Bonds
Default Risk Fades in Emerging Markets as Riskiest Bonds Soar
- Junk-rated sovereign bonds score best start to year since 2019
- Vulnerable economies make steady progress in talks with IMF
Shoppers at the Sayyida Zeinab market ahead of Ramadan in Cairo.
Photographer: Islam Safwat/BloombergThis article is for subscribers only.
The risk of government defaults in emerging markets this year is subsiding, stoking a rally in bonds that were just recently teetering on collapse and propelling junk-rated sovereign debt to its best start to a year since 2019.
The prospect of a wave of investment in Egypt, a new government in Pakistan and a renewed political push for reform in Argentina have extended gains that many thought were petering out. Only 10 countries are now flashing signs of distress in the bond market, half as many as in 2022.