gone absolutely insane... anyways could it be a cause of short emerging markets, long developed markets?
Dont know enough about this but my reasoning is that, interest rates in Turkey and SA are getting hiked, and rates staying low in US and EU. Wouldnt the $ and Euro increase in value, causing further weaking in the ZAR as well?
sorry Im not following completely, are you referring to bond yields?
[just taking the currency issue to the side for the moment] from my understanding money is still loose in developed markets, so earnings there should be good (in theory), exactly the opposite scenario with us (with G.Marcus stating theres no ways int rates are coming down here).
Lower yields in DM lead to the continued search for higher yields in DM. So the liquidity flows should in theory still be supportive of higher yielding EM currencies. This could be offset by the FED tightening sooner.
I understand your confusion, not bond yields, I use yields as a synonym for return on your money. Now put SA economy to one side. Now that interest rates are negative, banks in the EU can pay to store their money relatively risk free with the ECB, or they can put their money in SA where our interest rate is much higher. There is a bit more risk but also more reward. The cut in rate makes putting money in SA more appealing so more money flows in here and our currency strengthens