Traders Dig In on Emerging-Market Bet Roiled by Fed

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(Bloomberg) -- Money managers are digging in their heels over a popular emerging-market bet in early 2024 even as the trade has unraveled five months into...

-- Money managers are digging in their heels over a popular emerging-market bet in early 2024 even as the trade has unraveled five months into the year.Global Chips Battle Intensifies With $81 Billion Subsidy Surge

The change of tack by EM policymakers was clear to see last week. Brazil’s central bank cut its benchmark Selic rate by a quarter-point, slowing after six consecutive half-point reductions — a move that already led analysts to lift year-end rate forecasts.

“We’re probably closer to an inflection point,” de Sousa said. “The probability of that scenario finally materializing is a little bit higher than it was a couple months ago.” “It’s one of the places that does pay a decent carry with a very good valuation story,” he said of Brazil.

 

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