Yesterday we outlined our Brazil logic. Brazil ETF, EWZ, is the only main EM ETF green on the day, +2%.
In case you missed it, our reasoning from yesterday goes:
"…currencies such as BRL are still dogs compared to the USD.
With Moderna's vaccine now becoming "reality"…. the dollar should start fading versus EM FX (ex China).
Global demand should be lifting all boats, commodities exporting countries as well,and BRL is a big one in this space.
If the vaccine news start spilling over for real, laggards such as Brazil ETF, EWZ might get the second leg going."
EWZ is approaching recent highs, so watch it closely, but as a relative long vs EEM it sure looks interesting.
Recall, EEM is full of Chinese tech that has lost a lot of the upside mojo.
A trade, not for the fainted hearted, is EWZ vs KWEB. The ratio has just started bouncing…