Vanguard: «Brace for more market volatility and shocks»
Trader TV, London
Markets are just coming off the back of a volatile week caused by a combination of growing fears over a US recession and the impact of a potential rise in interest rates in Japan and a stronger yen – causing a rush of traders to unwind, what is known as, the yen carry trade. The carry trade is where investors, for years, have benefited from Japanese low interest rates to borrow cheaply in yen and then use it to invest in assets, including high-valued US tech stocks.
Nick Eisinger co-head of emerging markets active fixed income, at Vanguard urges trading desks to be prudent as he expects more market volatility and shocks this year. He discusses what he thinks about stock valuations; the impact of the global sell-off on emerging market (EM) liquidity and analyses whether the market fallout showed signs of more critical, underlying systematic issues.
Finally, the Eisinger sheds light on what to expect this upcoming week and what to pay attention to across the EM debt restructuring and distressed debt space.
12.08.2024