We aren’t out of the woods yet Emerging markets fixed income – Q3 2022

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Emerging markets feel the impact of developed markets policy mistakes.

Emerging markets fixed income delivered negative total returns in Q3, mostly in response to developed market (DM) policy mistakes and reversals.

EM spreads tightened on cheap valuations and lack of supply, but rates and particularly currencies (EMFX) sold off, reflecting significantly higher global rates and a stronger US dollar.

EM asset performance during the fourth quarter of 2022 is likely to be influenced by global factors, including DM monetary policy and global inflation and growth dynamics.