If I was sitting in Beijing, I would be pretty worried. I think we are going to get potentially more tariffs imposed on China coming at the end of the month, or early September.
There is potential for a bit of a short squeeze and a pain trade in dollars and we want to protect ourselves from that. It makes more sense in some of our multi-asset credit portfolios to hedge some of that exposure we have via EM.
The market has priced the Fed for this year. I think we either need to see a shift in Fed guidance or a more meaningful pick-up in inflation for yields to react.