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Falling commodity prices, rising terms of trade
Weekly investor research
12 January 2015
Some 70% of the largest Emerging Markets (EM) countries have experienced positive terms of trade shocks averaging more
than 7% since June 2014, while developed economies have on average been adversely affected by the 27% decline in
commodity prices over this period. High level talks between Russia, Ukraine, France and Germany to find a solution to the
situation in Eastern Ukraine are scheduled to begin this week. Venezuela alleges that it has secured USD 20bn in fresh funding
from China, while it continues to adjust to lower oil prices with low-profile changes in the FX regime. India’s central bank looks
set to buy more US dollars in what could prove a risky move for the longer-term. Polls in Argentina show the main candidates
largely neck and neck ahead of elections this year that will mark the end of the Kirchner era.