Emerging market local currency debt has historically performed well when the US economy slows, providing exposure to local treasury yields from around 20 emerging countries and currencies. We discuss the characteristics of the current global cycle and how it might differ from previous ones.

What does this mean for fixed income investors?

Fixed income investors might find emerging market local currency debt appealing in the current economic climate. As the US economy slows and the dollar potentially weakens, this asset class has historically shown strong performance. With emerging market central banks having already paused or concluded their easing cycles, the focus on growth could offer attractive yields and reduced volatility. Investors may find it an opportune time to consider a tactical allocation to EM local debt.

About the Bond Bulletin

Each week J.P. Morgan Asset Management's Global Fixed Income, Currency and Commodities group reviews key issues for bond investors through the lens of its common Fundamental, Quantitative Valuation and Technical (FQT) research framework.

Our common research language based on Fundamental, Quantitative Valuation and Technical analysis provides a framework for comparing research across fixed income sectors and allows for the global integration of investment ideas.



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