What will be the key factors driving EM debt markets in 2021?

The market seems very positive on the global backdrop — do you agree with the consensus views? How will this impact emerging market debt?

In spite of the 2020 rally, there are still attractive opportunities across different parts of the investment universe

The key factors driving EM debt markets are a strong global growth outlook for 2021, which would lead to credit improvements in the more cyclically-exposed economies, attractive valuations in EM currencies and higher yielding hard currency sovereign debt, and some selected local currency duration opportunities.

The US dollar should weaken from here, but this view could change if financial conditions tighten faster than expected in the US.

Asset Manager

Capital Group

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