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14 Apr 2015
Euro area investors preferred G10 to EM in Q4 2014 - Nomura
FXStreet (Bali) - As Q4 IIP data showed, Euro area investors preferred G10 to EM in Q4 2014, notes the Research Team at Nomura, although they add that euro area investors are likely to have re-accelerated their foreign portfolio investment this year in a broad manner.
Key Quotes
"Q4 IIP data showed that euro area investors slowed their investment in EM countries, while keeping their investment in G10 market at a high level."
"This divergence in preference likely put pressures on EM currencies during this period, given the relationship between foreign portfolio investment by euro area investors and EUR performance."
"We think euro area investors are likely to have re-accelerated their foreign portfolio investment this year in a broad manner."
"Lower EUR yields and better economic sentiment are likely to keep their foreign portfolio investment high."
"Any recovery in investment by euro area investors in EM markets could influence EM performance against EUR, and EM currencies could potentially perform relatively well against USD in comparison to EUR/USD."
Key Quotes
"Q4 IIP data showed that euro area investors slowed their investment in EM countries, while keeping their investment in G10 market at a high level."
"This divergence in preference likely put pressures on EM currencies during this period, given the relationship between foreign portfolio investment by euro area investors and EUR performance."
"We think euro area investors are likely to have re-accelerated their foreign portfolio investment this year in a broad manner."
"Lower EUR yields and better economic sentiment are likely to keep their foreign portfolio investment high."
"Any recovery in investment by euro area investors in EM markets could influence EM performance against EUR, and EM currencies could potentially perform relatively well against USD in comparison to EUR/USD."