Asset class correlation is rarely an exact science, but traders have found that some indicators are still invaluable triggers for timing entries and exits on countries such as India and Brazil.
Mohamed El-Erian, CEO of the world’s largest bond fund manager PIMCO, is warning that European leaders still need to do a lot more, and quickly, if they are to catch up and get ahead of the crisis.
Despite all the hand-wringing out there about more quantitative easing, the fact is that two massive rounds of Treasury intervention have yet to bring about the massive dollar depreciation people were nervous about.
Despite worries that the dollar’s long-term outlook looks weak, the greenback is definitely on an upward swing right now. This will create significant headwinds for emerging markets — and those winds are already blowing.
If you are wondering what flipped emerging markets currencies from being too strong for their governments’ comfort to the recent massive retreat, point a finger at the euro zone.
Diplomats in the euro zone are telling reporters that China has agreed to invest in an expanded European Financial Stability Fund. If so, this is huge.