Oil price reaction muted. Fears of disruption vs. increased Venezuelan production curbing prices. Important for inflation dynamics in EMs. Central banks can continue their job.

Risk perception has increased as rules of the game change with more military involvement, creating potential hotspots (Taiwan, Europe, Iran).

Dollar is not acting as a safe asset. As long as dollar remains relatively weak, that is conducive for emerging market investments.

On oil: Venezuela export increase is good for smoothing inventories, but flow is only to US. Problem for countries like China that benefit from discounted Venezuelan oil.

China data confirms divided economy: exports driving growth, weak domestic demand, low inflation. US move on Venezuela is part of confrontation with China over control of natural resources.

Venezuela action makes Latin America less stable. Important elections in Brazil, Colombia. Trump's warnings can have counter-intuitive impact (e.g., increased approval for Lula after sanctions). Region reacting to sense of security.