Bailout Euphoria Signals Peak of Pessimism in Emerging Markets
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A fruit vendor on the flooded street in Rawalpindi, Pakistan.
Photographer: Asad Zaidi/BloombergThis article is for subscribers only.
It may be too early to turn bullish on emerging markets -- but a raft of bailouts pledged by the IMF and China has some investors deciding it’s also too risky to stay bearish.
Over the past two weeks, the International Monetary Fund has been sewing up or inching toward loan agreements with vulnerable nations Pakistan, Sri Lanka, Zambia, Egypt and Chile. Meanwhile, China is overcoming its own reticence to offer debt relief, saying it will forgive the liabilities of 17 African countries and redirect its own IMF reserves to the continent’s aid.