For more information please contact us
ashmail [at] ashmoregroup [dot] com (Email Ashmore)
The vicious circle of monetary easing
Weekly investor research
01 February 2016
The Weekly explains why the near-exclusive reliance on monetary easing to deal with problems in developed economies only
stores up problems for the future and how investors can avoid the eventual catastrophic losses. The Weekly also notes that
the explicit sovereign backstops supporting Emerging Markets’ (EM) national oil companies are now beginning to make
themselves felt. Brazil’s current account continues its dramatic improvement, but the fiscal balance will take longer to improve.
Turkey drops the last pretence to adopt a sustainable monetary policy framework. Argentina slashes subsidies. China’s latest
PMIs are consistent with China’s continued rotation from export to consumption led economy. South Africa’s trade balance
massively beat expectations, Mexico’s consumer-led expansion continues and Philippines just racked up the strongest growth
rate since the 1997 Asian Financial Crisis. The global backdrop improved as Japan joined the ECB in cutting rates to negative
and the FOMC reluctantly issued a dovish statement.