Bonds
EM Dollar Bonds Beat Treasuries as Risk Spread Hits Six-Year Low
- Premium shrank through turbulence around Fed rate-cut wagers
- Monetary easing, dollar strength prove twin blessing for bonds
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Global investors are the most upbeat in six years about emerging-market sovereign dollar bonds, whether the Federal Reserve cuts interest rates or not.
In the past two months, as monetary-easing expectations ran high after the Fed’s outsized cut, the bonds outperformed Treasuries. And now, as fears of “higher-for-longer” rates resurface, the bonds continue to beat US government debt, this time helped by renewed strength in the dollar.