How has our view of EM bonds changed in the last few months?
Our view on Emerging Markets bonds has undergone a change in the last few months. Last quarter, we were underweight on EM local currency bonds due to the strong US dollar and a slowing pace of disinflation across EM economies. 1 2
This month, we upgraded EM local currency bonds to neutral as more (or earlier) EM rate cuts and the search for carry should support better total returns. 1