FXStreet (Delhi) – Cristian Maggio, Head of Emerging Markets Strategy at TD Securities, notes that the China’s return from the week-long National Day festivities hasn’t brought any luck to markets, and emerging markets in particular. Key Quotes “The double-digit jump in China’s stocks that many expected to catch up with the rest of EMs clearly didn’t materialize. Equities remain mixed in Asia and Europe, with a clearer bias to weakness than strength. Global govies are well supported though, and the narrowing of spreads adds to the view that risk appetite is lacklustre today.” “So all seems consistent with a reversal, at least partial, of the euphoria seen until yesterday. If profit taking goes in the driver’s seat, we will see more of the recent pattern of CEE FX outperformance (and indeed currencies are appreciating vs USD and roughly flat to the EUR today), while other currencies are giving up gains to both the dollar and the euro, bar a few.” “It’s still too early to tell whether the EMFX rally has culminated on Wednesday. Appreciation has been sharp and unexpected, which has clearly done some damage to many EM bears. But even with stops been cleared, the market’s bearish tilt remains. So there’s still an intrinsically high risk in taking directional bets against the dollar. For this reason we like to be RV focused in the EMFX space.” For more information, read our latest forex news.