Fixed Income
El Niño Threat Looks Underpriced in Emerging-Market Rally
- Investors may have been too fast to price in rate cuts: Gama
- Emerging markets are more vulnerable to El Niño impact: model
Sun sets on a hot summer day in Istanbul, Turkey.
Photographer: Francisco Seco/APThis article is for subscribers only.
Emerging-market bond bulls are betting the imminent end of central bank interest-rate hikes will help power up the asset class. El Niño may have something to say about that.
The periodic weather pattern that is currently forming in the Pacific Ocean typically results in hotter, drier conditions and therefore higher food prices in affected nations, giving policymakers more reason to keep pushing up borrowing costs. Among the developing-nation bond markets most at risk are India, the Philippines and Peru.