Avoiding financial crises is critical when investing in emerging markets. That’s why we developed the Country Risk Model, a general health check that helps us steer clear of economies with too many imbalances and symptoms of overheating. The model provides valuable trading signals outside full-blown crises too.
After Argentina and Turkey, could Brazil be the next emerging market (EM) that goes into crisis? These events are not linked – each of these countries currently has idiosyncratic weaknesses. In the case of Brazil, the fiscal deficit is in the spotlight, coupled with the presidential elections in October.