global stability will add scope for decoupling to re-emerge

Emerging market equities have performed strongly recently, with the MSCI EM index up over 60% from i...

Emerging market equities have performed strongly recently, with the MSCI EM index up over 60% from its March lows. Primarily this has been driven by improvements in some key indicators from the real economy and the credit markets, as well as the behaviour of commodity prices. Looking ahead, a number of elements in the current environment appear strongly positive for the asset class. The global economic cycle appears to have stabilised, and with the output gap large, inflation should remain extremely muted, allowing central banks to keep monetary policy very accommodative to support growth. ...