Carmen Altenkirch

To have a chance of limiting global warming to less than two degrees, the world must unlock huge investments in emerging markets. This is prompting calls for the reform of multilateral development banks, but will this be enough?

In the latest instalment of our new monthly series, our investment-grade, high-yield, emerging-market and global sovereign bond teams share their thoughts on key topics from across the fixed-income universe.

Carmen Altenkirch and Nafez Zouk report back from the recent International Monetary Fund/ World Bank meetings in Marrakech on the implications for EMD investors. 

How much do ocean circulation patterns impact economic outcomes and sovereign risk? Rick Stathers and Carmen Altenkirch assess El Niño, the climate phenomenon driving atmospheric circulation in the tropics, affecting everything from GDP to inflation and social stability.

Faced with escalating climate and biodiversity crises, developing economies are innovating with new ways to link bond issuance with sustainability goals. This brings risks and opportunities for investors, say Liam Spillane and Emilia Matei.

Despite short-term headwinds, Liam Spillane and Michael McGill argue emerging-market debt continues to offer attractive prospects for long-term investors.

With a series of shocks hitting the emerging-market sovereign bond universe in recent years, investors need to be alert to the danger individual countries’ debt is being placed in the wrong risk bucket and mispriced, argues Carmen Altenkirch.

China looks set for a rapid economic rebound in the first quarter after finally abandoning its zero-COVID policy. But will the recovery prove temporary as longer-term dynamics reassert themselves?

While uncertainty around the US rate-hiking cycle is affecting appetite for emerging-market debt, discerning investors can still find attractive opportunities in 2023, say Aaron Grehan and Carmen Altenkirch.

Despite ongoing market volatility and geopolitical uncertainty, 2023 could bring attractive opportunities for fixed-income investors, says Barney Goodchild.

After a bruising 12 months, our emerging-market debt team anticipates an improvement in the asset class’ fortunes in 2023 as declining inflation allows central banks to ease back on monetary tightening. But with many issuers still at risk of default, investors will need to tread cautiously.

Pessimism was in the air at the recent IMF/World Bank meetings, with emerging markets looking vulnerable to a tightening of global financial conditions. However, their orthodox policy responses should put many countries in a stronger position to meet those challenges than previously, argue Carmen Altenkirch and Nafez Zouk.

In this month’s instalment of our visual series on topical themes, we look at some of the biggest recent trends in EMD.

Emerging markets have been hit by stern economic challenges in 2022. But many companies are proving resilient thanks to strong fundamentals, as our emerging market corporate debt team explain.

Russia’s war in Ukraine has contributed to soaring food prices, supercharging global inflation. Poorer countries will likely be hardest hit, adding to the risk of social unrest. With public finances and incomes already under strain, emerging-market debt investors should be on high alert.

Aaron Grehan and Nafez Zouk from our emerging market debt team explain how the asset class is standing up to some significant headwinds.