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The Tightening Tantrum continues

Weekly investor research

10 November 2014

Emerging Markets (EM) FX has outperformed both EUR and JPY during this fit of USD exuberance, but the USD surge needs new drivers to keep going or momentum is likely to weaken. Brazil undertakes another policy adjustment. Russia warns the markets that it may intervene. Tensions rise again in Eastern Ukraine as both sides have incentives to keep the fires burning in Donbass. Hungary prepares to finally rid households of FX denominated mortgages. We also discuss the all-important difference between QE Japanese style and anything the ECB might conceivably do. We conclude with a brief comment on the impact of the US mid-term elections on EM.

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