The bounce-back in commodities, weakening U.S. dollar and flattening yield curve have all contributed to the recent breakout in foreign assets.
The first chart below is of iShares China Large-Cap
In recent weeks, as commodities have rebounded and positive sentiment has returned, the battered assets have caught a bid off of their bottoms.
Chinese manufacturing data released Tuesday night, however, underperformed expectations, which will be telling of the future price movements of emerging-market assets. If the markets can shrug off the miss and close higher, they are likely to continue within the strong uptrend.
The next chart is of CurrencyShares Australian Dollar Trust
Australian inflation data were released on Tuesday night as well, and showed that inflation had outperformed expectations.
The weak Chinese purchasing managers' index could weigh on the currency, but if it is resilient, then the intermediate trend of the Aussie dollar remains on its current track.
The last chart is of iShares MSCI Emerging Markets
The price action, similar to the two charts above, has shown a strong bottoming and solid breakout higher, with very few overhead barriers.
Although Chinese PMI's underperformed expectations, stronger commodities and a continually weak dollar should continue to push funds toward emerging markets.
A brief selloff in the morning session is expected, but true strength will allow this index to close higher on its way to the levels last seen in mid-May.
At the time of publication the author had no position in any of the stocks mentioned.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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