Global Economics Update How big a worry is Turkey? The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis. This would be another blow for EMs as an asset class... 10th August 2018 · 1 min read
Emerging Europe Economics Update Where to watch for signs of stress in Turkey’s banks? The collapse in the lira has raised concerns about the health of Turkey’s banking sector. Banks’ dollar bonds yields and interbank interest rates are already pointing towards some stress, and these... 10th August 2018 · 1 min read
Nordic & Swiss Economics Weekly SNB won’t welcome franc’s safe haven boost The renewed appreciation of the Swiss franc this week as investors sought out safe haven assets will not have been welcomed by the SNB. But the franc is still weaker than it has been over the past few... 10th August 2018 · 1 min read
Europe Economics Weekly Worries over Turkey and Italy hit European markets While worries about the exposure of euro-zone lenders to Turkey weighed on the euro and European banking stocks on Friday, the economic spillovers to the region should be fairly modest. Meanwhile... 10th August 2018 · 1 min read
Latin America Economics Weekly Graft scandal rattles Argentine markets The Turkish lira may have surpassed the Argentine peso as the worst performing EM currency this year, but Argentine markets have still had a rough week. The lesson from other parts of Latin America is... 10th August 2018 · 1 min read
Global Economics Update How big a worry is Turkey? The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis. This would be another blow for EMs as an asset class... 10th August 2018 · 1 min read
Emerging Markets Economics Update Will Turkey’s crisis affect other EMs? Aside from the impact on a few small neighbouring countries, most notably Bulgaria, the direct risk of contagion from Turkey’s crisis to other EMs is fairly low. However, Turkey’s problems may add to... 10th August 2018 · 1 min read
Emerging Europe Economics Weekly Turkey on the brink Turkey seems to have been on the brink of a crisis several times this decade, only for the central bank to do just enough to steady the ship. But there are reasons to think that emergency interest... 10th August 2018 · 1 min read
Australia & New Zealand Economics Weekly Divining in different directions The chances that interest rates in Australia will rise a bit earlier than we expect have grown this week while it has become more likely that interest rates in New Zealand will be unchanged for longer... 10th August 2018 · 1 min read
Asia Economics Update Philippines: nearing the end of the tightening cycle The central bank in the Philippines (BSP) today increased its policy rate for the third meeting in a row, and left the door open to further rate hikes. We think at least one further increase in rates... 9th August 2018 · 1 min read
Emerging Europe Economics Update How can Turkey get out of its crisis? The lesson from other countries that have suffered from currency crises is that fiscal and monetary policy will need to tighten, preferably under the auspices of an IMF deal, to stabilise the economy... 8th August 2018 · 1 min read
EM Valuations Monitor EM corporate credit spreads appear unsustainably low Aside from a brief drop in July, emerging market (EM) credit spreads have generally been rising in recent months and are well above their January troughs. Nonetheless, corporate credit spreads in... 8th August 2018 · 1 min read
Emerging Europe Economics Update A fresh look at Turkey’s banking sector risks The plunge in the lira and rise in borrowing costs is likely to push the Turkish economy into a technical recession in the second half of this year. But the vulnerabilities that have built up in the... 8th August 2018 · 1 min read
China Economics Update Tariffs and renminbi fall won’t cause jump in inflation If carried out, China’s threat last week to expand tariffs to cover more than 70% of its imports from the US would nudge up import costs, though only very slightly. The renminbi’s recent depreciation... 7th August 2018 · 1 min read
UK Economics Update Market implications of a “no deal” Brexit While we still assume that the UK and the EU will reach some sort of agreement over Brexit before the deadline next spring, there is clearly a significant possibility of no deal. In this scenario, we... 7th August 2018 · 1 min read
China Data Response FX Reserves (Jul.) A rise in China’s foreign exchange reserves in July suggests that the People’s Bank did not deploy them to defend the renminbi last month. It may do so soon, however, given growing concerns over... 7th August 2018 · 1 min read
