A fall in the cost of assets in emerging markets in the coming time will facilitate a
significant outflow of capital, connected with expectations of a gradual rise in US
Fed interest rate rises. As a result, the cost of borrowing will increase
and potential returns for investors in emerging markets will fall. A rise in the key
Fed rate will also facilitate a strengthening of the USD which will lead to investors
trying to reduce volumes of assets denominated in emerging economies’
currencies. The value of these currencies will fall and investors will place assets
in USD, thereby hastening the fall. Furthermore, a slowing in the growth of the
global economy and expectations of a fall in demand for export
goods/commodities from emerging economies will stimulate a fall in the price of
Investment period ends: 16/06/2017
Expected yield is calculated according to 95% capital protection and the price of the base asset at expiry, equal to 25 USD.
The index for developing markets price is close to the upper limit of the long-term downward trend from April 2015. Now there is a good point to enter the market with a short position: the price is close to the 200 daily moving average (high probability of a slide downwards). The closest resistance levels are 35.95 and 36.69. The closest meaningful support levels are 29.68, 28.48, 23.36 and 19.00.