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JPMorgan goes ‘underweight’ EM currencies as China risks rise By Reuters

by Mike Robinson

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© Reuters. FILE PHOTO A JPMorgan logo can be seen in New York City (U.S.A), January 10, 2017. REUTERS/Stephanie Keith/File Photo

LONDON (Reuters) – Investment bank JPMorgan (NYSE:) turned ‘underweight’ on emerging market currencies on Friday, warning a slowdown of China’s economic growth, troubles in its property sector and less supportive global monetary policy were all growing risks.

“EM growth concerns from COVID-19 drags are receding but risks that China’s growth slowdown along with property sector drag will impact EM more broadly have risen,” the bank’s analysts said in a note.

The analysts added, “The Fed stance doesn’t help EM.” “EM currencies should not rely on a dovish Fed. With the best global liquidity conditions possible behind us, they cannot rely.”

Analysts at JPMorgan downgraded China’s entire property sector and warned that there may be up to 11 defaults from riskier, higher-yield Chinese companies.

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