China’s stimulus fuels emerging market optimism

China’s stimulus measures this year are bolstering emerging markets, enhancing the positive effects of declining global interest rates and trade normalisation. This is the observation Pictet Asset Management made in a recently published insight.

“With emerging market economies already set to outgrow the developed world, China’s stimulus could further widen that differential. That should help emerging market assets,” said Patrick Zweifel, Chief Economist at Pictet. As Zweifel points out, emerging equity and bond markets faced challenges earlier this year, but a recovery is underway. While emerging equities still lag developed markets by 4%, they have rebounded 5% from recent lows. Similarly, emerging bonds have risen 4% from their lows and are now outperforming their developed counterparts by 0.7%.

Read the full insight here.