Why Morgan Stanley's Kushma Is Bullish on Emerging Markets

The transcript discusses the economic performance of emerging markets (EM), focusing on rate cutting cycles in countries like Hungary and Chile. It highlights Brazil's high real rates and potential for significant rate cuts. The impact of inflation cycles and commodity prices on EM economies is examined, emphasizing the importance of controlled food and energy prices. The transcript also covers central banks' easing cycles, currency strengthening, and the resulting virtuous cycle of rate cuts leading to capital inflows and further economic growth.

Which countries are mentioned as starting rate-cutting cycles in the emerging markets?

• Brazil and Argentina

• South Africa and Mexico

• India and China

• Hungary and Chile

What is the potential rate cut mentioned for Brazil?

• 100 basis points

• 700 basis points

• 200 basis points

• 500 basis points

What is a significant component of the inflation story in emerging markets?

• Luxury goods prices

• Commodity prices

• Technology prices

• Real estate prices

What effect does a falling inflation rate have on central banks in emerging markets?

• It has no effect

• It causes them to maintain current rates

• It allows them to adopt a greater easing cycle

• It forces them to increase rates

What is the expected outcome of the positive cycle of easing in emerging markets?

• Decreased currency strength

• Increased capital outflows

• Strong performance over the next 12 months

• Higher inflation rates