In the on-going saga of Trump’s trade war with China, emerging markets are getting the short end of the stick.
Emerging markets (EM) net capital flows reached negative $35.8 billion in June, according to data from the Institute of International Finance. To boot, investors had already pulled some net $19 billion out of EM as of the month before.
Despite a dovish Fed (which cut rates 25 basis points on Wednesday), President Trump’s latest tariff tweet sent markets into a tailspin, sending the Dow 280.85 points lower on Thursday. And on fears of a prolonged trade war, emerging markets are feeling the heat.
