Report
Where does international capital flow when things go wrong?
International capital is now flowing to the United States, at the expense of Europe and emerging countries, due to the higher interest rates and the sharp rise in the equity market in the United States. But the situation of the global economy will deteriorate in 2019, which raises the following question: where does international capital flow when things go wrong? During the subprime crisis (2008-2009), capital flowed out of the euro zone, Japan, China and other emerging countries and moved to the United States, even though the crisis started in the United States. During the emerging and euro-zone crisis from 2013 to early 2016, capital flowed out of China and other emerging countries and moved to the United States, the euro zone (except for short-term capital) and Japan. If the world’s economic situation is less good in 2019, and if past mechanisms are repeated , we should expect capital flows to the United States to continue and not a rebalancing of capital flows to other regions , even if growth declines in the United States .
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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