Dollar Keeps Citigroup, Morgan Stanley Wary of Emerging Markets
- Demand for developing-nation stocks and bonds has waned: EPFR
- Turkish and Russian inflation probably accelerated in March
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Emerging-market investors reeling from last month’s losses head into the first full week of April bracing for more pain driven by higher U.S. Treasury yields and a stronger dollar.
Stronger-than-expected U.S. jobs data on Friday prompted traders to price in an earlier start to Federal Reserve interest-rate increases. That’s fueling concern the higher returns offered for risk-free investments in the world’s largest economy may drive even more money away from emerging markets. Demand for developing-nation assets waned in March, with flows to equity funds falling to less than a third of the levels seen in February and bond funds seeing outflows, according to EPFR Global data.