EM bonds start to suffer as UST volatility takes toll

By Oliver West
25 Feb 2021

Emerging market assets took a hit after several days of US rates volatility this week as market participants braced for further gyrations and issuers avoided raising dollar bonds. Market participants are praying that further central bank stimulus will pacify markets and believe that the asset class is far better prepared for higher rates than it was for the 2013 taper tantrum. Oliver West, Lewis McLellan and Mariam Meskin report.

The speed of the sell-off since last Friday has taken markets by surprise, with EM spreads widening around 10bp-15bp, according to investors.

Thursday’s jump in the 10 year Treasury yield, from 1.38% at Wednesday’s close to above 1.60% before closing at 1.54%, showed there is no sign of ...

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