I imagine this is going to go by the wayside amid the Italian turmoil and renewed trade banter between Trump and China, but it's worth noting, so I'll touch on it briefly here.
Over the past several weeks, emerging market monetary authorities have been at pains to shore up confidence in the face of the surging dollar, rising U.S. yields and a Fed that looks determined to stick to its guns on rate hikes.
Yes, 10Y yields in the U.S. fell by the most since Brexit on Tuesday as traders flocked to havens and yes, renewed euro breakup risk has forced a repricing of the Fed, but all of that is a recent phenomenon and the overall backdrop for EM remains challenging.
The recent turbulence in EM has so far prompted a pause on rate cuts from Brazil, triggered the first rate hike since 2014 from Bank Indonesia, prompted multiple dramatic rate hikes from Argentina's central bank and even forced Erdogan to acquiesce to an emergency rate hike to put the brakes on the Turkish lira's collapse (that hike was followed by an important announcement from CBT on the future of monetary policy in Turkey).
Well on Wednesday, Bank Indonesia hiked again at an early policy meeting, proving new Gove
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