JPMorgan Says Big Payroll Number Closes Window for EM Local Debt
- Bank exits bullish recommendation as traders reassess Fed path
- Strategists see ‘little risk premia’ priced going into US vote
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JPMorgan Chase & Co. moved to the sidelines on emerging-market local bonds, shifting out of its positive stance after less than a month as traders reassess the path for the Federal Reserve’s interest-rate cutting cycle.
The bank cut its recommendation on local-currency debt to market-weight from overweight, citing the “big upside surprise” in US payrolls and risks stemming from the US presidential election in November. It is now neutral across the board in developing-nation assets: from currencies to corporate and sovereign debt, according to strategists including Jonny Goulden and Saad Siddiqui.