IIF tracker confirms EMs might want to wipe August from their memories: Net emerging markets portfolio inflows witnessed their most unfortunate month in August since November 2016, according to the Institute of International Finance’s (IIF) most recent capital flows tracker. Investors pulled out roughly USD 13.8 bn from EM stocks and bonds in August as a consequence of the US-China trade row and jitters over slowing global growth, the IIF estimates.

Equity flows were negative at USD 14.1 bn, but debt saw (slightly) positive flows of USD 0.3 bn. The “negative outcome was uniform across all regions.” This came despite July proving a “relatively” positive month, with net inflows of USD 24.3 bn, according to the tracker.

But Egypt managed to keep its cool: Net inflows, including errors and omissions insurance (E&Os), into Egypt were USD 2.1 bn in July. Inflows recorded USD 7 bn in 1Q2019 and USD 3.8 bn in 2Q2019, and are forecast to reach USD 7.3 bn by the end of 2019.

Overall, August has been a nightmare for EM inflows: We picked up a Bloomberg report earlier this week saying that “August was a month to forget for emerging-market investors.” EM stocks suffered USD 873 bn in losses during the month, and currencies experienced their worst monthly run since 1997. An increasing number of press reports, including one yesterday by Reuters, is placing at least some of the blame on EM central banks moving ahead with the largest number of coordinated rate cuts in a decade. EM central bankers followed the lead of the US Fed, which cut its benchmark rate by 25 bps in July.