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
On the same topic
What to expect this week ? December 2 to 8, 2019
Christine Lagarde at the European Parliament on December the 2nd. Markit and ISM surveys, German industrial orders, the Chinese external trade and US employment. The COP 25 in Spain. Highlights…
Governments against the euro zone
The ECB monetary policy became frankly accommodating only because Draghi had the perception that governments and the Commission would never let go on fiscal policy.
Will Christine Lagarde fall into the same trap as Draghi?
Will Christine Lagarde fall into the same trap as Draghi?
A very relevant column on the new stages of the trade war
This column, “The Case Is Only Growing for an Economic Forever War”, by Shawn Donnan, was posted on the Bloomberg website. President Donald Trump’s trade war with China has become…