Perhaps August will go down as the month when the vulnerabilities to a US monetary tightening cycle and trade wars became abundantly clear. Although emerging markets have been under pressure since the peak in late January there was a marked deterioration during August, led by the most vulnerable countries, Turkey and Argentina. A toxic combination of factors in the current macroeconomic environment has resulted in contagion spreading. While some of the problems were self-inflicted a common theme as contagion spread was the high levels of offshore debt, built up in the era of very low interest rates and the majority being in US Dollar. Countries exposure to global trade has made them vulnerable to trade wars, and having high fiscal and current account deficits has raised uncertainty over their economic sustainability. In August, the Emerging Market Currency Index fell by 6.2%, notably the Turkish lira and Argentinian peso both fell by 25% (Figure 1). The Venezuelan bolivar devalued by 95%, however, Venezuela is known for being a basket case due to their low international debt and hardly having any impact on the financial stability of the global economy. However, the collapse of oil production has played a key role in putting upward pressure on Brent Crude. This volatility has dragged down emerging market bonds, with local currency bonds down 6%. Hard currency emerging market debt has fallen 3.1%, and subsequently resulted in a 7.3% fall YTD. Emerging equity markets fell sharply, the fall of 2.7% in the global index masking much bigger falls in Latin America, Russia, South Africa and Turkey. From the January peak emerging equity markets are down 16% and several are in bear market territory with falls of over 20%.