Will global market face replay of 1998 financial crisis?

Will global market face replay of 1998 financial crisis?

Global markets are echoing the 1998 financial crisis, Bank of America warns.

Emerging markets are crumbling under a strong dollar while tech stocks advance amid optimism over the U.S. growth trajectory - two ingredients that might be the makings of an annus horribilis like the one seen two decades ago, according to the bank.

"U.S. decoupling, flattening yield curve, collapsing EM - all echoes of 20 years ago," strategists led by Michael Hartnett wrote in a recent note.

Tightening by policy makers in the early 1990s set the stage for the dollar’s ascent of as much as 25% in the three years leading to 1998. "Meanwhile, the yield curve inverted in June that year," Hartnett and team point out.

"At first blush, we’re in a similar tightening cycle today, with the gap between two- and 10-year yields hitting fresh cycle lows," Bloomberg writes.

2120 views


Vestnik Kavkaza

in Instagram

Subscribe



Populars