Blooming in winter? – Emerging markets fixed income

The emerging markets fixed income team take a detailed view on what drove the market during a volatile Q3 2018 and draw some conclusion for the remainder of the year.

12 Oct 2018

Our asset class experts review the previous quarter and access opportunities for the months ahead. Emerging markets fixed income delivered mixed returns in Q3 2018.

Rising geopolitical uncertainty and poor policy responses to financial pressures, particularly in Turkey and Argentina, caused wild gyrations in credit, FX and rates amidst continued outflows from the asset class for most of the quarter.

However, we believe that various factors bode well for Q4 2018:

  • Global growth has stabilized above trend, compliments of the US
  • China is likely to show better activity numbers on expansionary policies, and trade news are likely to be mild in the remainder of the year
  • Geopolitics and demand from China supports commodity prices

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