Citi: Current A/c's Should Limit Vulnerability To U.S. Yields

Citi note that "when risk appetite declines on the back of rising U.S. yields, EM's vulnerability to the resulting capital outflows is really just a function of how much dependence they have on capital inflows in the first place. The very strong current account positions in EM these days help to insulate EM asset prices because these countries' need for financing is relatively small. Of course, it is tragic that the basic cause of these surpluses is recession rather than robust export growth, but from the perspective of external financial stability, strong current account positions in EM should limit EM's vulnerability to rising - and, remember, still negative - real U.S. yields."