My Daily Column – Confusion in Emerging Countries

There is confusion currently on markets and mainly on emerging markets. This implies sometime strong and brutal adjustments.
Last night, such an adjustment has been seen in Russia when the central bank of Russia has increased its main interest rate from 10.5% to 17%. It was a response to the deep and dramatic drop of the ruble.
On a more general ground, we’ve seen strong movements on emerging debts and emerging exchange rates. Equity markets volatility was not restricted to emerging countries. On all these issues, the oil price issue is major. On the equity market in developed countries, short-term uncertainty hides the positive story associated with lower oil price: lower investment in the oil sector today but more consumption in the future and more investment in other sectors. Continue reading