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De-dollarization efforts won't do much to dethrone the dollar, Morgan Stanley said. There are no true alternatives to holding the US dollar at the moment, Morgan Stanley strategists said. AdvertisementThe dollar's status as the top currency of central banks and for international trade probably isn't fading soon, according to Morgan Stanley. "Now, reasonable people can disagree about whether cryptocurrencies are going to appreciate or depreciate, but I'd argue that the best outcome for a dominant currency is neither." Displacing a dominant currency is something that happens over the course of decades, economists previously told Business Insider, as it takes time for people to shift to other currencies once a dominant currency is recognized as "safe."
Persons: Morgan Stanley, , James Lord, Michael Zezas, That's, Lord, there's, Zezas, Crypto, David Adams, Morgan Stanley's Organizations: Service, Rivals, greenback, Business Locations: Beijing, China
Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via Email'King dollar' lacks challengers as economy stays strong, says Morgan Stanley's James LordJames Lord, Morgan Stanley head of FX and emerging market strategy, joins 'Money Movers' to discuss challengers to the U.S. dollar, the increased focus on bond auctions, and more.
Persons: Morgan Stanley's James Lord James Lord, Morgan Stanley Organizations: U.S .
LONDON, June 12 (Reuters) - Morgan Stanley has become the latest Wall Street bank to turn bullish on local emerging market bonds, though its strategists said they remained wary of developing economies' currencies in the face of a dollar that is set to remain strong. "We upgrade our stance on EM local currency bonds to bullish, where we have held a neutral stance for much of the year," Morgan Stanley strategist James Lord said in a note to clients dated Friday. In a note published on Friday, JPMorgan moved its recommendation emerging market local bonds back to "overweight" from "market weight". "We prefer EM local to hard currency bonds for 2H23," Luis Oganes, head of global macro research at JPMorgan wrote in a note to clients. Emerging market central banks had been quick to raise rates in 2021, frontrunning major peers such as the U.S. Federal Reserve and the European Central Bank.
Persons: Morgan Stanley, James Lord, Lord, Luis Oganes, Oganes, frontrunning, Karin Strohecker, Conor Humphries Organizations: FX, JPMorgan, U.S . Federal Reserve, European Central Bank, Thomson Locations: Hungary, Uruguay, America
JPMorgan raised its outlook for emerging market hard-currency debt on Monday to "marketweight" from "underweight", saying the latest U.S. inflation data cemented a shift to the next phase in the cycle. In its 2023 outlook Morgan Stanley predicted emerging market hard-currency bonds could return more than 14% next year. Core CPI seems to be finally in," Citi Research's head of emerging market strategy Dirk Willer said in the bank's weekly strategy note. However, it might not be quite time for investors to dive into emerging market sovereign credit. JPMorgan's emerging market strategist Jonny Goulden said Federal Reserve hiking cycles were usually followed by a "wait" period before the onset of a U.S. recession, or possibly even an emerging markets financial crisis.
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