The China reopening story is fast becoming the most important trading theme in emerging markets, so figuring out its potential impact across asset classes is vital for global investors.
For stocks, it’s a boost as it promises to raise consumer demand, improve corporate cash flows and revive trade volumes. For currencies, however, it could be a drag by reducing real yields via inflation, pressuring China’s current account and delaying a policy pivot by the Federal Reserve. For bonds, it’s a mixed offering.
