The United States is facing what is shaping up to be a perfect storm of economic bad news, with higher than normal energy prices and inflation compounded by a spiraling debt crisis and fears of economic turmoil amid high stakes debt limit talks. Meanwhile, BRICS nations are brainstorming a way to de-dollarize the international trade order.
Emerging market investors are slowly but steadily moving away from dollar-denominated debt and assets, instead preferring to park their hard-earned money into local currency bonds, an analysis by fund flow and asset allocation data provider EPFR Global has revealed.
According to the company’s figures, investors pulled out a net $2.65 billion out of primarily dollar-denominated assets between January and April of 2023, but added a net $5.23 billion into local currency bond funds.
Market analysts attribute the switch to attractive yields and falling inflation on local bond markets, and an increasingly unattractive dollar amid uncertainty surrounding interest rate-related volatility. The latter put a major dent in US Treasuries’ attractiveness to investors, and culminated in the collapse of Silicon Valley Bank in March, and panic among investors.
Fidelity International emerging markets debt portfolio manager Paul Greer expects the trend of weakened demand for dollar-denominated debt and assets to continue for the rest of the year. ABP Invest chief investment officer Thanos Papasavvas says there has been a “clear divergence between emerging market local and hard currency bonds [typically dollars and other major Western currencies, ed.] over the past few quarters with local currency debt looking more attractive on a fundamental and valuation basis.”
The trend of a cautious move away from the dollar, which continues to hold the coveted status of the world’s de facto reserve currency in trade, comes amid the growing risk of the US defaulting on its massive $31.8 trillion debt amid bickering between the White House and Republicans in Congress on federal spending and the debt limit.....More Below
My (Rasheed's) thoughts: instead of condemnations, show your outrage by striking back harder than they struck!
The civilian facility in Lebanon operated by a local partner was attacked without provocation, a Russian agency has said.
Moscow has accused Israel of an “unprovoked act of aggression” after Israeli forces struck a Russian cultural center in Lebanon.
The attack on the facility in the southern city of Nabatieh was reported on Sunday by its director, Asaad Diya, who said the building was empty at the time. Rossotrudnichestvo, Russia’s international humanitarian cooperation agency, which has an official office in Beirut, said its staff remain in contact with Lebanese partners and are actively providing relief to civilians affected by the hostilities.
Israel renewed airstrikes and ground operations in Lebanon earlier this month, targeting the militant movement Hezbollah, after joining the US in a regime-change war against Iran.
Rossotrudnichestvo stressed that the ...
