Risk Management 02 (Aug 15 - Dec 25)

[winston]

Preventing trade shocks from igniting the next financial crisis

Preparedness, not prediction, is the watchword

by Udaibir Das

Over 55% of cross-border bank lending to emerging markets and developing economies is still in US dollars, leaving trade finance exceptionally vulnerable to exchange rate volatility and sudden dollar liquidity crunches.

The trade finance gap in sub-Saharan Africa alone now exceeds US$100 billion – a 30 per cent increase since 2019.

Source: Business Times

https://www.businesstimes.com.sg/opinio ... ial-crisis

[winston]

Ray Dalio warns Americans the current chaos is much bigger than tariffs - 2 simple ways to protect yourself

by Jing Pan

We are seeing a classic breakdown of the major monetary, political, and geopolitical orders:-
1. The global monetary order
2. The political order
3. The global power structure
4. Nature and
5. Technology

Source: Moneywise

https://finance.yahoo.com/news/ray-dali ... 00587.html

[winston]

Keep exposure to risk assets modest as structural shift in US policy plays out

In view of the macroeconomic environment, analysts have begun to lower corporate earnings forecasts for major stock markets

by Mark Richards

What is the US’ real goal?

Look for opportunities to enter the market when the market is extremely pessimistic.

Preferred areas at present are US financial stocks and some Chinese stocks which are in sectors supported by government policies.

Since physical assets such as gold are not easily confiscated or interfered with by other governments, many central banks are also increasing their holdings.

In addition to gold, we are also optimistic about the outlook for copper prices. Under the trend of deglobalisation, countries are committed to reducing their dependence on external supply chains. Infrastructure demand is expected to increase significantly, which helps the outlook for copper prices.

The outlook for commodity currencies such as the Australian dollar, New Zealand dollar and Brazilian real is also relatively attractive; and these countries are relatively less affected by the trade war.

Source: Business Times

https://www.businesstimes.com.sg/wealth ... -plays-out