Currencies
Safe Enough: Investors Likely to Sit Out Volatility in Traditional Havens
Last year marked the first in decades when global markets ended with a net loss across most asset classes. As the investors begin to earmark potential destinations for their retreat when the time comes to cut their losses and run, they may be hesitant to funnel everything into the historical safe havens such as US Treasuries, developed market sovereigns, and gold.
31 Jan 2019
Burning Down the House: Reserve Currencies and Emerging Markets
Reserve currencies are a kind of macroeconomic insurance, which guarantees access to financing during economic accidents. Reserve currency status can be unknowingly squandered, but it can also be sacrificed deliberately in place of undertaking macroeconomic adjustment. Which path is Trump taking?
23 Jan 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX ended the week on a soft note, as the dollar remains resilient. While a softer US interest rate outlook benefits EM, we think this is offset by the deteriorating global growth outlook. The IMF will release its updated World Economic Outlook Monday, which is likely to highlight the growing downside risks.
21 Jan 2019
Terrafina Maintains Well-Balanced Accounts Ahead of a Volatile 2019
Mexico-based real estate investor Terrafina has grown at a considerable rate over the last five years, supported by a well-balanced business model that ought to help it reap the benefits of the rapid growth of Mexico’s property markets during that same period. But market uncertainty and tough external conditions are pushing the company to adjust its plans, says the company’s CFO Carlos Gomez.
16 Jan 2019
Duet Group: “Frontier Countries Growing in Spite of Governments, Not Because of Them”
In an exclusive interview with Bonds & Loans, Joe Delvaux, Senior Fund Manager at Duet Asset Management, delves into frontier markets, assessing their performance in 2018, providing insight into investor sentiment on broader EM assets, and takes a glimpse into what 2019 might bring.
14 Jan 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX ended the week on a soft note after rallying most of the week on the dovish shift in the Fed’s messaging. Until US rates adjust back to pricing in no US recession, it will be hard for the dollar to maintain much traction and so this EM bounce can continue. Yet other risks to EM remain in place, including slower growth in China and globally.
14 Jan 2019
FX Volatility Constrains Funding for Underleveraged Indonesian Banks
Despite a series of measures introduced by the Indonesian authorities, including six benchmark rate hikes in a year and improved hedging tools, the rupiah has continued to suffer from souring sentiment towards emerging markets. As a result, local banks and corporates are facing increasingly limited funding opportunities, even as Indonesia’s bond market expands at record pace following the…
11 Jan 2019
Gabon: Political Turmoil Delays Essential Hydrocarbons Code Revision
As Gabon is the fifth largest oil producer in sub-Saharan Africa, the health of its economy is tied to its hydrocarbons industry. But since the 2014 oil crash, the legislation currently governing the sector has been wholly unsuitable. Now, the government is hoping to woo international oil companies (IOCs) by revising the code; but the President’s recent illness, along with a failed coup attempt…
7 Jan 2019
Brown Brothers Harriman: Emerging Markets Preview for the Week Ahead
EM FX ended the week on a firm note as stronger than expected US jobs data fed into risk-on sentiment. Fed Chair Powell also added to the positive sentiment Friday as he addressed basically every area of concern that the markets have had with the Fed. US rates backed up but not by enough to lend the dollar much support. In this current “wait and see” period regarding the US economy and the Fed,…
7 Jan 2019
Emerging Markets in 2019: What’s in Store for The Asset Class?
This year was not particularly forgiving for emerging market assets. Rising US interest rates and a strengthening US dollar coupled with a wider shift from quantitative easing to tightening led to broad-based repricing across the investment landscape. It was also a year that saw political and policy uncertainty, trade wars, and commodity and asset price volatility weigh heavily on market…
28 Dec 2018