Thursday, January 21, 2016

Thursday Isn't Going Too Be Much Better Than Wednesday.......

Thursday Isn't Going Too Be Much Better Than Wednesday

From the close of the US day session, offshore Yuan began to weaken and despite the largest liquidity injection in 3 years in China, the yuan 
has tumbled almost 200 pips from the dead-cat-bounce highs, testing the lows once again. This in turn has weighed on crude and dropped Dow futures 140 points off the after-hours highs...S&P 500 futures are down 10.25 points at 1,844.75.

Stock markets around the world are mixed. China's Shanghai Composite (-3.2%) led the decline in Asia.

We have seen this pattern before... this morning...




It was Black Wednesday for emerging markets, one strategist warned and Thursday is not looking any better.

This year's emerging market turmoil is already worse than in the same period in 1998's Asian financial crisis. The rout in emerging markets could continue for some time, especially as the major global central banks have exhausted their ammunition in recent years, making it unlikely that they will rescue global markets this time around. More than $2 trillion has been wiped out from the value of developing-nation equities this year. The drop has exceeded the 7.9 percent decline in the gauge in the same period in 1998 during the Asian financial crisis and the drop in 2009 amid the global financial crisis.


Emerging market-based corporations are defaulting on their debts at the highest rates since 2004. Roughly $500 billion has flowed out of EM countries in the past year, driving yields up for borrowers around the world.




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