EM credit momentum strategy turns ‘long’

Standard Chartered notes...

• Our momentum strategy on the EMBIG Div. Index (versus its 18-day movingaverage) has turned to indicate a 'long' signal after being in 'short' territory since6 March 2015. 
  
  
• 'Momentum strategies for EM/Asian credit markets'. The total return index rose as US Treasury (UST) yields rallied and credit spreads tightened marginally. The US Fed's still-dovish stance despite the removal of "patient" from its statement led to a rally in UST yields. 
  
  
• The significant downward revisions to the dot plots and economic forecasts make a June rate hike less likely, and have led to a bull steepening of the UST curve. 
  
  
• We continue to believe that EMBIG Div. Index performance will be driven by UST yield movements in the near term.