The Commodity Bust: Not The Obvious Winners & Losers (by Udith Sikand, GaveKal Capital) - The huge moves in oil over the last four trading sessions together...

The Commodity Bust: Not The Obvious Winners & Losers (by Udith Sikand, GaveKal Capital) - The huge moves in oil over the last four trading sessions together with the ongoing cratering of prices across the commodity complex have added to deflationary pressures weighing on developed and developing economies alike. But the greatest pressures are inevitably being seen in emerging markets as they tend to be (i) the biggest commodity exporters, and (ii) are more likely to subsidize fuels (developed economies prefer to tax most fuels like crazy). The still unfolding commodity shock has forced exporters such as Brazil, Russia and Indonesia to raise interest rates, while China and South Korea have been given more room to cut benchmark rates. As such, everyone's favorite new emerging market framework has in one corner the big net-importers of commodities (mostly in Asia) and in the other a battered bunch of exporters which face a harsh terms-of-trade shock that is hurting their balance of payments, business investment and employment outlook. More: (VIEW LINK)