Global

US debt ceiling debacle puts EM at risk, but resolution remains likely

  • Even without arrears on US debt, uncertainty and other spending cuts could hurt global liquidity and EM growth prospects

  • In downside scenarios, any flight to safety benefit from lower US bond yields to be offset by wider EM risk premia

  • Though our base case is that debt ceiling related volatility will pass, the downsides are worth preparing for

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This report is independent investment research as contemplated by COBS 12.2 of the FCA Handbook and is a research recommendation under COBS 12.4 of the FCA Handbook. Where it is not technically a research recommendation because the subject of the research is not listed on any European exchange, it has nevertheless been treated as a research recommendation to ensure consistent treatment of all Tellimer's research. This report has been produced by the analyst(s) named above (the "Analyst").

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