Taimur Baig, Chief Economist

Irvin Seah, Economist

DBS Group Research

  • Recent economic and geopolitical developments have likely paved the way for a few months of reprieve for EM assets
  • Iran sanctions waivers may limit the upside on oil price for the time being
  • After a sharp selloff, EM asset valuations have begun looking attractive, offsetting the pressure from USD liquidity squeeze
  • US mid-term election results are being seen as a potential check on President Trump’s brand of hyper unilateralism, which could reduce frictions over trade and security
  • There is however a good chance that this reprieve will prove to be temporary. Iran sanctions could intensify by Q2 as waivers expire; US curves could steepen and USD liquidity tighten if the Fed keeps hiking; President Trump could push for assertive foreign policy through the executive route. Caveat Emptor.

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