There are attractive investment opportunities among high-yielding emerging market (EM) eurobonds in our view, writes Koon Chow, an EM macro and FX strategist at Union Bancaire Privée (UBP).
Follows US election result
Taking a long-term view
Emerging market fixed income has been one of the best performing assets classes of 2016 and this can be seen from improving industrial production and PMI indicators, showing that emerging economies are once again widening the gap to industrial countries....
Emerging market debt has gained more than 15% in 2016, outperforming all other major asset classes and markets, and confounding the roundly pessimistic expectations at the start of the year.
Renewed expectations of a US interest rate rise and the uncertain outcome of the imminent US election have recently contributed to more moderate returns from emerging market bonds after their solid year-to-date performance.
Outflows of $727m this week