But like many others, Peng sees a hurdle ahead: the Fed’s a sure bet to raise rates in June and keep tightening from there. The end of easy money in the world’s largest economy will drive up borrowing costs around the world and support the dollar, raising the specter of capital outflows. Beyond the drama of the emergency rate hikes in Argentina and Turkey, the Indonesian central bank is stepping into markets to support the rupiah. Foreign reserves in India and the Philippines are dwindling.
For Rajiv Biswas, Asia-Pacific chief economist at IHS Markit Ltd., a protracted China-U.S. trade war may trigger further troubles for emerging-market assets, because of the damage it could do to Chinese growth and exports.
“It is not that China has solved everything, but the main issue now is the U.S.," said Arnab Das, the head of emerging-market macro at $934 billion money manager Invesco Ltd. in London. Still, “China is always very important to watch as we have a very large economy rapidly evolving and changing.”
This article was provided by Bloomberg News.