Emerging Markets |

Emerging-Market Currencies Sink to One-Year Low on Dollar Gains

LAGOS (Capital Markets in Africa) – Emerging-market currencies deepened their slide to the lowest level in a year and stocks retreated amid a U.S. dollar advance. Every developing-nation currency tracked by Bloomberg fell, and an MSCI gauge of equities extended its selloff from a January peak to 17 percent. South Africa’s rand slipped as the central bank warned of a “challenging” growth outlook, while Chile’s peso joined a slide in copper. The Chinese yuan sank…

All Emerging-Market Currencies Fall as U.S. Dollar Extends Rally

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JOHANNESBURG (Capital Markets in Africa) – U.S. dollar left every emerging-market currency in the red on Wednesday as stocks retreated. Russia’s ruble led losses after crude oil slumped and U.S. representatives mulled new sanctions against the country. The Chinese yuan sank to the lowest level since August 2017, bolstering speculation that officials are comfortable with currency weakness. Mexico’s peso posted the biggest decline among Latin American peers, trimming its advance from the July 1 presidential election. The yield on…

Japan’s Retail Army Is Piling Into Rand While Shunning Lira

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JOHANNESBURG (Capital Markets in Africa) – The lira’s loss is the rand’s gain. Japan’s retail investors are boosting holdings of South Africa’s currency at the fastest pace since 2009 while cutting foreign-exchange exposure in Turkey. Individual investors from the Asian nation have raised their net rand long position against the yen for five straight months through June, according to data from Tokyo Financial Exchange Inc. They have been reducing their net lira positioning for four months. “Japanese…

Government debt at $14 trillion at end-2017, equivalent to 48% of GDP

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LAGOS (Capital Markets in Africa) -The Institute of International Finance indicated that the level of general government debt in emerging markets (EMs) reached a record-high of $14 trillion at the end of 2017, which is equivalent to 48% of aggregate EM GDP. It noted that government debt in EMs grew by $6 trillion since the end of 2010, with significant increases in the public debt levels of Brazil, Colombia, Egypt, South Africa and Ukraine. Also, it pointed out that government debt…

Emerging-Market Carry Trades Set for Worst Quarter Since 2011

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LAGOS (Capital Markets in Africa) – A strategy that made emerging-market investors money in the previous five quarters is getting upended by a stronger dollar and the prospect of a prolonged trade war. A Bloomberg currency index that measures carry-trade returns from eight emerging markets, funded by short positions in the dollar, has slumped 8.9 percent since end-March, set for its worst quarterly loss since the three months through September 2011. After rallying since 2016, what’s turned the strategy…

No Rest for Emerging Markets as Trade Jolts Herald a Wild Week

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LAGOS (Capital Markets in Africa) – Emerging markets got little relief as the escalating trade war between the U.S. and China hurt most major currencies and sent stocks to their lowest level since December. With OPEC clashing over output, looming Turkish elections and the potential for further fallout from Argentina’s foreign-exchange crisis, there was no respite in sight. Developing-nation currencies have retreated for three consecutive weeks and are now on pace for their biggest quarterly decline since…

Bond Bonanza Raises Threshold for New Emerging-Market Debt Sales

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LAGOS (Capital Markets in Africa) – Emerging-market issuance is losing its fizz and bond investors are divided in their appetite for risk after a record year for hard-currency debt. With about $290 billion in placements by borrowers from developing nations so far this year, volumes have been slipping since the second week of April when a slew of multi-tranche deals from Saudi Arabia, Qatar and Egypt accounted for half of the $50 billion of bonds…

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