Currencies Emerging markets Market Strategy

Market Focus (EM): Turkish Lira’s fallout resumes

Key takeaways Turkey is once again suffering from investors defiance toward its currency, as in 2018 and in March 2020, putting it apart from other emerging markets Turkey has adopted some unorthodox policies to support the Lira while essentially continuing its loose monetary policy, which fuelled a credit boom in 1H 2020 A further weakening […]

Bonds Currencies Economy Emerging markets ENG Equities Market Strategy Sovereign Bonds

Market Focus: Increased dispersion in Emerging Markets amidst an uncertain outlook

the economies of Mexico, Brazil, Russia, India, Indonesia, South Africa and Turkey have all been hit by the coronavirus crisis. EM currencies, equities and bonds have been particularly impacted by the global market fallout that occurred in February-March 2020. As has been documented by the IIF, Global investors pulled out their funds at record speed during that acute episode of market stress. Since then, the volatility of DM and EM markets has somewhat receded and the general sentiment toward risky assets has improved, not the least because the world’s major central banks committed trillions of dollars to support the markets and to put a de facto backstop on assets valuations . However, EM assets remains vulnerable to new waves of volatility and risk aversion that would trigger additional capital outflows.