Is EM Becoming a Barbell Trade of An Asset Class

Maybe this is not the time to try to think through the medium-term outlook of an asset class (but it’s easier to resume writing on this than to comment on the 90% tax on bonuses…). But I think one of the most interesting questions to think about is which countries will fare better than others. In other words, as the dust settles, differentiation will begin, and the distribution of spreads will widen, some EM currencies will revert to their FX appreciating trends leaving pears behind, and local interest rates will only come off further in countries with strong aggregate balance sheets.