EM equities will claw back their 2018 losses, says BlackRock: Emerging-market stocks will (as an asset class) recoup “most, if not all” of the losses they sustained in 2018, BlackRock’s Gordon Fraser told Bloomberg. Improving EM liquidity, driven by the US Federal Reserve’s pause on rate hikes — coupled with rate cuts by EM central banks and Chinese stimulus measures — bode well for emerging markets resuming their strong start to 2019 and making up for the rough second half of last year. “All the key challenges emerging markets had last year have been surmounted and the global liquidity has returned to emerging markets’ favor,” the fund manager said.

Not everyone is as optimistic: The bulge bracket banks aren’t yet sold, signaling instead that investors are getting cold feet about EM investment: Citibank said earlier this month that clients had begun pulling money from EM funds, citing “decline in the EUR and risk assets in general.” Bank of America Merrill Lynch also reported that EM equity funds saw net outflows last week. And then there’s China, which despite record amounts of economic stimulus, saw industrial output growth fall to 17-year lows and unemployment rise in January and February this year, causing the USD to rise against EM currencies. If Fraser is right that equities are “highly correlated” with currencies and bonds, a stronger USD (boosted by poor Chinese data) isn’t exactly great news for EM stocks.