EM Fixed Income: remarkably unexpected
Emerging markets fixed income (EM FI) did well in 2019, reflecting better global economic activity and US-China trade negotiations, and easier DM central bank policies. Can EM FI markets rally further in 2020?
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This paper focuses on the surprisingly strong returns in emerging market fixed income over 2019 amid a more positive tone on US/China trade negotiations and the impact of central bank policy. We also look at what investors can expect in the first quarter of 2020 and beyond. However, a number of significant headwinds remain including a sharp China slowdown, an uncertain political environment, and frothy valuations in many markets, most notably credit.