JP Morgan becomes “underweight” in EM currency as China’s risk rises

London — Investment Bank JP Morgan became “underweight” in emerging market (EM) currencies on Friday, slowing China’s economic growth, trouble in the real estate sector, and unsupported global monetary policy all increase risk I warned that.

“While concerns about EM growth due to COVID-19 drag have receded, there is an increased risk that China’s slowdown in growth and drag in the real estate sector will have a broader impact on EM,” said one of the bank’s analysts. Said.

“The Fed’s stance doesn’t help EM either. The EM currency can’t rely on the dovish federal government, and the world’s highest liquidity conditions are likely to be behind us,” he said.

Analysts at JP Morgan last week warned that China’s entire real estate sector could be downgraded to 11 defaults by higher-risk “high-yielding” Chinese companies.

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