Asset Allocation for October 2018

Emerging markets crises deepens as IMF approved the record financial help ever of $57 bn to Argentina and inflation in Turkey reached 25%.

In September EM currencies overpassed the US dollar on IMF’s support to Argentina, rumors about the American pastor release from Turkish jail and extension of the US sanction against Russia implementation. Oil prices hike supported sinking currencies as well.

Energy prices reached 4-year maximums on the US intentions to lay Iranian oil export under an embargo. High demand on oil hasn’t been stopped even on the facts that Saudi Arabia and Russia extended the “black gold” output to record levels as well as Libya and the USA both intensified oil export capacity.

The trade war between the US and China switched to standby mode. The parties do not want to exacerbate the situation either they want to start negotiations. We might observe the hidden political and economic decisions of the conflict between the USA and China in the nearest months including the activity on commodity and debt markets.

Threat and challenges in world markets:

  • The trade war between the US and China with EU
  • Monetary policy tightening by the US FED
  • Oil prices rapid growth
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