Real money flows into EM stocks and bonds have surged recently, perhaps in anticipation of a benign outcome to China-US trade talks. Our daily tracking estimates flows into non-China EM at $23 bn in Q2. Our measure of China’s "core" current account surplus remains healthy, but additional US tariffs could tip the balance and cause RMB to fall.

Last year we unveiled a new measure of genuine FDI flows to EM which strips out reinvested earnings to focus only on "true" FDI flows. This measure of "true" flows has fallen to its lowest level in 20 years, a global FDI shortage that impacts emerging as well as frontier markets.

The Fed is likely to reignite a wall of money to emerging markets, and our high frequency tracking of flows already shows a sharp spike. As the hunt for yield restarts, positioning in EM is a central question. South Africa is most over-, Brazil and Russia most under-positioned.

Our high frequency trackers show a substantial pick-up in flows, though the underlying picture is weaker than headline numbers suggest. The rebound is concentrated in China, with Mexico and Indonesia also up, while the flow picture to India, South Africa, Turkey and Thailand is weak, even after large outflows during the emerging markets sell-off last year.

Our trackers do not point to a convincing pick-up in flows beyond China, with flows to key emerging markets like India and South Africa quite weak, even after sizeable and persistent outflows during last year’s 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.

China's current account has traditionally registered large surpluses, but has swung into deficit this year based on data from Q1 through Q3, adding to the case that the RMB could be overvalued and needs to depreciate.

We turned more constructive on emerging markets some weeks ago, given that the EM sell-off eliminated some of the biggest FX overvaluations. But a.

Argentina's Peso and the Turkish Lira have weakened substantially, with increasing concern in markets over potential contagion to other EMs. Non-re.

Early this year we signaled rising EM risk , especially for Argentina and Turkey. We also flagged growing potential for contagion to the broader EM co.

Changes in China's FX regime have been associated with capital outflows, notably the 2014 band widening and the "step" devaluation in August 2015.

A distinction is often made between hot money and more stable capital flows. We examine which non-resident capital flows to EM look most like hot mone.

We recently examined the pattern of EM flows to emerging markets, where our innovation was to control for the role of reinvested earnings, which.

We document the resilience of Euro zone bank deposits during past stress episodes. There is only one major Euro zone economy - Greece - where deposit.

Foreign direct investment flows to EM look different than you think. This is because reinvested earnings constitute much of the FDI flow to EM, whe.

The Argentinian Peso and Turkish Lira have fallen sharply this year, but spillovers to the broader emerging markets complex have been limited. We e.

We develop a measure of core capital flows for Saudi Arabia, which has a similar intuition to widely-used core inflation metrics. Core CPI strips o.

In a Global Macro Views in December we introduced BoP Nowcasts, "¦ which map commodity prices and capital flows into daily forecasts for the 2018 BoP.

We examine how EM reserve accumulation has fared in recent years. We compare the average pace of reserve accumulation from 2010 - 2014 to that since t.