Sunday, 19 August 2018

Stories we should be thinking about

Time again for my weekly set of finance and related stories and graphics ahead of the new working week.

Stories we should be thinking about  

We have got to start with the emerging markets…

...and what a bounce in volatility!  Kind of noteworthy when you look when the last big
bounces were (at times of generalised high market volatility).  Smells like an
opportunity to me.

Of course there is Turkey.  And for me there's no surprise from this conclusion from
a major ratings agency "Fitch Ratings: Turkey Moves Insufficient to Restore Policy
Credibility" (link here)

For me, on the Turkey question, it is reform or regime change.  As @IIF notes:
‘Assuming meaningful drop in current account deficit, healthy rollover rates,
and no domestic capital flight, there could still see reserve losses ahead’
Well at least the currency is cheap...but as this latest Big Mac Index observes could say that about almost all currencies out there against the dollar.  

And just maybe that pressure is starting to have an impact.  This came out on
Friday...and could have some interesting implications given I stick with the
view that the too strong dollar is the biggest imbalance out there currently
for emerging markets, commodities, allocation preferences and related.

Also fascinating to see for emerging markets that despite all the angst out
there currently, on average ‘most emerging markets are now less vulnerable
than in 2008’.  That would be my gut feel too...

What a divergence.

You can access the rest of Stories we should be thinking about HERE.

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