Emerging Divergence in Bonds

The spread between developed- and developing-nation yields is the widest since at least 2010

As the threat of U.S. inflation rises and benchmark Treasury yields approach 3 percent, 10-year emerging-market bond yields are offering investors the widest spread since at least 2010 over their developed-market counterparts. That’s because the recent global rout triggered an increase in yields in developing-nation debt, while inflation has remained benign, based on the average of 10 emerging markets compiled by Bloomberg. By contrast, consumer prices in the U.S. and Japan have accelerated based on most recent readings.

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