$EMFX are remarkably resilient in the face of raising yields/inflation expectations....

5y5y Fwd EM rates are up 60bp from Jan 4th, yet EMFX vols are compressed, EMFX spot is well behaved (even ZAR and TRY not being too nervous), and equities only down 2% from all-time high

I guess that once long rates resume their uptrend and show decisive move (in conjunction with inflation), things could play out ugly for these high-yielding assets (and let's face it... South Africa 10yr yield is 7.15%, from 6.6%, that's hardly compensates for the risk)

Looks like rates should move another 30-40bp before they will become interesting to fade. This move translates into 1.5% down in EM equities...

Anyway, worth keeping eye on...