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Reprieve in Emerging Markets may be Nearly Over
We identified three forces that have undermined emerging markets as an asset class: The US policy mix, which results in upward pressure on the dollar and interest rates, competes with other capital importers. This coupled with the second force, the rise in oil prices (which to some extent is also the result of US policies, such as the embargo of Iran) leads to the deterioration of many emerging market economies external balances and weakens growth. The third force is the domestic policies pursued that can repel or attract global savings. What has changed? Oil prices have eased. Since October 3, Brent has fallen 10%. ... (full story)