We unveiled our EM FX valuation framework one year ago today, which signaled substantial overvaluations for Argentina and Turkey. Our model says that both currencies have converged to near fair value. But neither is cheap as current account adjustment is mostly cyclical.

The final revised Basel III Market Risk standard was published on January 14th in the new ‘modular’ format. We have arranged for a comparison document/tool which provides a comparison between the standards and an overview of the differences between the text of the 2019 and 2016 market risk rules.

The IIF, our members and other associations developed an industry response to the BCBS consultation paper (CP) on “Leverage ratio treatment of client cleared derivatives.”

The joint associations industry have published a comment letter on the FSB Discussion Paper: “Financial resources to support CCP equity in resolution”.

We assess Venezuela’s macroeconomic fundamentals after years of policy mismanagement and social turmoil. The GDP drop is on par with the Soviet Union’s collapse.

After a burst of strength in 2017-18, momentum in U.S. corporate earnings and sales shows signs of fading; Growing pressure on profitability for global systemically important banks; Despite higher hedging costs, safe-haven demand continues to support foreign buying of U.S. Treasuries; Emerging market central banks load up on gold, looking to build precautionary buffers

The January 2019 Insurance Update provides targeted updates on IIF insurance activities and events, and highlights relevant IIF publications or related regulatory developments in other fields.

We project solid growth and contained inflation this year and next. Main risks to the outlook are linked to external conditions as domestic policies have generally improved. While progress has been made to address longstanding challenges, major structural weaknesses remain.

The Fed is likely to reignite a wall of money to emerging markets, and our high frequency tracking of flows already shows a sharp spike. As the hunt for yield restarts, positioning in EM is a central question. South Africa is most over-, Brazil and Russia most under-positioned.

EM Growth Tracker at 4.1% 3m/3m sa ar in January. Uptick driven by improvement across all major indicators. Trade volumes and industrial production still weakening. EM Asia and Latam rebound, EM Europe & Africa still contracting.

The IIF has submitted the response letter to the Prudential Regulation Authority (PRA) Consultation Paper - Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change.

US imports from China continue to grow despite tariffs. We examine whether this means tariffs are ineffective, creating value, volume, and price series by tariff group.

A soft exit out of the debt overhang is possible and the authorities now recognize the urgency of committing to meaningful and widespread reforms to improve long-term fiscal sustainability and rebuild confidence. However, the scope of credible reforms for 2019 remains unclear.

Portfolio inflows to EMs were $51.1 billion in January, the highest in 12 months. Equity and debt inflows increased to $33 billion and $18 billion, respectively. Net capital flows improved but remained in negative territory in December.

Fed flexibility on balance sheet normalization could have far-reaching consequences; Tech stock valuations suggest fears that trade war is morphing into tech war; A more dovish Fed spells respite for highly indebted EM borrowers; Unprecedented growth in green syndicated lending; Sharply higher debt in vulnerable low-income countries puts sustainable development goals at risk 

Our high frequency trackers show a substantial pick-up in flows, though the underlying picture is weaker than headline numbers suggest. The rebound is concentrated in China, with Mexico and Indonesia also up, while the flow picture to India, South Africa, Turkey and Thailand is weak, even after large outflows during the emerging markets sell-off last year.

The crypto industry moves into the new year reshaped by a tumultuous 2018. Despite ongoing regulatory and technical challenges, the underlying technology and crypto-based applications continue to move slowly towards mainstream adoption, as evidenced by recent private and official sector activity.

Sanctions lowered capital flows to Russia permanently but robust oil exports cushioned their economic impact. Our BoP Nowcast suggests a still manageable situation, despite a falling current account surplus due to lower oil.