29 August 2016
EM ended last week on a soft note, as Fed tightening expectations ratcheted up. The December Fed funds futures contract has an implied yield of 0.5%, the highest since June 2. Note that on June 3, US rates plunged after the May jobs shocker (+38k). If the hawkish Fed storyline can be maintained, then EM will have trouble getting traction. This Friday’s jobs report for August will be key, with consensus at +185k vs. +255k in July.