More on king dollar and EM (and shale producer) vulnerability
Last week the Fed admitted to having mistakenly made public forecasts by staff economists which suggested that the Fed is indeed on a 2015 rate hike path. As a result, policy divergence is now set to widen, with the result being a bid for the US dollar and a decline in commodities priced in US dollars. Coupled with the ongoing slowdown in China, this is bad news for shale oil producers and emerging markets. My analysis follows below.