Commodity Losses Strip Emerging Markets of Their Lone Attraction
- Brazilian, Mexican, South African assets underperform peers
- Currency gauge heads for worst quarterly losses since 2020
A natural gas flare burns in Grayville, Illinois, US.
Photographer: Luke Sharrett/BloombergThis article is for subscribers only.
The most popular trade in emerging markets this year -- betting on commodity-exporting nations -- is losing its appeal.
The currencies and bonds of Brazil to Mexico and South Africa were the best performers among developing-nation peers in the first five months of 2022 as commodity prices skyrocketed following Russia’s invasion of Ukraine. They have turned laggards this month after growing fears of a global recession and China’s Covid lockdowns sent a Bloomberg gauge of raw-material prices tumbling 10% from an eight-year high.