War in Ukraine could spark an emerging markets crisis
Happy Wednesday, readers.?The World Bank has issued a stark warning about a global debt crisis that the Russia-Ukraine war could be catalyzing. Today we break it down, then we'll dive into what's going on in the labor market.
Let's get into it.
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1. A global debt default might be looming.?And developing nations are set to bear the brunt of the impact. On Tuesday, a World Bank economist said Russia's war on Ukraine could spark?the worst debt crisis for developing nations in a generation.
"The Ukraine war immediately darkened the outlook for many developing countries that are major commodity importers or highly dependent on tourism or remittances," wrote Marcello Estevao, the World Bank's global director for macroeconomics, trade, and investment.?
The poorest nations have increasingly taken greater amounts of variable-rate debt, which increases their vulnerability to rate hikes.?
Previously, the pandemic had already rattled some economies and raised their?total indebtedness?to a 50-year high, Estevao wrote, and war has only exacerbated issues for these countries.
Rising interest rates will boost risks further, driven by the hawkishness of global central banks looking to bring inflation back down to earth.?
Still, things could change if the Ukraine war abates. Global markets have been encouraged by?peace talks, and the value of the?Russian ruble has recovered to near pre-war levels. Meanwhile,?oil prices have turned lower?with supply concerns easing.
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In other news:
2. Equities are heading lower this morning.?Skepticism is growing over Russia's signal that it will withdraw its troops from around Kyiv, which is weighing on risk appetite.?Take a look at what's going on here.
3. A strategist at $669 billion Federated Hermes shared seven reasons why the US isn't headed for a 1970s-style stagflation crisis.?Linda Duessel isn't banking on stagflation even though the risk for it is rising.?She detailed 12 investments to make as stocks crush bonds during the economic expansion.
4. Bank of America named seven financial stocks that are best-positioned to outperform amid high inflation and rising interest rates.?These domestically-focused bank stocks have promising outlooks for profit margins in the current landscape.?See the full list here.
5.?New jobs data shows the historic labor shortage continues.?The US boasted 11.3 million job openings last month, according to government data published Tuesday.?That number's barely changed since January.?
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2 年What about
Consultant @Capgemini | Merging Business Insights with Data-driven Strategies
2 年Saddening to read that it is the developing nations that are the ones who would take the brunt of the effect, as they are dependent and intertwined in a way such as being major commodity importers or highly dependent on tourism or remittances, which in turn makes them more vulnerable than industrialized nations.
Aeronáutica, asesoría
2 年Thank you for sharing. low interest at all seems the real risk.
THE UNIVERSE ... Time in the universe does not flow is a dimension in which the universe can grow, a concept that is consistent with current understanding of physics
2 年... I am not an expert but if the whole world did decide for years to use one supplir (read russia) ... the whole world did make a huge mistake ... no one no just one private company in the world join its life with one supplier ... I do not know who was responsible but must be sacked ... not matter if is one one thousand or one million people ... 8 billion people have right to have politician that work hard to keep everyone safe ...