Asset managers still fleeing emerging markets
- The main factor in the financial markets is the exodus from Emerging Markets by professional investors ahead of expected Fed tapering in September.
- The AUD is the proxy trade amongst the FX majors for EM/risk and it fell heavily over the last 24 hours against the other majors.
- The EUR benefitted from sizeable in-flows, most likely from the same asset managers exiting EMs, and is currently resting near medium-term range highs at 1.3425 against the USD.
- USD/JPY is stuck in sideways trading mode, whilst the GBP took a back seat to the EUR leads.