(Prospect News) Barclays Bank plc’s 0% capped buffer gears due April 30, 2021 linked to the iShares MSCI Emerging Markets exchange-traded fund are designed for bullish investors betting on a turnaround in emerging market assets, an asset class that has underperformed for a number of years.
Juan Perez, senior foreign exchange trader and strategist at Monex Inc., also expressed a bullish view on emerging markets.
“I’m relatively optimistic,” he said.
“The uncertainty over trade issues is having a domino effect that is controlled by two fingers: the China finger and the U.S. finger. Sooner or later they’ll reach some kind of a deal. Many of the uncertainties we’re faced with today will disappear, tensions will ease, which as we go along might help MSCI.
“We have gone through a lot of headwinds between Trump, trade negotiations, Brexit. I think it can only go in one direction now, and that’s in the way of progress.”
Emerging markets have also suffered from the appreciation of the dollar. But Perez said the U.S. currency is poised to weaken.
“Right now the dollar is too strong. It’s a safe bet to see it depreciate against those currencies,” he said.
A weaker dollar increases the price of commodities, which help emerging market economies.
“In Latin America, Brazil will improve. Both Columbia and Brazil are pro-Western countries. They may help the U.S. solve the crisis in Venezuela,” he said.
China’s future is harder to predict.
“They’ve evolved from an industry-based economy to a service-based economy, so we won’t see high single-digit growth rates anymore,” he said.
“Emerging markets depend a lot on China. I think once we get a U.S.-China trade deal, this index will rally.
“I’m pretty optimistic about global markets.
“I think the note is not bad. It’s based on doable and reasonable expectations.”
