ECB QE, Greek easing may help Emerging Europe

Significance

Impacts

• Emerging Europe's local bond and equity markets are likely to perform strongly as QE gets under way.
• The outlook for currencies is less certain, given the strong dollar and the fragility of sentiment towards emerging markets generally.
• However, Emerging Europe's improving economic outlook may help buoy the region's currencies against the dollar's strength.
• The biggest threat to investor sentiment towards Emerging Europe remains a sudden, sharp change in expectations of US monetary tightening.