June 13, 2019 / 11:02 AM / 3 months ago

Emerging markets entering dangerous phase: Societe Generale

Brazilian Real and U.S. dollar notes are pictured at a currency exchange office in Rio de Janeiro, Brazil, in this September 10, 2015 photo illustration. REUTERS/Ricardo Moraes/File Photo

LONDON (Reuters) - Emerging markets are entering a dangerous and more volatile phase, analysts at French bank Societe Generale warned on Thursday, with increasing concerns about softer growth, recessions or even crises.

Though in the short term both EM currencies and bonds are likely to be supported by expectations of U.S. interest rates cuts, the longer-term view looks tough.

“We are entering a dangerous and higher volatility phase for emerging markets,” SocGen’s analysts said in a new report. “Owning EM assets, especially if just for carry, at this stage of the cycle is playing with fire.”

Reporting by Marc Jones, Editing by Helen Reid

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