Welcome to the latest issue of D&B's Country Insight Update.
Financial markets are showing signs of increasing divergence in the second half of 2018 on the back of escalating trade tensions, renewed US dollar strength, signs of a slowdown in China, and areas of financial tightening. In the US the stock market and the dollar have both strengthened, backed by economic growth, resulting in the US Fed raising its key interest rate by 25 basis points in late September. In Europe and Japan, central support is continuing to buttress US and local stock and bond markets, aided by flight from emerging economies.
In contrast, stock markets and currencies in emerging economies popular with portfolio yield-hunters have come under pressure, as investor sentiment has turned towards risk-off, with the MSCI EM 50 index down almost 10% year-to-date as September ended, in a process encouraged by almost 10% year-to-date as September ended, in a process encouraged by signs of weakness with China's yuan and broader economy.
Stressed emerging economies are facing diverse - if manageable - economic, political and security challenges. Commodity exporters, with the exception of oil exporters, are facing downward pressure on prices amid the threat of lower demand because of the trade wars.
These countries are also being hit by rising oil prices in a double whammy as oil supply is constrained both by US sanctions on Iran and Venezuela and by OPEC's decision (and that of other suppliers) not to raise production quotas before the end of 2018.
This complimentary newsletter from D&B's Country Insight Services group has been put together by their team of experts using the most up-to-date information to provide a snapshot of the latest macro market risk situation, and provides an excellent overview for those exposed to cross-border credit or investment risks.
D&B Country Insight Snapshots
Designed with the help of our customers these reports build on the key areas assessed by 'D&B's Country Insight Model' and deliver a perfect balance between mitigating risk exposure and providing insight into new opportunities.
Private consumption growth is set to moderate amid rising loan rates and energy prices.
The dispute between Poland and the EU intensifies.
The economy slips into recession during the second quarter.
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