26 July 2016 at 10:00 GMT
- A stronger USD effects countries such as Mexico or Nigeria in different ways
- Having a closer look at emerging markets might reveal opportunities
- Naturally engaging in small countries with less developed economies bears risks
- EM sentiment recovers with commodities and investors are coming back
By Walter Kurtz*
Today we take a look at a few developments in emerging markets not looked at that often.
1. Growth in Mexico's retail sales has been solid, consistently beating expectations.
2. We know that a portion of these improvements in Mexico's retail sales has been driven by remittances (due to stronger US dollar). Is the nation's credit expansion also responsible for increased spending?
consumer confidence rose more than expected. Green shoots?
4. The Nigerian
naira continues to weaken (hitting another record low) as the country's FX reserves dwindle. The chart below shows one dollar buying a larger amount of naira.
5. Here is a scatter plot showing sovereign CDS spreads vs. government bond
ratings. NGN stands for Nigerian naira.
6. Indian shares continue to rally, approaching a one-year high.
7. Emerging markets sentiment recovers with commodities
8. The Merrill Lynch investor survey shows allocators gradually moving back into emerging markets.
Turning to Food for Thought, we have 3 items today: 1. The changing landscape of US women in the workforce.
2. The best-paid CEOs run the worst-performing companies?
3. iPhone users spend more time on Pokemon Go than other popular apps - including Facebook
— Edited by Clemens Bomsdorf* Walter Kurtz is an alias
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