The fixed income investment community has been shaken up by growing concerns over Greece’s creditworthiness, which appear to be spreading like a bush fire across eurozone peripheral states. While concerns over significant sovereign credit risk are currently limited to the euro area and Dubai, my colleagues at BMI believe that Latin American government credit, too, [Read more...]

After a rough 2009, Mexico’s economic fundamentals look set for a breather over the next couple of months, as exports, manufacturing and unemployment levels continue to benefit from unprecedented fiscal stimulus north of the border. If the US Federal Reserve opts to keep the monetary floodgates open for a while longer, this could translate into [Read more...]

We have previously highlighted on Risk Watchdog how the aftermath of the global financial crisis has exposed the structural imbalances in many developed economies, while also singling out those emerging markets which are in a fundamentally sound position to exploit the global economic recovery. Poland and Greece are certainly two prime examples at opposite ends [Read more...]

Having rung up over US$25bn in debts, and four state bailouts in the past decade, Japan Airlines – Asia’s largest airline – has finally filed for bankruptcy protection. The beleaguered company made the filing yesterday, and although the government has pledged to keep the carrier in the air, almost 16,000 jobs will be slashed in [Read more...]

Fiscal deficit management and debt sustainability are two vital economic themes right now, given that governments across the world have been boosting public spending to reinvigorate their economies. In this respect, two charts immediately grab my attention. These charts appeared in Business Monitor Online earlier today, and in BMI’s weekly Emerging Markets Monitor magazine.

The [Read more...]

Japanese Government Bond (JGB) yields have been testing key technical levels over the past day or so. On Tuesday, the 10-year yield hit a five-month high of 1.48%, up sharply from 1.25% at the beginning of October. The yield failed to break higher on Wednesday, but I am watching resistance (or support in price terms) [Read more...]

My colleagues and I have long viewed the spread of the Russian 5-year credit default swap (CDS) over its Turkish counterpart as a useful broad-based indicator for investor risk perceptions in Central and Eastern Europe (CEE). While Russia’s relatively weaker macroeconomic profile has meant that its sovereign CDS has underperformed amid spikes in investor risk [Read more...]