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The United States’ first emerging-market president: frontier market implications

Summary:
Short everything — everything — east of the Oder until the Russian border, go long whatever the Russian elite will buy when sanctions end, don’t buy Cemex (too easy) — buy European defence contractors — and get out of the Korean won, Saudi riyal and Philippine peso before those countries start being charged for US protection. What else? Here’s more from Exotix, the brokerage, country by country, with a more frontier market bent: BrazilThe lower rates we expect to see with the dovish monetary policy we expect from a Trump Presidency is marginally positive for the sovereign (given the low sovereign dollar debt to GDP), but will have more of an impact in the corporate sector which has borrowed offshore and will face refinancing. A weaker US dollar can hurt the country’s industrial exports but is positive for Petrobras. Stronger commodities are positive for Brazil’s exports and economic activity. Trump’s win raises the risks of increased trade restrictions, with the US being Brazil’s second-largest export destination. IraqWith Trump in charge, American support for Iraq can potentially weaken. The benefit of higher commodity prices for Iraq is therefore balanced against the risk of weaker support from America – and potentially from its DFI partners as well.

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Short everything — everything — east of the Oder until the Russian border, go long whatever...

Joseph Cotterill
Joseph is the FT’s Southern Africa correspondent based in Johannesburg, after previous stints as private equity correspondent and on the Lex column. But he still writes for Alphaville, which he joined way back in March 2010 — right in the middle of the Greek bailout crisis. He has been very interested in all things credit and sovereign debt ever since…

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