This is a moment of pause in the risk-taking trend...we could be fluctuating slightly wider for emerging spreads for the time being.

Luis Costa

Categorized in : Company News

The CPI is bringing about a bit of selloff in the rates market. by Luis Costa

The CPI is bringing about a bit of selloff in the rates market.

There are several reasons why risk should start selling off once again. The spikes in dollar/yuan are once again suggesting the capital outflow pressure hasn't entirely ceased, and it has possible intensified over the past month.

It's a relief rally, again we are seeing rating agencies showing a big distortion in how they see credit risk.

Lira is not only suffering because of Erdogan's continuous criticism of monetary policy. (It) sells off because the current account gap still translates into a sizeable daily financing need, heavy reliance on short-term dollar borrowing makes this balance of payments very volatile. As usual, currency is the first channel to absorb the shocks.