Pork not sanctions

Eurostat released Jan - Feb EU28 trade results last week and with the focus on Russia today, couldn't help but notice this:

But as Bloomberg News reports:

Italy, France, Belgium, Denmark, and the Netherlands are ready to provide bilateral pork-safety guarantees that would allow trade with those countries to resume, Russia’s Rosselkhoznadzor agency said in a statement yesterday. Russia blocked imports of EU pork in January after the fatal pig disease was discovered in wild boars in Lithuania and Poland, spurring the EU to file a case with the World Trade Organization last month. Russia is historically the largest buyer of EU pork.

“All this delays a solution for resuming pork deliveries from European Union countries to Russia,” Rosselkhoznadzor said. “Supplies from other areas are replacing European pork on the Russian market.”

Emerging market volatility at pre-taper lows

Investors are once again noticing the carry trade opportunities in Brazil.

Reuters:

BRL-denominated uridashi -- bonds targeted at Japanese retail investors -- rose sharply this year as a percentage of emerging market issuance, even as total uridashi issuance has shrunk, Brown Brothers Harriman data show.

As of last month, BRL-denominated uridashi issuance has comprised more than half of total emerging market uridashi issuance, up from an average share of 29 percent in 2007-2013.

The potential for hefty returns has not escaped the notice of even some traditionally conservative Japanese investors, and market sources with access to institutional flow data cite increased carry-trade activity in recent months.

A senior official at Japan's second-largest private life insurer Dai-ichi Life Insurance Co told a news conference last month the insurer would not buy Japanese government bonds at current low yields and that it added Brazil to its stock and bond portfolios last financial year.

According to Thomson Reuters Eikon's carry trade model, a yen investment in the Brazilian real would have earned more than 7 percent so far this year, with Sharpe ratio of 1.93, a level that suggests a good return in comparison to risk.

The JP Morgan EMBI bond volatility index (not shown) is back to its pre-Fed taper tantrum May 2013 lows which can also be seen in emerging market ETFs.