Bond Bears to Take Down Credit and Emerging Markets, SocGen Says

Societe Generale SA is telling yield-seeking bond investors to give up the ghost: they can no longer bank on dormant inflation underpinning risk bets, from credit to emerging markets to long-dated government debt.

“The bear market in rates has started, and with it credit, and eventually emerging markets, should both come under pressure,” strategists led by Brigitte Richard-Hidden wrote in a note to clients distributed Monday. “There has been a regime shift in the market, which implies further increases in yields.”