Economy

This article is an on-site version of our Chris Giles on Central Banks newsletter. Premium subscribers can sign up here to get the newsletter delivered every Tuesday. Standard subscribers can upgrade to Premium here, or explore all FT newslettersEuropean Central Bank President Christine Lagarde is drawing inspiration from the French poet Paul Valéry. “The trouble with our times is that the future is not what it used to be,” she said at the annual conference in Frankfurt for the ECB and its watchers. The “exceptionally high” uncertainty unleashed by US President Donald Trump would prevent the central bank achieving its 2 per cent inflation mandate in the short term, she said. But it would set monetary policy to ensure inflation was “always converging back towards 2 per cent over the medium term”. Agility and clarity were her watchwords. What she and others did last Wednesday, however, was a Swot analysis of Eurozone economic management, identifying strengths, weakness, opportunities and threats.Most agreed on the Eurozone’s strengths. It is a large economy with sensible economic management and broadly succeeded in returning inflation to target after the 2021-22 shocks. Unlike the US Federal Reserve, the ECB faces no threats to its independence and does not have to deal with what Professor Klaus Adam of University College London described as “lunatic” domestic policy ideas, such as creating a strategic reserve of cryptocurrencies when the dollar is already a reserve currency. The Eurozone’s weaknesses are also well known. There is still a tendency to think of the bloc as a loose amalgamation of 20 individual economies with their own structural economic deficiencies undermining growth and prosperity. There is also an open question as to what extent the ECB failed to address the inflation issue promptly in 2021-22. ECB chief economist Philip Lane was pessimistic that the dismal science would be able to answer this question in 100 years. This left the opportunities and threats to be the main focus of attention both in the main hall and in the corridors of the conference. Three dominated discussions.Trade barriersWith 25 per cent steel and aluminium tariffs having been imposed by the US on the day of the conference, no one thought the EU would escape further trade restrictions coming from the Trump administration. April 2 is the next date to watch, when the US promises to impose “reciprocal” tariffs. If truly reciprocal, these would include a reduction in US tariffs on SUVs from the EU from 25 per cent to 10 per cent. No, I am not holding my breath. In the US, the tariff announcements have spooked households, as shown in the latest inflation expectations published by the University of Michigan last Friday. There is not much comfort yet to be had from the New York Fed’s less timely data and this will worry Federal Reserve officials when they meet this week. Some content could not load. Check your internet connection or browser settings.Compared with the US, where tariffs will create at least a one-off rise in US prices, the European picture is more ambiguous. Inflationary effects will stem from EU retaliation and the supply shock of trade fragmentation. Disinflationary pressures will be fostered by lower US demand for EU exports, a large rise in uncertainty and lower Chinese import prices if it redirects goods to Europe. François Villeroy de Galhau, governor of the Banque de France, said the new world was one of uncertainty, unpredictability and irrationality. “We are aware [the] environment can change tweet by tweet from one day to the next.” The implication for the ECB is unpleasant. Because it cannot act ahead of Trump’s latest wheeze, however agile the central bank is, it will be behind the curve. European security and public spendingGermany’s Green party has now joined the Christian Democrats and Social Democrats in a bid to revolutionise the country’s fiscal straitjacket, with the nation’s Federal Constitutional Court rejecting initial attempts to block the move. If successful, the country’s fiscal policy will shift from limiting public investment and defence spending through the debt brake to providing a huge boost, although the scale and timing of the additional spending is still uncertain. The market reaction has been clear. As the chart shows, German government borrowing costs in nominal and real terms have jumped, with inflation expectations rising too, providing the ECB with a clear incentive to persuade financial markets it has a grip on inflation. Some content could not load. Check your internet connection or browser settings.Once the money flows, the most important public policy question is how much additional security is bought per euro spent. For the ECB, the questions are simpler. It needs to assess the inflationary consequences of additional public spending, which depend on the levels of slack in the economy, the speed of purchases and whether they are directed to foreign or domestic suppliers. That is for the future. So far, the results have created a disinflationary problem for the ECB. It is now dealing with tighter financial conditions without any fiscal spending and companies cannot be expected to invest in production lines until they are sure government contracts will flow. The upshot is that the monetary policy should wait until the new defence strategy emerges. This will also force the ECB behind the curve. With the inflationary consequences again uncertain, Professor Refet Gürkaynak of Bilkent University said the ECB should examine what was the worst possible way Europe’s new security strategy could evolve. I wasn’t going to let him say that without specifying his view. So I asked him. His answer was good and depressingly plausible.Fiscal policy in Europe turns into tariff policy in the US. There is continuous talking about it. ‘We’re going to do this; we’re going to do that; we are going to do it tomorrow; we decided not to do it today but the month after.’ Whatever. But nothing actually is being done, so that you get all of the uncertainty of fiscal policy and none of the defence benefits or the spending benefits. The euro as the world’s reserve currencyAcademics and policymakers alike said the best opportunity for Europe was the possibility that the euro could become the world’s most important international reserve currency. While Wall Street fantasists imagine a Mar-a-Lago Accord, depreciating the dollar, funding the US government for nothing and other countries accepting some vague promises on security, the reality is that Europe is more interested in promoting itself as a safe haven, distantly removed from crazy Americans. On hearing talk of the euro as a reserve currency, French central bank governor Villeroy de Galhau said the ECB needed to accelerate plans for its central bank digital currency at both retail and wholesale levels to make the offer more concrete. “I really believe that they are much more relevant after the executive order of January 23,” he said.Before we got carried away heading to the airport singing “Ode to Joy”, the limits of European integration and harmony were on display at a later session of the conference. Professor Athanasios Orphanides, of MIT and a former Bank of Cyprus governor, highlighted the “crazy framework” of the ECB which undermines investor confidence that it stands as a backstop to Eurozone governments. This results in France, Italy and Spain, for example, paying much higher premiums to cover default and liquidity risks than the US, Japan, the UK and Canada even though their fiscal positions are no worse. Orphanides’ chart below is compelling. Some content could not load. Check your internet connection or browser settings.This chart should be sufficient to temper any enthusiasm you might have been feeling about the euro becoming the international reserve currency. Its case for Europe was not helped when Joachim Nagel, the Bundesbank president, shot Orphanides down, saying these were political questions and the ECB was not operating in a fiscal or political union. This left me thinking that the US might well trash the dollar’s reserve currency status without the euro necessarily benefiting. What I’ve been reading and watchingThe FT’s guide to Trump’s economic team is a must-read. Something useful to bookmarkHow inflation is changing Japan in many ways from vegetable boycotts to thrifty consumersAs the Fed examines the US economy, it cannot have failed to notice the sour mood of US consumers. It is notable, however, that this is nearly all coming from DemocratsAs far as the UK is concerned, this week’s Bank of England Monetary Policy Committee meeting is likely to be significant. More important are the big issues facing the government, concisely laid out by Martin WolfA chart that mattersIf there is one thing that Donald Trump has managed to achieve, it is to make people nervous. This might impede the long-term performance of the US economy, requiring higher interest rates. Financial markets have taken the view over the past month, however, that it will just make households and companies spend less, raising the likelihood of Fed rate cuts to give them a nudge. The Fed’s summary of economic projections on Wednesday will allow us to see to what extent officials concur. Some content could not load. Check your internet connection or browser settings.Recommended newsletters for you Free Lunch — Your guide to the global economic policy debate. Sign up hereThe Lex Newsletter — Lex, our investment column, breaks down the week’s key themes, with analysis by award-winning writers. Sign up here More

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereGood morning and welcome back to your morning briefing. Here’s what’s we’re covering today: Gaza ceasefire breaks downEconomists warn of US slowdownShort sellers make profits on Tesla ‘One of the most important cases in American history’A two-month ceasefire between Hamas and Israel has collapsed after Israeli Prime Minister Benjamin Netanyahu authorised “extensive strikes” against the militant group in the Gaza strip and promised to expand the military operation. Health authorities in the Hamas-controlled enclave said at least 326 people were killed this morning and another 440 injured in the air strikes. Netanyahu’s office said the strikes were launched in response to the Palestinian militant group’s “repeated refusal to release our hostages” and its rejection of mediators’ proposals in talks to prolong