by David Hill | Sep 28, 2018 | Emerging Markets
In an almost textbook fashion, a stronger dollar and rising US rates has triggered a broad emerging market sell-off and surge in volatility. However, somewhat atypically there is little evidence so far of foreign capital bolting for the exit, despite the gradual...
by David Hill | Sep 21, 2018 | Emerging Markets
Credit risk in emerging markets has long been mispriced as the impact of unprecedented monetary stimulus and record low policy rates seemingly placated concerns about higher leverage. However, with the rise in US rates claiming its first casualties (Argentina and...
by Simon White | Nov 14, 2017 | Emerging Markets
Each month, we produce a report which we call our Leading Indicator Watch. In it we update all our main leading indicators that give us leads on global growth, liquidity, commodities, US growth, US consumption, US manufacturing, corporate profits, volatility and...
by Simon White | Aug 5, 2017 | Emerging Markets, Global Economy
The macro-economic landscape has profoundly changed since the financial crisis. Developed markets deleveraged, and emerging markets became the engine of global credit and money growth. The top-left chart from the BIS shows this very clearly. EMEs (emerging market...
by Bill | May 12, 2017 | Emerging Markets
Liquidity conditions have deteriorated meaningfully for EM equities. The left chart below shows that the steep drop in G7 Excess Liquidity points to a risk of much lower EM equity prices in about 3-4 months’ time. This materially worse backdrop for EM equities is...
by Bill | Dec 16, 2016 | Emerging Markets
In the past few monthlies we’ve warned that a strong dollar has the potential to cause emerging market crises. From a valuation standpoint, the dollar is very overvalued against almost all currencies, but rising interest rates and the appreciating momentum may drive...
by Bill | Nov 18, 2016 | Emerging Markets
(from our Tactical report of 8th November 2016) Flows to EM equities have been high lately (3m flows over last 2 years to EM ETFs are in their 80th percentile – chart below). Source: Macrobond, Bloomberg and Variant Perception The rise in the USD is a risk to these...
by Bill | Dec 3, 2015 | Emerging Markets
Capital outflows from emerging markets continued into the second quarter of 2015. Once again the outflows mainly emanated from China and from CEE and Russia. The flipside is growth Treasuries held in custody for foreign accounts is stuck at zero percent. This is a...
by Bill | Aug 5, 2015 | Emerging Markets
We discussed in April that global reserve assets had begun to fall on an annual basis. This has continued, and the level of contraction is now as great as it has been since at least 2004. Capital flight from EM is gathering pace as growth slows and fear mounts over...
