Flatter U.S. Yield Curve Dominates Emerging-Market Trader Minds
- Investors await stability in shorter-dated U.S. yields
- Yield curve to bottom ‘around peak Fed hawkishness’: Nordea
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Emerging-market investors are waiting for an important signal from the U.S. bond market before piling into developing currencies: more yield-curve flattening.
Concerns that the Federal Reserve may overshoot with faster interest-rate hikes that could slow the economy have led to a flattening of the U.S. yield curve -- with shorter-dated yields rising at a faster pace. Fidelity International and Nordea Investment are waiting for the curve to turn almost completely flat before ramping up their wagers on emerging-market currencies.