Asks which emerging markets suffering most from Iran war jolts.
Vonnie Quinn
Jeffrey Yu
Depends on asset class. Currencies: major oil importers like Japan, Korea at risk due to current account struggles.
Asks if moves could reverse fast with ceasefire.
Vonnie Quinn
Jeffrey Yu
If back to normal, market pricing of ECB hikes would come off. ECB's December assumptions are 'out the window'.
References Olli Rehn's point about demand dampening offsetting energy inflation.
Vonnie Quinn
Jeffrey Yu
Buys the argument for household demand outlook. Key difference from 2022-23: now we have energy shock WITHOUT positive COVID reopening demand shock.
Asks when energy price effects pass to real economy, e.g., staples producers raising prices.
Vonnie Quinn
Jeffrey Yu
From Europe's view, when staples producers raise prices beyond wage growth, real disposable income becomes problematic.
Notes intervention by India, Indonesia, China, Taiwan.
Vonnie Quinn
Jeffrey Yu
APAC currencies were well-owned. Liquidation with hedges could cause disruptive flows; central banks will push back.