Rules of the game in emerging countries: a new element

In a recent post I mentioned that the improvement in the greenback had an strong impact on emerging countries. Capital outflows and lower emerging currencies were mentioned as a source of concern. We have to add the interest rate spread that is now wider than it used to be. It was almost stable since the beginning of 2017 with an average spread close to 330 bp. This is no longer the case since mid-April with the change in the greenback profile.
Rules of the game are deeply changing for emerging countries even if every country is not hurt in the same way. Rules have changed, then be attentive

The rules of the game have changed for emerging countries

The emerging countries’ environment is dramatically changing. It used to be an easy place to play but it is no longer the case. Stability in developed countries’ monetary policy was…

2 graphs on how the Fed is helping the Euro Area

Fed’s decision on Wednesday to keep a strict monetary policy will help the euro area. It will extend the monetary policy divergence between the Fed and the ECB and this…

Emerging Countries: A new fragility

Since mid-May emerging countries’ situation has changed dramatically. Large capital outflows and currency depreciation have weakened a lot of them. In the second half of August the focus was on…