Trouble in EM
The Argentine peso was down by more than 5% earlier today before halving its gains. It's still at a long-term low and the market is worried about the political situation as Cristina Fernández de Kirchner attempts a comeback.
But it's not really a domestic story for the Argentine peso today. It's more about the US dollar and the relentless strength along with higher oil prices. The Turkish peso is also down 1.4% today.
Argentina and Turkey are among a group of countries with troublesome current account deficits and higher USD and higher oil raise questions on whether they can continue to finance external borrowing.
For traders who aren't interested in EM, I still suggest keeping a close eye on TRY and ARS right now because if they start to fall in a disorderly manner, it would be an early signal about broader risk aversion.
