Gainers

Losers

Data Provided by MSCI Inc.

Editor's Choice Graph	Graph Description
	Returns of the MSCI All Country Europe Index, past 5 trading days, priced in USD and local currencies

Macro Notes
It was a tepid week for foreign currencies, as the markets seemed to be holding their breath awaiting more news from Europe.

The euro continued its slide, and on Thursday dropped to its lowest price in a month. News of the European Central Bank bond purchase program seems to have allowed some optimism to creep into markets on Friday, but the euro still weakened more than 0.5 percent against the dollar for the week. Other global currencies fared much the same, with only the Japanese yen ending the week stronger.

All in all, currency markets worldwide seem to be taking their lead from the euro. That meant another tough week for U.S. investors, who faced not only negative returns globally, but were also burdened by the strengthening dollar.

Gainers

Losers

Data Provided by MSCI Inc.

Editor's Choice Graph	Graph Description
	The Polish zloty started off the week in a free fall, before recovering slightly on Friday on Prime Minister Tusk’s outlined budget cuts. Alas, the USD-denominated index had already fallen too far to recover much.

Macro Notes
Last week was another rough week for the markets, and, as usual, Europe led the pack with plummeting equities and a plummeting currency.

On Wednesday, the head of the IMF’s Europe Department, Antonio Borges, resigned. Although he claimed personal reasons, he couldn’t have enjoyed the position much as of late.

On Thursday, the spotlight shifted from Italy to Spain and, to a lesser extent, France. Spain’s 10-year debt auction yielded nearly 7 percent, approximately 1.5 percent more than the comparable auction in October. France’s bonds maturing in July 2016 were auctioned at a 2.8 percent yield, 0.5 percent higher than the yield in October. As investors worried about Spain and France, they calmed down about Italy, whose borrowing costs fell back slightly to 6.79 percent.

Gainers

Losers

Data Provided by MSCI Inc.

Editor's Choice Graph	Graph Description
	The Thai baht was the lone currency gainer this week for U.S. investors, eking out a marginal gain vs. the greenback.

Macro Notes
In what has become a disturbing theme, the Asia Pacific region experienced another week of heavy selling, with all of the region’s markets losing money for dollar-denominated investors. The worst-performing market, India, lost an amazing 8 percent in dollar terms over the course of last week.

It seemed like just yesterday that India’s economy was the crown jewel of the developing world. Fast-forward to last week, and you have what looks like an unmitigated financial disaster.

India’s currency, the rupee, is crashing, with no end in sight. A substantial fiscal deficit is on the horizon. The economy is falling, leaving analysts looking for a potential bottom. Add it all up and you get a faltering economy that is supposed to be one of the world’s engines of growth.

New Zealand, meanwhile, is facing its own laundry list of worries, as demonstrated by last week’s 6 percent decline in dollar terms. The New Zealand dollar, a linchpin of regional stability in recent years, hit its lowest level in a month last week.

This in part due to the rising cost of borrowing for the country’s banks, whose heavy dependence on foreign borrowing due to low household savings rates has left the nation’s financial institutions exposed to rising European interest rates.

A slower rate of inflation, as evidenced by a lower than expected PPI result, was enough to fan the flames of currency weakness last week, further eroding dollar-denominated returns.

Elsewhere, the Australian dollar endured its third straight week of losses thanks in part to continued concern about the country’s exposure to Europe.

China followed suit, experiencing another week of heavy selling on both the local and Hong Kong exchanges. This came despite positive news out of Beijing showing signs of momentum from the country’s leading indicators. The bleak economic landscape in Europe claimed another victim this week, Japan, as the country cut its economic outlook.

On a positive note, the Malaysian economy grew at a lofty 5.3 percent clip in the third quarter, although the announcement wasn’t enough to prevent the country’s market from registering a 1.33 percent loss for the week.

Gainers

Losers

Data Provided by MSCI Inc.

Editor's Choice Graph	Graph Description
	The returns of the MSCI Chile Index, past 5 trading days, priced in USD and CLP

Macro Notes
Latin America wasn’t spared from the decline in the markets last week. Continued fears due to the crisis in Europe led to negative returns for U.S. investors in Latin American countries. Currency impact was negative across the board with the exception of the Peruvian nuevo sol. U.S. investors in Brazil and Chile took the largest hits as currency impact drew down the returns of investors.

Concerns grew among traders that Europe’s debt crisis would lead to lower demand for copper. As of last Friday, copper fell more than 20 percent. Of course, this directly impacts investors in Brazil and especially in Chile. However, Bloomberg reports that global demand for the metal is still expected to grow next year—bringing renewed hope for the Latin American region.

At the same time, Brazil continues to recover from an offshore oil spill that Chevron claims is now reduced to “seepage.” This comes at a time when foreign oil companies are waiting for Brazil to auction off new exploration areas in the deep waters of the Atlantic.

Gainers

Losers

Data Provided by MSCI Inc.

Editor's Choice Graph	Graph Description
	Returns of the iShares MSCI South Africa Index Fund and the USD/ZAR cross rate, past 5 trading days

Macro Notes
Bad macro news from Europe again cast a long shadow on emerging markets.

In Israel, the currency effect from the shekel for U.S. investors was muted. Third-quarter growth, reported at 3.4 percent on an annualized basis, apparently wasn’t enough to prop up local returns.

Earnings were off 40 percent for mobile service provider Cellcom, underperforming analyst projections. Cellcom is a top 10 holding in the MSCI Israel Capped Investable Market Index Fund (NYSEArca: EIS).

In South Africa, the rand slid big for the week against the dollar, though it clawed back some of the lost ground last Friday.

Local returns for Impala Platinum Holdings, a top 10 holding in MSCI South Africa Index Fund (NYSEArca: EZA), fell midweek. Production at one facility was interrupted after two workers were trapped underground.

Harmony Gold Mining Co., a top 20 holding in EZA, also lost ground for a similar reason.

Gainers

Losers

Data Provided by MSCI Inc.

Editor's Choice Graph	Graph Description
	Returns of the MSCI United States and MSCI Canada Index, past 5 trading days, priced in USD

Macro Notes
North American equities took a dive last week, with the U.S. dropping 3.7 percent, while Canadian equities, in U.S. dollar terms, lost 4.4 percent.

In the U.S., positive macroeconomic surprises continue to play second fiddle to the ongoing saga of the European debt crisis.

This week, retail sales for October and industrial production both came in above expectation, as did the number of housing starts and building permits. A growing sentiment among forecasters is that the economy will continue to expand at rates not seen in a year and half.

On a less favorable note, the Nov. 23 deadline for the congressional supercommittee to reach a deficit reduction deal is fast approaching. The supercommittee has little to show for what have now been several months of negotiations.

If a deal to reduce the deficit isn’t reached in time, $1.2 trillion of cuts could take effect in 2013. Congress’ inability to reach a compromise adds further uncertainty to an already unstable market.

U.S. investors in Canada came up short on both the equity and currency fronts. Canadian equities slumped following drops in both oil and gold prices. Although the Canadian dollar rallied toward the end of the week, it still depreciated relative to the U.S. dollar, losing U.S. investors more than 1 percent in the process.