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Global noise and relative EM quiet
Weekly investor research
23 September 2019
Geopolitical risks increased after the attack on Saudi Arabian oil facilities, but the odds of a major escalation in tensions with Iran seems low. The US and China continue to move slowly towards a truce over trade. The US Fed cut the policy rate by 25bps. Concerns over the functioning of liquidity markets in the US are likely to be short-lived. In Emerging Markets, events were more muted. The central bank in Brazil cut the policy rate by 50bps to 5.50%, Indonesia also cut rates, Venezuela’s opposition split, prospects for Saudi financial assistance to Lebanon improved, India slashed the corporation tax rate, Ghana’s inflation rate declined and Ethiopia and Egypt remain at loggerheads over the pace at which the reservoir for the Grand Ethiopia Renaissance Dam will be filled.