Overnight the Russian Central Bank hiked its benchmark rate to 17 percent, a move designed to stem the big drop in the ruble. So much for that strategy. The ruble has continued to drop, now at 72 to the dollar; it was roughly 50 rubles to the dollar at the start of the month.
It stabilized as a Russian banking official said the central bank will take more measures. Are capital controls coming?
Still, the Russian stock market was down another 12 percent—and down 35 percent this month—though bear in mind this is quoted in dollar terms.
More worrisome is the rise in the yen. The yen carry trade is the classic safe haven play. So much money is invested in borrowing cheap yen and re-investing it all over the world that any reversal in the trend is a sign traders are covering bets.
That is what's happening, with the yen down to 116 to the dollar, from a little over 120 a week ago. Now, that is not a huge drop—on a percentage basis we saw a bigger move in early October—but it's enough to get everyone's attention.
Other emerging markets are also weak. The stock markets in Abu Dhabi, Saudi Arabia, and Dubai are all down roughly 6 to 7 percent. The Philippines, Indonesia, and Vietnam have fallen roughly two percent.