the ceasefire.Israel’s military urged Gaza residents in the cities of Gaza City and Khan Younis to evacuate shelters close to the border. The new offensive is the most intense military action since the ceasefire was agreed in January. Israel’s campaign against Hamas has killed more than 48,000 people in Gaza, according to Palestinian officials. It was a response to Hamas’s October 7 2023 attack on Israel which killed 1,200 people and saw another 250 taken hostage.The first stage of the ceasefire between Israel and Hamas — which involved the return of more than 30 Israeli hostages in Gaza in exchange for Israel’s release of about 1,500 Palestinian prisoners — ended on March 1. There are still believed to be 59 Israeli hostages in captivity, less than half of them are thought to be alive. Read more on the latest developments in Gaza.Here’s what else we’re keeping tabs on today:Trump-Putin call: Ahead of talks with his US counterpart today, Russia’s president allowed a group of western investors to offload Russian securities left in limbo by Moscow’s invasion of Ukraine.UK-US trade: Britain’s trade secretary, Jonathan Reynolds, will hold talks in Washington in a bid to win an exemption from Washington’s tariffs.German debt brake: Incoming chancellor Friedrich Merz has expressed “confidence” about today’s make-or-break vote in parliament over his plans to unlock up to €1tn.Chips: Nvidia chief Jensen Huang will address the company’s AI conference in San Jose California, while Lip-Bu Tan takes the helm as Intel’s chief executive.Back to Earth: US astronauts Butch Wilmore and Suni Williams are expected to return to earth after being stranded on the International Space Station for nine months.Five more top stories1. Donald Trump’s sweeping tariffs and rush to downsize the federal government will slow US economic growth and accelerate inflation, leading academic economists have warned in a survey by the Financial Times. Economists also flagged up concerns about the quality of the country’s economic statistics in the FT-Chicago Booth poll.2. Hedge fund short sellers have made $16.2bn betting against Tesla’s shares as the value of Elon Musk’s electric car company has halved over the past three months. JPMorgan last week lowered its end-of-year target price for Tesla from $135 to $120, while one hedge fund manager said: “[Musk] is on the wrong side of his buyership. It’s not people with cowboy boots who buy Teslas.”3. Indonesia’s main stock index fell as much as 7 per cent, to its lowest level since 2021, as concerns mount over weakening consumer spending in south-east Asia’s largest economy and President Prabowo Subianto’s costly spending plans. The Jakarta Composite index is down 14.2 per cent this year and the rupiah has fallen 2 per cent against the dollar. Read more on Indonesia’s struggling economy. 4. Science institutions in Europe and beyond are racing to hire researchers from the US looking to flee the Donald Trump administration’s crackdown on research agencies. Cambridge university is among a clutch of top research institutions seeking to entice experts in fields from biomedicine to artificial intelligence. 5. Google parent Alphabet is in talks to buy cyber security start-up Wiz for about $30bn, setting the stage for the biggest acquisition in the search group’s history, according to people familiar with the matter. Founded by alumni of Israel’s elite cyber intelligence unit in 2020 and now based in the US, Wiz provides cyber security services for the cloud. Read more on what would be one of the biggest deals of the year.Today’s big readThe courthouse in Mandan, a prairie town of less than 25,000 in North Dakota’s oil country, is hearing a case that has become one of the first judicial showdowns over free speech and protest in the second term of Donald Trump. On trial is the environmental campaign organisation Greenpeace, which is being sued over its role in the Dakota Access pipeline protests by the company that developed the project. “This is one of the most important cases in American history,” said a renowned civil rights lawyer.We’re also reading . . . US politics: For now, Trump can do what he wants. The problem is that what he wants is likely to be very damaging to America, writes Gideon Rachman.European defence: France’s president has opened the debate over using country’s atomic arsenal as a deterrent against Russia if US scales back its presence.AI ‘brain’: Microsoft has joined forces with a Swiss start-up to deploy a new model that can learn from real-world experiences by simulating mammal brains’ reasoning powers.Consumer psychology: Sarah O’Connor’s gratitude at finally finding a printer that works tells us something about capitalism, she writes.Chart of the dayThe pound climbed above $1.30 today for the first time since early November, as persistent UK inflation combines with a broad weakening in the dollar to lift sterling. The UK currency has climbed 3 per cent this month against its US counterpart amid worries among investors that President Donald Trump’s stop-start trade war is harming the US economy.Take a break from the news . . . A growing number of companies are offering affordable imitations of luxury fragrances known as dupes (or, as the companies who make them call them, “inspired-by perfumes”), taking advantage of a social media-fuelled craze and the accessibility of ecommerce. Annachiara Biondi tested some. Recommended newsletters for youOne Must-Read — Remarkable journalism you won’t want to miss. Sign up hereNewswrap — Our business and economics round-up. