Asia In Much Better Shape To Withstand Fed Taper

Renewed expectations that tapering might come sooner than expected could unnerve investors in Asia, but some analysts argue there’s no need to fear a repeat of the ‘taper tantrum’ seen earlier this year.

Emerging markets saw a sharp selloff from late May to June as worries over the Federal Reserve winding down its flow of easy money prompted a mass exodus from risk assets. The MSCI Emerging Markets index plummeted over 16 percent as a result, even though the dreaded ‘taper’ is still yet to occur.

Positive data out of the U.S. last week, including stronger-than-expected nonfarm payrolls and annualized third-quarter gross domestic product growth of 2.8 percent, has revived the tapering debate once again.

However, Frederic Neumann, co-head of Asian economic research at HSBC, said Asian financial markets are more resilient now and there are a number of reasons to be optimistic.

CNBC

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