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IIF Capital Flows Tracker: Strong Recovery

Emerging markets saw portfolio inflows of $33.9 billion in November, the strongest inflows since January. Our broader measure of net capital flows remained negative in October, driven by outflows from China. 

Global Macro Views: EM Positioning after the Sell-Off

2018 has been a difficult year for many emerging markets, but sentiment has recently shifted more positive in many cases, reflecting cheap valuations, a dovish Fed, and a China-US trade “truce.” With sentiment more positive, market focus is squarely on positioning, with people asking how much positioning was cut during the EM sell-off. We develop new data that give a comprehensive look at EM positioning, combining IIF work on capital flows with valuation changes on the stock, where the latter historically account for the bulk of positioning changes.

Weekly Insight: White Noise

Equity market volte-face highlights renewed concern about U.S.-China trade tensions; Pace of decline in global central bank asset purchases accelerates; High debt-to-cash levels in the corporate sector—another sign of trouble for credit markets; Carry trade returns still generally sub-par, but looking more attractive for a few emerging markets

Global Macro Views: Capital Flows during the EM Sell-Off

This year’s EM sell-off underscored the importance of FX valuation with markets, in dramatic fashion, going after meaningful FX overvaluations. At this point, our models signal neutral or cheap valuations for much of EM, so that currency misalignments are less of a risk factor as we approach 2019. But a positioning overhang in emerging markets remains a material risk factor, given the intensity of capital flows to EM resulting from G-3 monetary stimulus. This piece starts a series of Global Macro Views on EM flows and positioning, which we kick off today by looking at flows over the EM sell-off this summer.

FRT Episode 18: IIF Future Leaders in Silicon Valley

During their tour of leading enterprises in Silicon Valley and San Francisco, IIF Future leaders members Neeraj Khanna (Wells Fargo), Evy Wee (DBS), Natalia Bailey & Jonathan Fortun (both of the IIF) share their main takeaways and insights (Natalia Bailey, Jonathan Fortun).

Sticky Notes: November 28, 2018

In this edition of Sticky Notes, we look at key issues facing the incoming U.S. Congress, new realities in Mexico, U.S.-China trade talks, and potential auto tariffs.

Global Macro Views: Euro Periphery Current Accounts

Euro periphery current account balances have almost all swung into surplus, which is often cited as positive evidence that competitiveness has been restored. But the swing from current account deficit to surplus has a cyclical component, reflecting depressed import volumes due to still large output gaps in some cases. We estimate cyclically-adjusted balances for a range of output gap estimates. Adjusting for slack, Euro periphery current accounts are likely still in deficit.

Global Debt Monitor Insights - The Great Corporate Debt Binge Begins to Bite

Looking across the countries we cover in our Global Debt Monitor, non-financial corporate debt is at a record high of $75 trillion—up by $16 trillion since the 2013 taper tantrum.

Global Macro Views: Output Gaps and Euro Fair Value

The Euro zone current account balance is in sizeable surplus, which some see as a sign the Euro is undervalued and needs to rise. But the headline surplus in part reflects persistently large output gaps, which may be inflating the external balance by depressing import volumes. We derive a cyclically-adjusted current account balance for the Euro zone, which turns out to be negative, potentially signaling Euro overvaluation.
 

FRT Episode 17: ‘Explainability’ in Machine Learning

FRT welcomes Chisoo Lyons, Vice President of Analytic Ventures at FICO. FICO kindly provided a case study  in the IIF’s recent paper on Explainability in Machine Learning, and Chisoo elaborates on how FICO has been using Machine Learning and big data to help get better insights, with an emphasis on tackling ‘explainability’ (Natalia Bailey).

 

 

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