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what the 2024 US election means for Washington and the worldCostco is pressuring suppliers in mainland China to cut prices in response to US tariffs, adding to the risk of scrutiny from Beijing as political tensions mount over an escalating trade war.The US warehouse retailer, which relies heavily on imports from China, requested the price cuts, according to two suppliers. Walmart and other top retailers have made similar requests, they and other exporters said.“The big ones, they have the muscle to do it,” one supplier said. “What do you do if you’re us? You’re screwed or you’re screwed.”President Donald Trump’s administration imposed an additional tariff of 10 per cent on Chinese goods in February 2024, which was subsequently raised to 20 per cent this month, pressuring US companies to try to minimise the impact on their bottom line.The fallout is increasingly sensitive in mainland China, where many suppliers have weathered years of tariffs, operate on thin margins and are bracing for the prospect of more levies.Walmart last week was summoned by China’s Ministry of Commerce to discuss reports of the retailer’s requests. As well as relying heavily on imports from China, the company has expanded in the mainland under its popular Sam’s Club membership model, with a presence in more than 100 cities.Costco has since 2019 opened seven warehouses on the mainland. “They will be very careful,” the supplier said, in light of the Walmart meeting.Costco declined to comment.Walmart said it sourced products from 70 countries globally, helping to “spur job creation, promote supplier development and fuel local economies”.He Yongqian, a spokesperson for China’s Ministry of Commerce, said in a press conference last week that the Walmart discussions were prompted by media reports as well as “feedback from companies”, and that Walmart “explained the situation”. One person familiar with the conversation said it was not a “dressing down”.But the state media response reflected an environment increasingly framed by national lines. “China should not bear the blame for US tariffs,” said Yuyuantantian, affiliated with state broadcaster CCTV in a social media post. The post used the image of a finger pointing through a broken saucepan, a word that means “scapegoat” in Chinese.China has also shown a growing willingness to act against US companies with local operations in response to US trade measures. It added PVH, the owner of Calvin Klein and Tommy Hilfiger, to a blacklist earlier this year.An import-export specialist in China said there was “always pressure to reduce product cost”, but there were questions over whether demands were reasonable and concerns that they could lead to lower manufacturing standards.As well as requesting price cuts, large US retailers have also sought to diversify away from China to de-risk their businesses, especially after Russia’s 2022 full-scale invasion of Ukraine prompted fears over a further deterioration in geopolitical ties and the breakdown of supply chains. Discount retailer Target said the company had reduced production of its own brands in China from roughly 60 per cent in 2017 to 30 per cent today, and that it would reach 25 per cent by the end of next year, “four years ahead of schedule”. “While half of what we sell is made in America, our scale, multi-category portfolio and investments across our supply chain will help us navigate tariff pressures as we have before,” the company said.In its report for the quarter ended February 16, published last week, Costco said tariffs “affect the costs of some of our merchandise”, pointing to “government actions” relating to China, Canada, Mexico and the US.“Higher tariffs are more likely to adversely impact rather than improve our results,” the company said.Additional reporting by Wang Xueqiao in Shanghai More

Claudia Sheinbaum strode out of the towering doors of the national palace to salute an all-female military guard before addressing a crowd of hundreds of thousands in the capital.As Mexico’s president thundered through a speech celebrating the pause of blanket 25 per cent tariffs on its exports to the US, her supporters cried: “You are not alone!”The gathering this month was one sign of how Sheinbaum has turned the external threat of US President Donald Trump into a domestic boon. Amid fears of tariffs, border shutdowns and even US military action in Mexico, she has rallied the nation around her government in a swirl of nationalism, pushing her approval ratings above 80 per cent.