Emerging Market Sovereign Spreads, Global Financial Conditions and U.S. Macroeconomic News

This paper investigates the impact of global financial conditions, US macroeconomic news and domestic macroeconomic fundamentals on the evolution of EMBI spreads for a panel of 18 emerging market (EM) countries using daily data. To this end, we employ not only the conventional panel data estimation procedures but also the recently developed common correlated effects panel mean group method which incorporates heterogeneity by allowing country-specific coefficients whilst accounting for the effects of common global shocks such as contagion. The results strongly suggest that the long-run evolution of EMBI spreads depends on external factors such as changes in global liquidity conditions, risk appetite and crises contagion. Domestic macroeconomic fundamentals proxied by sovereign country ratings are also found to be important in explaining the spreads. The results from panel equilibrium correction models suggest that EMBI spreads respond substantially also to US macroeconomic news and changes in the Federal Reserve’s target interest rates. The magnitude and the sign of the effect of US macroeconomic news, however, crucially depend on the state of the US economy, such as the presence of an inflation dominance.Bond spreads, Emerging markets, Macroeconomic news

The Determinants of Sovereign Spreads in Emerging Markets

This study analyzes both short-run and long-run determinants of the sovereign spreads in a set of 21 emerging countries over the period 1998-2004 utilizing both daily and monthly data and estimate individual country and panel regressions. Our analysis shows that both domestic and international factors affect spreads, where the most important common determinant of the spreads is found to be the risk appetite of foreign investors. By using an event study methodology we find no evidence of impact of the FOMC announcements on spreads. Finally, we analyze whether news regarding domestic politics and announcements of international organizations play a role in the evolution of spreads. Using the postcrisis data of Turkey, we point out an important effect of such news releases.Bond spreads, emerging markets, Fed announcements, political news

Three-Dimensional Magnetic Page Memory

The increasing need to store large amounts of information with an ultra-dense, reliable, low power and low cost memory device is driving aggressive efforts to improve upon current perpendicular magnetic recording technology. However, the difficulties in fabricating small grain recording media while maintaining thermal stability and a high signal-to-noise ratio motivate development of alternative methods, such as the patterning of magnetic nano-islands and utilizing energy-assist for future applications. In addition, both from sensor and memory perspective three-dimensional spintronic devices are highly desirable to overcome the restrictions on the functionality in the planar structures. Here we demonstrate a three-dimensional magnetic-memory (magnetic page memory) based on thermally assisted and stray-field induced transfer of domains in a vertical stack of magnetic nanowires with perpendicular anisotropy. Using spin-torque induced domain shifting in such a device with periodic pinning sites provides additional degrees of freedom by allowing lateral information flow to realize truly three-dimensional integration

Paving the Way for an Economic Crisis with High Leverage and Currency Mismatches: 2018-19 Crisis in Turkey

In the aftermath of the global financial crisis monetary policies in advanced economies caused a surge in cross-border lending to emerging market economies (EMEs). Policymakers of EMEs criticized those policies on the grounds that they pave the way for financial imbalances in EMEs and called for international policy coordination. Up to mid-2018 leverage of banks and foreign currency exposure of nonfinancial corporates increased sharply in Turkey. Under these conditions, a shock that causes a stop in capital flows can trigger crisis in EMEs. The Turkish economy was hit by several external shocks and entered a recession in the third quarter of 2018. This study aims at analyzing the role of financial vulnerabilities and domestic policies in Turkey’s 2018-19 crisis and draw policy lessons. We argue that, notwithstanding complaints regarding lack of international policy coordination, domestic policy mistakes played an important role in paving the way for the crisis