Emerging Market Massacre Continues - Latam FX At Weakest In History

All the pesos are getting pounded - Argentine, Colombian, Chilean, and Mexican - but the 'best indicator of EM turmoil' - the Brazilian Real - is really suffering...

But the Rand is the worst...

As the Emerging Market massacre continues to accelerate... this is the worst start to a year since at least 2010...

Amid an incessantly strengthening USDollar.

And the collapse of the EM FX carry trade...

Latin American currencies just keep selling off even as commodities, the region's main exports, rise. The LACI index is at the lowest since January 2016...

And the lowest relative to emerging markets peers ever...

It's not just FX, Emerging Market Debt is suffering its worst year since at least 2012...

Bloomberg's Eric Balchunas points out more evidence of calm before EM ETF bloodbath is traders (EEM) are bailing now, and allocators (IEMG) while not yet leaving haven't added inflows at all for 20+ days straight...

Roughly translated - the professionals are dumping to retail (while we have previously noted just how exuberantly the professionals are pitching this 'dip' as a buying opportunity in EM)...

And Bloomberg's Lisa Abramowicz points out that the biggest local-currency emerging-markets ETF has lost nearly 20% of its assets since the beginning of April, dropping to $6.5 billion from $7.9 billion.

The storm before the bigger storm.

Comments

surf@jm Fri, 05/18/2018 - 09:36 Permalink

Hide the dogs and cats, and hoard the toilet paper........

Think I can get an aspirin tablet in a South American hospital by tomorrow?.....

sillycat Fri, 05/18/2018 - 10:30 Permalink

for all this talk not a single recommendation.

Is it a good time to short ARGT now or no?? It has stayed flat since May 8.

very easy to blabber on and on, but what's the point of this drivel if there is not even a hint of opinion.

Burticus Fri, 05/18/2018 - 10:32 Permalink

When the Chilean peso bottoms, it should be a good time to go down there and buy a big farm between Santiago & Talca and a vacation home on the ocean in La Serena.