My colleagues and I continue to see further medium-term weakness for the US dollar and, in this respect, favour emerging market (EM) currencies. Our top picks in our key market views are the Chilean peso (CLP) and the Singapore dollar (SGD). Our other EM favourites include the Mexican peso (MXN), Brazilian real (BRL) and South… [Read more]
As I write this, Japan is once again in a funk. The yen has come ever so close to its post-WW2 high of JPY79.70/US$ seen in 1995, the Nikkei has touched 16-month lows, and now, the governing Democratic Party of Japan (DPJ) has become embroiled in an internal power struggle between Prime Minister Naoto Kan… [Read more]
Business Monitor’s bullish stance on a host of emerging market (EM) currencies in recent quarters reflects one of our core macroeconomic assumptions, namely that unprecedented quantitative easing and loose fiscal policy measures in the US in 2009 would ultimately foster significant depreciatory forces for the US dollar. While this may not be visible in the… [Read more]
In this week’s podcast Mark Schaltuper (Head of Latin America Analysis) and Terry Alexander (Head of Country Risk and Financial Markets) discuss the return of risk appetite to global markets. Assessing recent moves and a stronger-than-expected bounce in developed markets’ equities, we explore potential opportunities and the implications for emerging markets.
Risk Watchdog has just returned from Greater Tokyo, where I spent a week trying to get a handle on what’s happening in Japan. Regular readers will recall that I have generally been bearish on Japan’s economy, so this was a good opportunity for a first-hand refresher. I say ‘Greater Tokyo’, because I also visited Tokyo’s… [Read more]
I pity Kaoru Yosano, who has just succeeded Shoichi Nakagawa as Japan’s new finance minister. Nakagawa was forced to resign on Tuesday after delivering a Sylvester Stallone-like performance at a press conference following the G7 summit over the weekend (the comparison is somewhat harsh on Stallone). Nakagawa was widely perceived to be drunk, although his… [Read more]
I see several signs that risk appetite is returning to the markets, which could mean we are in for a rally in the coming weeks and months. Key barometers such as sterling-yen (in fact, many yen cross rates), the VIX index, the Baltic Dry index, and Treasuries are showing signs of reversal. On a relative… [Read more]
