Today’s chart shows that the EM Manufacturing PMI has topped the DM Manufacturing PMI for a second month in a row, which we haven’t see for quite some time.
Some stabilization in China’s economy, rising commodity prices and a dovish U-turn by central banks globally are underpinning the outlook for emerging countries. In addition, last year saw the Eurozone grow significantly above potential, something that has reversed this year. I expect growth in EM economies to improve marginally from here, but at the same time also anticipate a gradual improvement in other areas like the Eurozone.