The U.S. Treasury selloff has triggered a global financial contagion, with:
• Japan: 10-year JGB yields break 1% ceiling
• Germany: Bund spreads over Treasuries narrow to 120bps
• EM crises: Indonesian rupiah hits 1998 Asian crisis levels
“The dollar is exporting financial instability,” said IIF’s Robin Brooks.
Critical transmission channels:
✓ $12T in dollar-denominated EM debt
✓ Synchronized central bank tightening
✓ Currency hedge unwinds
Most vulnerable nations:
→ South Africa (debt/GDP at 72%)
→ Turkey (inflation at 65%)
→ Argentina (reserves dwindling)