“We’re here to congratulate ourselves, because in the relationship with the United States, with its government, dialogue and respect prevailed,” she told the crowd. “We are neighbours, we have the responsibility to collaborate and co-ordinate, but we must be clear . . . the country comes first.”While threatening and criticising Mexico, Trump has been unusually respectful of Sheinbaum, calling her a “wonderful woman” and thanking her for her “hard work and co-operation”.That has formed a stark contrast with his treatment of Canada’s leaders, who have been more confrontational and made threats of counter-tariffs. Trump has threatened to annex the country and referred to former prime minister Justin Trudeau as “governor”.When asked recently whether Mexico would suffer the same doubling of steel and aluminium tariffs with which Trump threatened Canada, Sheinbaum responded: “No, we’re respectful.”The leftwing leader has avoided direct criticism of Trump and is playing for time before announcing any retaliation against his tariffs, while pushing back on less central issues such as his attempt to rename the Gulf of Mexico. Although the approach is yet to earn a meaningful long-term concession from Trump, it has won her admiration at home and abroad. Domestic critics and some business leaders have softened, even as they worry about her broader moves to reassert state influence over the economy and overhaul independent institutions, including the judiciary.“It strengthens her and gives her the image of someone with a strong personality,” said Francisco Abundis, founder of Mexican pollster Parametria. “There are actions that even the opposition has applauded.”Claudia Sheinbaum has sent 10,000 national guard soldiers to the northern border More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Indonesia’s main stock index fell nearly 4 per cent on Tuesday as concerns mounted over weakening consumer spending in south-east Asia’s largest economy and President Prabowo Subianto’s costly spending plans.The Jakarta Composite index dropped as much as 7.1 per cent to hit its lowest level since 2021, triggering a brief trading halt. The market closed down 3.8 per cent after paring some losses.The index has fallen 14.8 per cent in the past year and is among the worst performers globally. The rupiah has also dropped about 2 per cent against the dollar this year. Investors have been spooked by slowing consumption in Indonesia, where purchasing power and consumer confidence have been declining in recent months.The latest consumer price data showed year-on-year deflation in February, the first such reading in 25 years. Consumer confidence also dropped in February for a second consecutive month.Indonesia’s middle class has been under pressure from a lack of adequate formal employment and a decline in the manufacturing sector.In January, Bank Indonesia unexpectedly cut interest rates to boost growth despite the weakening rupiah. It also lowered its full-year economic growth forecast to a range of 4.7-5.5 per cent from a previous estimate of 4.8-5.6 per cent.The central bank is holding a monetary policy meeting this week and is due to announce its interest rate decision on Wednesday.“Indonesia’s recent deflation print is raising concerns that the once-strong consumption growth story may be losing steam,” said Mohit Mirpuri, a senior partner at asset manager SGMC Capital. Tuesday’s market slump could be from traders unwinding positions or forced to sell off stocks, he said, adding that a rate cut by the central bank could boost sentiment. Fiscal woes have added to the economic concerns. Since coming to power in October, Prabowo has launched a nationwide free meals programme for schoolchildren and pregnant women, a policy that is expected to cost $28bn a year.The plan has placed a strain on already stretched finances and prompted widespread austerity measures, hitting sectors including infrastructure. State revenue for the first two months of the year fell by a fifth from the previous year, raising more questions about how Prabowo will fund his programmes.Local media have suggested that finance minister Sri Mulyani Indrawati — who has served in the position for nearly nine years — may soon step down, which has unnerved investors. The government has denied the reports.“While the government’s rollout of social assistance may cushion purchasing power, the consumption recovery is envisioned to be weaker than previously expected,” Brian Lee, a Maybank economist, said in a research note on Tuesday.“Rising economic uncertainty and job worries ensuing from Chinese competition are weighing on spending appetite,” he said.Maybank lowered Indonesia’s 2025 growth forecast to 5 per cent from 5.2 per cent and said it expected the central bank to cut interest rates by 25 basis points this week.As resource-rich Indonesia has focused on the commodities sector, manufacturing as a contributor to GDP has dropped steadily over the past two decades, and in recent months several factories have been hit by a flood of cheap goods from China.Sritex, one of Indonesia’s biggest textile companies, closed operations this month and laid off more than 10,000 employees after declaring bankruptcy.Additional reporting by William Sandlund in Hong Kong More

