Bonds
Emerging Bonds Disrupt Playbook by Rallying as Treasuries Swoon
- Correlation between EM and US bond yields is nearing zero
- Resilient US growth is a positive catalyst for EM assets: Gama
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The old playbook of selling emerging-market bonds when Treasury yields spike is being upended by the positive dynamics favoring developing-nation debt.
Emerging bonds denominated in local currencies have extended this year’s rally — even as Treasuries slide — amid growing expectations for interest-rate cuts and optimism over a soft landing for the global economy. The correlation between emerging and US yields has dropped to almost zero, a Bloomberg study shows.