Bali themes--policy dissonance, risks for growth and financial stability. Market expectations for future short-term rates are beginning to outpace the Fed—turbulence ahead? Robust leveraged loan and “covenant-lite” issuance in 2018. As the China-U.S. rate differential turns negative, portfolio debt flows to China slow sharply in September
Markets are fixated on 7.00 as an important threshold for $/CNY, thinking a move through that level could signal competitive devaluation. But the fundamentals of China and the US are diverging in important ways, not least since the escalating trade dispute is weighing on activity in China. Any freely floating currency would depreciate under similar circumstances. An increasingly market- and fundamentals-driven RMB should be no different.
Nomura’s Yuji Nakata and Bank of Queensland’s Peter Deans join FRT from Bali, during the IIF Annual Membership Meeting and IIF Asia-Pacific CRO Forum, discussing what the digital transformation of banking means for the risk management function (Brad Carr)
Ten years on from the global financial crisis, the financial system looks safer—but is still untested. October’s market selloff has meant tighter financial conditions across the board; worse for EMs. Assessing the impact of populism. As global debt rises, the marginal contribution of new debt to growth has declined significantly.
