Fed tapering moving hot money from EM to Europe

Today's commentary
Summary: If you look at the last two posts on this site from Marc Chandler and from Sober Look the connection between Fed tapering and money flows is clear. Hot money is flowing out of emerging markets and into Europe. Below I explain why this is happening and what market warning signs to look for. 

First, let me quote from Marc's post:

The US dollar stands at the fulcrum. Investment flows are leaving emerging markets, with currencies from Brazil, India, Indonesia and Mexico being hit the hardest over the last few sessions. The MSCI Emerging Market Index is off 4.5% over the past five sessions and the rout continues.
Falling commodity prices, country specific challenges, as in India, Indonesia, Brazil, and Turkey, coupled with anticipation that the days of low in...


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