OPEC deals in BRENT (BNO, quote) not WTI crude and this is the benchmark to watch if you think the Egypt situation is spiraling towards a Suez Canal shutdown. Additional middle east tension, Syria, Turkey, Iran…these all play into the supply disruption trade that really hasn’t taken place yet, but getting closer to breakout levels.
It comes as no surprise that performance results year-to-date from the Middle East and North Africa are mixed. While countries within the two regions are either involved in or affected by military and political conflicts, terrorist activities and volatile oil and natural resource markets there is room for optimism.
Staying with the emerging market vs. domestic market trade, UBS is out with their Global Emerging Market Strategy Report, otherwise known as GEMS.
After weeks of delay, the second round Egyptian Presidential elections were finally released earlier this week, with Islamist candidate Mohammed Morsi winning in a tight contest. This begs the question: How should investors in the Egyptian economy treat this development?
Although I wouldn’t recommend anyone ever rushing into a trade without doing their own homework first, I wanted to give Emerging Money readers a jump start for the holiday weekend.
Stories about the Egyptian economy (EGPT, quote) leading up to the country’s first ever free and fair presidential elections were somewhat positive, with headline numbers indicating that the country grew 5.2% year-over-year. However, digging a little deeper, it becomes obvious that this data is not particularly impressive and that the structural impediments to the Egyptian economy remain in place.
Global markets continued to move downwards on Wednesday as fears relating to the euro crisis escalated. Elsewhere, Egyptians went to the polls, the World Bank urges the Chinese to spend more, and Vladimir Putin appointed a new cabinet.