Nordvig on the Canary in the EM Coal Mine

The video discusses the weakening of emerging market (EM) currencies due to trade tensions and capital outflows. It highlights the impact of the Chinese currency's movement and the role of trade escalation as a catalyst. The analysis includes historical context and the unusual nature of current events. The video also examines bond yield changes and the People's Bank of China's (PBOC) currency fixing, providing insights into market expectations and future currency directions.

What was a significant catalyst for the movement in EM currency contracts?

• The Brexit negotiations

• The increase in U.S. interest rates

• The trade escalation in early August

• The rise in global oil prices

What was the impact of the trade escalation on foreign capital in EM?

• Increased investment in EM equities

• Dramatic selling of EM equities

• Stabilization of EM currencies

• No significant impact

How does the current situation with EM currencies differ from historical events?

• The ECB is implementing quantitative easing

• The U.S. is reducing tariffs

• The Chinese currency is weakening due to U.S. policy

• The EM currencies are strengthening

What was notable about the PBOC's recent fixing?

• It was stronger than expected

• It signaled a desire to accelerate currency movement

• It was weaker than expected

• It indicated a new trade agreement

What range is the Chinese yuan expected to gravitate towards?

• 7.20 to 7.30

• 7.00 to 7.10

• 7.50 to 7.60

• 6.50 to 6.60