EM Asia rotation: Eye on the World 24/02/21

Dovish Powell drove huge intra-day markets turnaround and calmed accelerating underlying cyclicals rotation. We see a catch-up, not deep tech-rotation, more muted curve steepening ahead, and markets better-supported than feared.

HOT TOPICS focus on continued EM Asia outperformance, benefitting from ‘FIFO’ virus and recession impacts. Expect to see future rotation to EM ex Asia and more cyclical markets, with greater EPS and GDP upside, and narrowed Asia valuation and sentiment discount.

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