Emerging Markets Debt: An Early Spring?
Streaming Income - A Podcast from Barings
Is There a Tightening Cycle?
The global economy is likely to slow down, even if China re-accelerates. The perception that I have is that central bankers have been surprised by the big spike in inflation. They realize how bad inflation is long term and so especially Jerome Powell has been very vocal about it. So they have a tool that they know has worked really well in the past, which is interest rates.
Ricardo Adrogue, Head of Global Sovereign Debt and Currencies discusses the Barings' team's increasingly positive view on the outlook for emerging markets debt.
Episode Segments:
(02:21) - Reasons to be optimistic about EM Debt in 2023
(04:28) - The tug of war shaping global economic growth
(07:15) - A multi-speed global economy in 2023
(08:40) - Why inflation may fall faster than expected
(14:40) - The EM rate picture and a potentially weaker dollar
(18:49) - The outlook for credit vs. rates
(20:04) - Assessing the major geopolitical risks in EMs today
(25:34) - The risk that China's re-opening disappoints
(29:16) - Why the IMF's changing view on defaults is a risk
(33:57) - Where the most attractive value lies in EM today
Links to recent papers referenced in the podcast:
- Emerging Markets Debt: Springtime in January?
- Why Quantitative Tightening Could Make Quick Work On Inflation
IMPORTANT INFORMATION
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