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Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Foreign investors have flocked to Nigeria’s markets in recent months, as the threat of a US trade war with larger developing economies has sent portfolio managers looking for cover in former crisis-hit frontier markets now on the rebound.The Nigerian naira is among the world’s top-performing currencies since November’s US election with a rise of more than 7 per cent against the dollar, as a turnaround in the continent’s most populous nation — and the lure of yields of 20 per cent to 25 per cent — trigger a rally in the local bond market following a massive devaluation.The rally in Nigerian assets reflects how “idiosyncratic” trades, or specific bets on countries coming out of currency crises or defaults, are in favour as investors are finding it increasingly hard to read how US President Donald Trump’s threats of tariffs will affect emerging markets as a whole.“Even though everyone is doing a rethink with Trump’s policies and the inflation impact, if at all, of tariffs, investors are looking for potential places to invest that might be able to be resilient to all of that going on in the background,” said Razia Khan, Standard Chartered’s head of research for Africa and the Middle East.Commodity-exporting frontier economies such as Nigeria are less integrated into the US economy than richer emerging markets that produce higher-value goods such as automobiles or electrical goods. That insulates the former group from wider tariff-driven sell-offs, said Alexis de Mones, debt portfolio manager at Ashmore, the emerging markets asset manager.“They don’t have high trade surpluses with the US [and] they are not as exposed to the noise from tariffs in general,” he said.Many of these countries are also coming off very difficult periods after high global interest rates in recent years led foreign investors to pull their money out, which exposed weak currencies and sent governments either to the IMF for help or forced drastic self-help economic policies.Egypt, Turkey and other countries that were hit by capital flight have enticed investors back in the past year with tough economic medicine to raise interest rates. Dropping unsustainable pegs to the dollar has helped drive double-digit returns on local currency bonds. Nigerian local currency government bonds have also performed well, especially in the past month. Many emerging market hedge funds produced their best returns in years by chasing these opportunities last year, and similar moves in dollar bonds of countries such as Argentina and Ecuador.“Foreign portfolio investors are thinking Nigeria could be the next Turkey,” said Charlie Robertson, head of macro strategy at FIM Partners. “There’s been proper change in the fundamentals of the Nigerian economy . . . two years ago, you had a currency that was uninvestable.”Nigeria’s stock market has gained about 4 per cent in dollar terms this year, better than many bigger markets. Nigeria had fallen off the radar for many international investors in recent years as controls on the naira made it difficult to extricate profits.Since President Bola Tinubu took office nearly two years ago, his government has removed fuel subsidies that had burned up foreign reserves, while the central bank removed a peg that propped up the value of the naira and increased rates to 27.5 per cent. The currency lost 70 per cent of its value against the dollar after two devaluations, but it has stabilised since November and is currently trading at what many observers believe is closer to its fair value, at 1,541 to the dollar.“There has been a series of economic reforms that have really made a difference in the tradability of Nigeria from a local currency assets point of view,” de Mones said. “Under the previous administration, the naira was kept at an artificially high level,” he said. “If you had invested in a prior period and you had to get dollars out, you had to get in the queue.”Despite the inflows of dollars from bonds bought by foreign investors, and a recovery in oil production to a four-year high last month, Nigeria’s gross reserves have fallen so far this year, to $38.5bn from $40bn. Investors said the drop was likely to reflect the central bank paying down debts that inflated the gross reserves measure. This would improve net reserves, but these are not published. Policymakers also appear to be targeting stability or slight appreciation in the naira, investors added.“I think they’re intervening to make sure the naira doesn’t come under a speculative attack,” said Bismarck Rewane, chief executive of Lagos-based consultancy Financial Derivatives. “My personal worry is that if oil prices drop or there’s a real reversal in gains from foreign portfolio inflows, the currency could be at real risk.”Inflation is also elevated at 23 per cent as of February, with higher food prices driving the high cost of living. “For the second leg of the trade, you need to see disinflation kick in,” said de Mones.StanChart’s Khan said: “We shouldn’t underplay the very real pain that ordinary Nigerians have felt through this liberalisation experience. The pain that people took may mean it takes a while longer before the benefits of all this are realised.”While the naira still appears cheap and insulated from trade risks versus other emerging markets, “it has become a more populated trade for foreign investors”, one manager said. “The more interest there is in these trades, the less idiosyncratic it is in terms of risk.” More