Never Mind The Bumpy Ride. Emerging-Market Bond-Buyers Are Back
- Implied currency volatility suggests the worst may have passed
- Central banks in Russia, Turkey and Ukraine seen cutting rates
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An absence of bad news may be just enough to keep emerging markets on track for a rebound, even as many developing economies remain in pandemic-forced lockdowns. High-yield bonds are likely to be among investor favorites.
Optimism in the coming days may extend the advances of the past two weeks, spurred by hope on Friday for a coronavirus treatment and the prospect of a staggered reopening of the U.S. economy. Options traders are also betting that the worst of the rout may have passed. JPMorgan Chase & Co’s implied-volatility index for emerging-market currencies has declined from the nine-year peak reached a month ago after a deluge of central-bank stimulus.