Assessing the EM risks; Governance rewards

Rising dollar yields and a dollar surge, changing investor risk appetite and overloaded position in EM assets have all been cited as reasons behind the recent rise in EM local bond yields and slide in EM currencies, according to Oxford Economics, who have published some excellent work of EM debt markets in the past few weeks. Their analysis has attempted to eliminate the short-term noise, and focus on the real drivers of differentiation across EM markets, with the help of their in-house Sovereign Risk indicators, which rank countries across a range of key variables.  Oxford Economics finds this analysis explains the current sell-off and provides a useful guide as to which markets would be hit the most – and which the least – in the latest bout of EM turbulence. Click below if you’d like to read samples of OE’s work on EM, and look at their broader service.