Global developments. Risk aversion triggered by concerns over China’s credit risk, EM currency pressures and some US earnings disappointment weighed on the global equity markets at the end of last week. The S&P500 index closed the week down 2.6%. The VIX index, Wall Street’s ‘fear gauge’, jumped to its highest level since
The S&P500 index is some 3% off its recent record high. Since the equity market low in 2009, US market corrections have been in the order of 5–10%. Last year’s taper correction was 7.5%, so there is scope for corrective activity to continue this week for both EM and DM markets. Risk aversion favours fixed income, especially US Treasuries (the taper low was 2.45% on the
Russia (RTSI -1.3% / -2.3% WoW @1,364, RUB -0.9% / -2.6% WoW @34.46). Russian equities took the largest hit on the week among the major CEEMEA markets, as risk aversion took its toll. Better oil prices, with Brent (+2.2%, USD 109/bbl.) advancing on the week, were of little help.