Pimco's Andrew Balls Sees Opportunity in Emerging Market Currencies

The video discusses investment opportunities in emerging markets, focusing on fixed income and foreign exchange (FX). It highlights the potential of being long on emerging market currencies due to favorable fundamentals and political news, particularly in South Africa. The discussion also covers the impact of a stronger dollar on emerging markets and the resilience of these markets despite equity volatility. The video concludes with an analysis of opportunities in emerging market bonds, noting that while hard currency bonds are tight, local rate bonds with embedded FX exposure offer selective opportunities, with Mexico being a notable example.

What is considered the best opportunity in emerging markets according to the discussion?

• Equity investments

• Commodities

• Foreign exchange (FX)

• Real estate

How do emerging markets react to a stronger dollar?

• They become less sensitive

• They are very sensitive

• They remain unaffected

• They benefit from it

What could pose a challenge to the baseline view of emerging market FX?

• A rise in gold prices

• Political instability in Europe

• A decrease in global oil prices

• A surprise in US inflation

What is the outlook for hard currency bonds in emerging markets?

• They are very cheap

• They are not worth investing in

• They are reasonably tight

• They are highly volatile

Which country is highlighted as having reasonable opportunities in local rate bonds?

• China

• Mexico

• India

• Brazil