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The article reports on IIF analysis coauthored by Fortun about carry-trade unwinding, currency volatility and the policy buffers available in Latin America.
View detailsEmerging market portfolio inflows reached $36.5 billion in July 2024, with debt attracting $29.4 billion and equities $7.1 billion. Chinese stocks nevertheless recorded $0.9 billion in outflows. Bond demand led the aggregate recovery, while the equity total concealed continued selling in China.
Read the workA strong dollar does not affect every Latin American economy in the same way. Differences in production, policy, external debt and trade determine how currency movements transmit across the region. The analysis also considers how carry trades and the geopolitical use of the dollar can amplify pressures, making adaptation to dollar dominance a continuing policy challenge.
Read the workFortun discusses how new borrowing by South Korea, Turkey and Mexico supported July portfolio inflows into emerging markets. He also considers how prospective US monetary easing and the unwinding of yen-funded carry trades could affect demand.
View detailsWeak US activity data and a shift in Bank of Japan policy helped trigger the August 2024 market scare. The unwinding of carry trades transmitted pressure to emerging market currencies and capital flows. Despite rising recession fears and expectations of deeper Federal Reserve cuts, the assessment retained a constructive outlook for the United States and emerging economies.
Read the workFortun comments on Bolivia's shortage of dollars and the behavior of households seeking access to foreign currency.
View detailsJune 2024 brought $16.1 billion in portfolio inflows to emerging markets, including $11.2 billion into debt and $4.9 billion into equities. Chinese stocks experienced $1.3 billion in withdrawals. The figures separate positive aggregate investment from a continuing divergence between China and other equity markets.
Read the workFortun assesses the strength of Asian investment flows as emerging-market portfolios record another month of foreign inflows.
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