Emerging Markets Sell-off Continues

by Marilou Long on August 20, 2013

in currencies,equity market,Foreign Markets,interest rates

Indonesia is down 3.5% today and Thailand is down 2.0%.  U.S. Treasury yields are slightly lower as money is flowing back to the U.S. and other developed countries.  From the linked CNBC article:

With the U.S. dollar at two-month lows, emerging market currencies like the Indian rupee, the Thai baht and the Indonesian rupiah are under pressure as money leaves the emerging market area. The Indonesian market is down almost 11 percent in the last four days.

“What we are seeing across the emerging markets is a recalibration of investor’s expectations that were seemingly too optimistic during the second half of 2012 and first part of 2013.” Adrian Miller of GMP Global says.

He may be on to something. Take a look at the performance of key emerging market stock benchmarks since the beginning of May:

Indonesia -17.3%

Thailand -14.2%

Philippines -7.7%

China -4.8%

South Korea -3.9%

This Bloomberg article has more detail about the problems in emerging markets.

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