Resilience Test Awaits Emerging Markets Unnerved by Treasuries
- Fidelity International trims ‘overweight’ in EM debt
- South Korea and Peru set to keep interest rates on hold
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Emerging-market equities were on fire, yet caution is creeping into other risk assets as rising U.S. Treasury yields keep investors on edge.
While the prospect of more U.S. stimulus drove MSCI Inc.’s gauge of developing-nation shares to a record on Friday, dollar bonds posted their first weekly decline since October as the yield on the benchmark 10-year Treasury note rose above 1%. Even the momentum that lifted emerging-market currencies to an all-time high faded toward the end of last week as the dollar strengthened.