Perspectives connected to the research.
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Low sovereign yields could conceal growing dependence on ECB bond purchases. Robin Brooks, Jonathan Fortun and Jonathan Pingle argue that yields held down during the pandemic were insufficient compensation for perceived risks, encouraging foreign investors to sell. Their June 2022 assessment highlights the tension between short term market stability and restoring private demand for peripheral government debt.
Read the workThe article cites Fortun on investors retreating from emerging-market assets, placing that financial pressure alongside food-export restrictions and the consequences of the war in Ukraine.
View detailsFortun discusses how lockdowns, currency weakness and geopolitical concerns contributed to foreign withdrawals from China. Reuters reports a second consecutive month of emerging-market portfolio outflows and distinguishes equity selling from continued demand for debt outside China.
View detailsA sharp deterioration in sentiment toward euro area growth stood out at the April 2022 Spring Meetings. Jonathan Fortun and coauthors describe how expectations moved toward their forecast of just one percent growth that year. Beyond discussions of Russia’s war and energy sanctions, they also identify rising concern about possible US sanctions on China, adding uncertainty to an economy already experiencing capital outflows.
Read the workA report coauthored by Fortun and Sergi Lanau attributes emerging-market inflation largely to supply shocks alongside incomplete economic recoveries.
View detailsDomestic investors helped emerging markets finance large pandemic fiscal deficits, with foreign buyers and foreign currency issuance playing a smaller role in most economies. This April 2022 analysis explains how a more stable domestic investor base can ease credit and refinancing risks, while warning that government borrowing may displace private credit during recovery. Chile and Colombia stand out for using foreign currency debt and increasing dollarization.
Read the workFortun discusses foreign investors' reassessment of Chinese exposure as emerging-market portfolios recorded their first monthly outflow in a year.
View detailsEmerging market portfolios lost $9.8 billion in March 2022, according to Jonathan Fortun’s April tracker. Equity outflows of $6.7 billion exceeded the $3.1 billion withdrawn from debt, with Chinese equities accounting for $6.3 billion of the equity losses. The breakdown identifies China’s stock market as the main concentration of that month’s portfolio withdrawals.
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