Remain underweight on EMs, Asia Pac ex-Japan: Morgan Stanley

Jonathan Garner, Morgan Stanley says he considers self-help policy easing from major emerging markets including China, as relatively unlikely, given current and capital account constraints at present.

According to him, a clear signal from the Fed on no further rate hikes near term is the most likely positive catalyst for a near-term bounce but would not be sufficient to deliver a new bull market. He, therefore, remains underweight on emerging markets and Asia Pac Ex-Japan in a global equities context.Meanwhile, Keith Parker, Barclays says he expects the Fed funds target to remain 25-50 bps, adding the Fed will want to acknowledge slow incoming data and increase in financial market volatility while simultaneously not giving too strong a signal about its policy intentions for March.

He thinks it is unlikely they will want to elevate financial market stresses as prominently as it did in September. Instead, he believes it will alter its view on the balance of risks and note that it will monitor economic and financial conditions.