Tag Archives: emerging markets

A recession would threaten central banks’ independence

Central banks are again under the limelight. With Mark Carney’s departure as governor of the Bank of England next month, Boris Johnson could try to seize the opportunity to curtail the central bank’s independence.

This should not come as a surprise. Already, Johnson’s soulmate from across the ocean, Donald Trump, has been making noises about the Federal Reserve being too independent (or rather: insubordinate) for his liking.

So, if these two authoritarian populists go for central banks, what are their chances of bringing them under their rule?

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Record inflows into bonds as Bull-Bear indicator approaches sell signal

The first year of the new decade begins with markets in a much more exuberant mood than at the beginning of 2019. Some of the world’s most important stock markets reached record highs in the last month of 2019 — but do investors feel that markets have peaked?

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China cannot afford to stop housing speculation just yet

When he finishes negotiating his “deal” with China, US President Donald Trump will probably try to take credit for the country’s shrinking current account surplus with the rest of the world.

However, the fact that China’s exports are slowing is not a new phenomenon, and it is not necessarily a reason to celebrate.

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Contrarian ‘buy’ signal is triggered again

Uncertainty about the outcome of the Brexit negotiations has hit new highs, President Trump seems determined to scare the markets witless with his threats of escalating the trade war, debt problems in China are accelerating – the perfect background for a contrarian ‘buy’ signal.

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Winners and losers from a Trump dollar intervention

Just as it was beginning to look like the bond market’s luck was finally running out, President Trump made some remarks that all but guarantee that the bond rally will go on for a little while longer.

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Home price falls threaten China’s capitalist communism

While all eyes are on Italy, the world’s second-largest economy is showing signs of trouble. China, this curious mix of communism and capitalism, is running out of steam – and ideas. Unless the Chinese government finds new ways to stimulate its economy, it might find itself facing the world’s biggest revolution.

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As Fed changes to dovish, emerging markets could rally

As the US stocks bull market is now officially the longest after World War II, fears are increasing that the end is nigh for the bulls. However, the approach of the US mid-term elections in November might mean not just that the bull market could continue, but also the end of the emerging markets rout.

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Turkey is just the canary in the coalmine

The headline may be a bad pun, but the warning is serious. Many people believe that the trouble with Turkey’s currency is confined to that country, but that is far from the case. Turkey is just the first country that implemented populist policies when the going was good to now pay for these policies. The markets are about to teach populists a lesson, and Turkey is the first instalment.

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Argentina shows the bad side of quantitative easing

This past week, there has been a frenzy of selling of emerging markets assets. The outflows from both stocks and debt in emerging markets reached their highest level since December 2016.

This amounted to $3.7 billion withdrawn from emerging market equities and bonds, according to data analysed by Bank of America Merrill Lynch. These outflows have helped push our old friend, the Bull/Bear indicator developed by BofA Merrill Lynch, to 4.8 — its lowest level since January 2017.

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