EM And China Outlook: Receding Headwinds

China’s growth trajectory and Federal Reserve monetary policy are the two key macro forces dominating global asset prices, particularly for EM. In 2018, EM equities suffered from both Fed tightening and a Chinese slowdown. Looking into the new year, conditions should improve on both fronts, setting a bullish backdrop, argues Alpine Macro. They say EM assets will benefit from continued Chinese reflation and a normalization process of the macro environment in developing countries as Fed policy shifts. There are early signs that China’s monetary cycle may soon begin to accelerate anew.