Emerging-Market Bond Rally Threatened as Hawkish Flags Multiply
- Easy money in emerging-market bonds is gone, Nikko Asset says
- T. Rowe Price says next leg up may take place toward year-end
The Madureira Market of Rio de Janeiro.
Photographer: Maria Magdalena Arrellaga/BloombergThis article is for subscribers only.
The balmy days of dovish monetary policy that fueled a rally in emerging-market bonds looks to be over as central banks across the developing world turn more hawkish.
Returns from emerging-market local-currency debt are trailing their dollar-denominated peers by the most in two years as resurgent inflation has damped the prospect of further interest-rate cuts in Latin America and Eastern Europe. At the same time, policymakers in emerging Asia have signaled an increasing unwillingness to ease policy before the Federal Reserve.