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Emerging Markets Defy Risks as Central-Bank Rate Cuts Beckon

  • Pinebridge optimistic on outlook as central banks ease further
  • Egypt, the Philippines and Mexico seen cutting rates this week
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Photographer: Khaled Desouki/AFP via Getty Images

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For all the obvious negatives -- think surging oil prices, trade tensions and the U.S. Federal Reserve having possibly reached the limits of its dovishness -- emerging markets are keeping their heads above water.

While developing-nation currencies just weakened for the first time in three weeks, their implied volatility, at around 8.25%, remains below the past year’s average. The yield on emerging-market local-currency debt is within 10 basis points of the all-time low of 4.12% reached in August. And the MSCI Index of stocks isn’t far off its highest level in seven weeks.