Analysts at ANZ point out that the US economy has been growing solidly for some time and although the domestic fundamentals are firm, external risks are rising – growing trade tensions are one and the recent events in Turkey highlight another.
Key Quotes
“Although the risks of contagion from events in Turkey look low for now, the event underscores a potential risk from the emerging market (EM) complex in coming years.”
“Although most EM economies are in better shape than in previous periods of stress, the sizable increase in debt in recent years has left many sensitive to changes in earnings and interest rates.”
“With US rates still heading higher and Chinese growth grinding lower, some EM economies could be vulnerable. The Fed will need to be mindful of how this plays out.”
Share
