At Any Rate EM Fixed Income: Getting fully back on the EM horse
Feb 13, 2026
Discussion centers on structural improvement in emerging market currencies and the role of global growth. They compare tech-stock volatility with EM fixed income resilience. Dollar weakness and its support for EM sovereigns and reserves are examined. Conversation covers why EM credit spreads have held up and recent early-stage inflows into EM funds.
AI Snips
Chapters
Transcript
Episode notes
Two Key Drivers Behind EM Gains
- EM outperformance is driven by a structural turn in currencies plus a cyclical growth upgrade.
- Both themes support EM currencies and local bonds even amid periodic volatility.
EMFX Priced To Current Optimism
- Global economic surprise indices and EM forecast revisions are at historically high levels.
- EMFX is priced fairly versus surprises, so spot upside may be limited near-term.
Prefer High-Carry EM Currencies
- Overweight EM currencies now but focus on high-carry names to cushion any mean reversion.
- Avoid low-carry currencies that recently lost interest-rate advantage until carry improves.