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European Central Bank has one item left in its toolkit: dual rates

A version of this article originally appeared in the Financial Times last week.

There is a widespread assumption that the European Central Bank — like other major central banks — has reached the limits of monetary policy, and that the best we can hope for with Christine Lagarde’s reign is political astuteness in cajoling reluctant politicians to embrace a fiscal stimulus.

This is n…

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EM Debt: 2019 review and 2020 outlook

2019 proved to be a spectacular year for returns in most asset classes and emerging market debt was no exception. Returns were driven by a combination of cheaper valuations to begin with and also helped by the market-wide U-turn in going from pricing in Fed hikes to cuts and by the subsequent US rate rally. Some key risks were also priced out as the year moved on, including the US-China trade…

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The 2020 geopolitical risks that matter for emerging markets

Last year was very eventful in emerging markets with its share of US tariffs/sanctions, regime changes in many countries, mass protests across the board and Carlos Ghosn escaping Japan to soon-to-default Lebanon on the very last day of the year! 2020 promises many geopolitical risks. We have compiled some of the key risks below for developing economies, including “the biggest crisis no one is …

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