Emerging-Market Bulls Brace for Treasury Relapse After Rally
- Goldman says it closed EM currency trade recommendation
- Investors looking ahead to Indonesia, Russian rate decisions
Photographer: /AFP/Getty Images
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Emerging-market bulls who’ve benefited from moderating U.S. Treasury yields are bracing for a relapse as political risks pile up.
MSCI Inc.’s developing-nation stock gauge extended a three-week winning streak on Friday, while a basket of currencies capped its biggest weekly advance since early February. The risk premium on emerging-market sovereign debt narrowed to 339 basis points over U.S. Treasuries, its lowest since February 2020, according to data compiled by JPMorgan Chase & Co. Investors continued to pour money into exchange-traded funds dedicated to emerging markets.