Emerging Markets - Risk Off?

I would like to share my recent finding in the Emerging Markets ETF chart, as it could be a wake-up call for investors from the distant 2007.

Usually, emerging markets provide a higher return amid a higher risk profile. When investors cut the risk, they often start with emerging markets to quit until the liquidity is available.

The chart below represents the dynamics of iShares MSCI Emerging Markets ETF (EEM). It tracks the MSCI Emerging Markets Index covering 25 countries shown in the following graph.


Source: msci.com

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The Dollar Takes 'EM Down

Aibek Burabayev - INO.com Contributor - Metals

Dear readers, I am very grateful to get all your feedback and suggestions that you kindly share with me all the time! Rasesh Shukla, one of our regular readers asked about the Emerging market currencies and particularly about Indian rupee in a comment this month. And I am pleased to share my thoughts with all of you in this post.

Chart 1. 5-Year Dynamics of Top FX vs. EM FX

5-Year Dynamics of Top FX vs. EM FX
Chart courtesy of tradingview.com

I want to start with the comparison chart of the top currencies presented by inverse dollar index, consisting of 6 currencies: Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc (orange line) versus the emerging market currencies presented by WisdomTree Emerging Currency Strategy Fund (CEW, green line). The former is quite representative, it tracks the value of the following 15 currencies: Mexican Peso, Brazilian Real, Chilean Peso, Colombian Peso, South African Rand, Polish Zloty, Russian Ruble, Turkish New Lira, Chinese Yuan, South Korean Won, Indonesian Rupiah, Indian Rupee, Malaysian Ringgit, Philippine Peso and Thai Baht. Continue reading "The Dollar Takes 'EM Down"

The Perils Of A Russian Turkish Conflict

Lior Alkalay - INO.com Contributor - Forex

Unless you’ve been asleep for the past 72 hours you’ve no doubt heard that Turkey shot down a Russian fighter jet. Of course, whether the Russian fighter jet did or did not cross into Turkish airspace is debatable.

What is not debatable, however, is the rising tension between the two countries, which seems to be leading to a trade war. Though less grave than a military conflict, it could ignite a rout in Emerging Markets and their currencies.

What Ignited the Mess

Even before the unfortunate incident it was clear that tensions between Moscow and Ankara were heating up. The reason for that is a very clear conflict of interest between Russia and Turkey over what’s happening in Syria. More specifically, it involves the area of Turkey’s border with Syria. Continue reading "The Perils Of A Russian Turkish Conflict"

Asian Financial Crisis: Now and Then

Lior Alkalay - INO.com Contributor - Forex

Are we set for a rerun of the 1997 Asian Financial crisis? Well, as Mark Twain said once, history does not repeat itself but it rhymes. The current turmoil does strikingly resemble that of the original 1997 Asian financial crisis. However, unlike the 1997 crisis, today’s circumstances are quite different.

Asian Financial Crisis of 1997

What initiated the Asian financial crisis back in the 90s? Well, it was the culmination of many things. Primarily, though it was the inability of Asian and other emerging economies to finance themselves. This was generally due to large current account deficits which led emerging markets to accumulate foreign debt. Eventually, they become dependent on foreign creditors.

When investors’ appetite for emerging market debt waned, those Asian economies had difficulty financing themselves. And let’s not forget Russia, which, coupled with its own circumstances, was pushed to default. Continue reading "Asian Financial Crisis: Now and Then"

The Rise of the Rest

One great thing about my position here as Director of Marketing is my extensive contact list. I say that because I have access to thousands of excellent traders, investors, and economists at my finger tips! So when things around the world catch my attention, I can quickly find someone who can give me the skinny on what's really going down. One of my contacts is Nicholas Vardy, Editor, The Global Guru, and he's got a MUCH better pulse on the world aboard then I do. That's why I asked him to give us his reasons why the markets outside the US are doing so well and WHY!

He told me he'd love to get feedback from the Trader's Blog readers, so let's not let him down! You can also visit The Global Guru to get his new report on his favorite global picks.


Make Your Fortune from the "Rise of the Rest"

The inevitable decline of the United States is now firmly part of conventional wisdom. The profligate-spending Obama Administration -- consider that the $1.42 trillion U.S. budget deficit in 2009 is bigger than the entire economy of India -- and its efforts to transform the United States into a European-style socialist democracy marks the death knell of what was once a great country. The future belongs to China and the rest of Asia. "Old Europe" is a living museum that barely merits mention.
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