Treasuries Reprieve Buoys Emerging Markets, but Buyers Are Picky
- Rotation to underperformers will drive market, TS Lombard says
- Colombia, Egypt forecast to keep interest rates on hold
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Even with this month’s retreat in Treasury yields, investors could be forgiven for taking a cautious view of emerging markets.
The renewed surge in Covid-19 infections from India to Argentina and political risks in Turkey and Peru have made investors more selective. The recent plunge in Indian assets is a reminder the global fight against Covid-19 isn’t over yet for many developing economies, even though an environment of stabilizing U.S. yields would bode well for emerging-market currencies and bonds, Citigroup Inc. said in a report.