The Fed does EMs no favours - TDS

FXStreet (Guatemala) - Analysts at TD Securities noted the key detail surrounding the EM's and FOMC.

Key Quotes:

"On the face of it a good FOMC for EM assets, with no hike and a more dovish statement than we expected. However, the price action in EM FX, which generally rallied on the rate decision only to sell-off during the press conference, shows that the markets soon spotted the fly in the ointment."

"The reason for the Fed’s caution was concerns about EM in general and China in particular, with the consequent risks to global growth and the deflationary impact of falling commodity prices.'

"In the week ahead we think there may be some upside for EMFX as the lack of a Fed hike gives some breathing room for risky assets and we think the market is still somewhat short EM. But the focus will then return to precisely what the Fed is concerned about, namely specific EM economic and political risks, with China remaining very much to the fore."