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Inflation continues to tumble in key EM countries
Weekly investor research
15 May 2017
Inflation remains very benign in several large EM countries and with spare capacity inflation will only resurface slowly. China strikes a trade deal with the US, which should advance China’s inclusion in the global financial market. Saudi Arabia’s fiscal deficit has collapsed over the past year. Argentina’s central bank formally seeks to add to its already sizeable pile of FX reserves. Foreign holdings of EM local currency bonds remain very low. Europe continues to outperform the US. If this is surprising to you then maybe you are paying too little attention to exchange rate and political risks in developed economies.