In This Week’s Issue…

by Alexander Kalis | Managing Partner & Head of Investments at Milltrust International 

Submerging Markets, US-China Trade Compromise?, China ESG Opportunity, & India Hikes Rates.

Submerging Markets

The bad times continue for emerging-market currencies, with today’s biggest loser being South Africa’s rand which dropped as much as 2.4 percent, breaching 13 to the dollar for the first time since December as investors bet weak growth will not allow the country’s central bank to follow EM peers in hiking rates. In Brazil, the real saw more declines yesterday with the selloff increasing pressure on policy makers to do more to support the currency. The widespread truckers’ strike in Brazil, which ended after the government made concessions to the unions, has cost the country billions of reais and damaged the administration’s reputation. There was some good news for Argentina, which secured a $50 billion stand-by arrangement from the International Monetary Fund to help restore investor confidence.

Half-Way

China has said it is willing to boost imports if the U.S. meets it half-way on trade. The country had previously warned that should Trump impose import tariffs on June 15, it would withdraw all commitments to increase purchases of American goods. Gao Feng, a spokesman for China’s Ministry of Commerce, said that Beijing doesn’t want to escalate trade tensions with the White House.

China A-shares inclusion set to light ESG fuse

The opening of the China A-shares market to foreign investors provides a window for China-focused funds to push ESG criteria into greater prominence in the world’s second largest economy.

India hikes rates for first time in 4 years

India’s central bank raised interest rates for the first time in over four years on Wednesday, highlighting concerns over rising inflation.

Retail inflation in India recently touched 4.58 per cent, above the target set by the RBI’s monetary policy committee (MPC). It is being stoked by rising oil prices and increased consumer spending as India’s economy turns a corner following a number of disruptive measures. A predicted normal monsoon is also expected to sustain the Indian economy’s growth – for which agriculture is a cornerstone – over coming months.

Key charts you should look at

Click here to read.

Click here to subscribe.