The Turkish lira continues to tumble. This feels like a rerun of the last lira crisis back in August 2018. Surprisingly little has changed fundamentally in the nearly two years that have passed, as officials have largely refrained from taking any significant actions except those that make it even harder to invest in Turkey. Turkey used to be the darlings of EM. Now, we fear it will end up being like Argentina, where it will take a generation for foreign investors to return.
Win Thin is the Global Head of Emerging Markets Strategy and has over 25 years of investment experience. He has a broad international background with a special interest in developing markets. Prior to joining BBH in June 2007, he founded Mandalay Advisors, an independent research firm that provided sovereign emerging market analysis to institutional investors. Prior to that, Win was a vice president and international economist, covering major emerging markets in Asia and Latin America for Alliance Capital Management
Risk assets remain hostage to swings in market sentiment. Stronger than expected US jobs data last week was welcome news. However, the tug of war between improving economic data and worsening viral numbers is likely to continue this week, with many US states reporting record high infection rates.
Jul 6, 2020
Risk assets came under pressure last week as the virus news stream worsened. It’s clear that large parts of the US will be forced to delay reopening until their virus numbers improve. Markets had gotten too bullish on the US recovery story and so this reality check soured sentiment. This is a very important week for US data, and we think risk sentiment will remain under pressure ahead of what we…
Jun 29, 2020
EM and most risk assets came under pressure last week as rising virus numbers and weak economic data outweighed the favorable liquidity backdrop. This week brings preliminary PMI readings for much of the world, with further improvement from May expected. Some countries and states will continue to ease lockdowns this week, while Beijing struggles to contain an outbreak. The liquidity backdrop…
Jun 22, 2020
EM and other risk assets stabilized to end the week after Thursday’s selloff, but remain vulnerable. The risks ahead are the same as before, which include a second wave of infections as well as a longer and shallower than expected recovery in global growth. The Fed’s message of low rates as far as the eye can see was balanced by Powell’s grim outlook for unemployment. The liquidity story should…
Jun 15, 2020