Coronavirus will trigger widespread emerging market rate cuts and boost equities, analysts predict

Coronavirus will trigger widespread emerging market rate cuts and boost equities, analysts predict

The weakened global economic outlook in the wake of the coronavirus outbreak has led to speculation that a host of major central banks around the world will lower rates following the Fed's 50 basis point cut earlier this week.. Emerging market (EM) central banks will likely begin more aggressive loosening of monetary policy following the U.S.. While policy easing in emerging markets has so far been confined to Asia, where the economic fallout is expected to be most severe, analysts expect that central banks across the emerging market landscape are preparing their own monetary policy arsenal.. Lower rates and a weaker dollar could provide a tailwind for emerging market equities, according to UBS Global Wealth Management CIO Mark Haefele, who rated emerging market equities overweight on expectations that they will outpace developed peers this year.. "We expect growth differentials between emerging and developed markets to widen in favor of emerging markets this year," he said.. "Record low real interest rates are also supporting domestic and international funds' allocation to equities, while potential BRL (Brazilian Real) appreciation could also provide an additional source of upside.".