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Jan Dehn, Head of Research at Ashmore, explains why there are two conditions that have to be satisfied before currency volatility can morph into major economic malaise.
12 Oct 2018
We saw a significant EM positioning washout last week, with weak longs getting punished. Anyone lulled into jumping aboard the EM train recently is getting crushed by sharply higher US rates. ARS and BRL bucked the trend and gained last week, but all others were weaker and were led by ZAR, CLP, and COP. MSCI fell 4.5%, while EM bond yields surged. With US rates still marching higher, EM is likely…
8 Oct 2018
EM FX ended the week on a mixed note. For whatever reason, the major currencies took the brunt of the dollar’s rebound, with every currency down on the week except for CAD (+0.1%). EM FX was mixed on the week, with TRY, RUB, and ZAR able to carve out gains even as ARS and CZK fell. China is closed all week and so we may not see any trade-related headlines. However, China reported softer than…
1 Oct 2018
With the October mini budget speech looming, South Africa’s economy and funding environment come sharply into focus; both remain in a precarious state. Analysts, investors, CFOs and Treasurers who spoke with Bonds & Loans on a recent research trip to the region emphasise that the way in which the macro environment evolves, and the way in which the government tackles key issues like land reform,…
28 Sep 2018
The recent perturbations across EM assets, the looming shadow of current and potential new sanctions and subdued growth at home have taken a toll on the Russian financial sector. But prudent fiscal and monetary policies and timely actions to minimize sanctions impact have helped shelter banks operating in Russia and the CIS from serious damage, DCM bankers and corporate chiefs have told Bonds &…
27 Sep 2018
As emerging markets continue to suffer from broad sell-offs by risk-wary investors, some see the parallels to similar developments that happened back in 2002. In this exclusive piece of analysis, Ashmore's Jan Dehn considers those parallels - and explains why they only go so far in explaining the current situation.
25 Sep 2018
EM FX ended Friday mixed, but capped off a generally firmer week as a whole. We think the EM-negative drivers remain in play: rising US interest rates and heightened trade tensions. FOMC meeting will be the key event this week, but the response to the implementation of US and Chinese tariffs will be a close second.
24 Sep 2018
EM FX ended mixed in Friday, capping off an up and down week. RUB and TRY initially firmed on their respective rate hikes but gave back some of those gains heading into the weekend. Trade tensions are likely to remain high, as press reports suggest President Trump is pushing ahead with tariffs on $200 bln of Chinese imports even as high-level talks are planned. With US rates pushing higher, we…
17 Sep 2018
Questions have swirled in recent months over Bahrain’s strained finances, but there is good reason to believe the country is in much better shape than sensational headlines suggest. This bodes well not just for the country, but fort the region as a whole, writes Anita Yadav.
4 Sep 2018
With Turkey seemingly approaching a critical junction in its economic trajectory, a call with the country’s Minister of Finance sheds light on how the country looks to tackle the rising challenges confronting it. Manulife analyst Richard Segal shares the details.
30 Aug 2018