At Any Rate EM Fixed Income: 'Tis the Season for Volatility
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Dec 19, 2024 Market volatility takes center stage as experts dissect the recent performance of Emerging Market Fixed Income. Insights reveal how political factors are now outweighing economic ones, especially in Brazil and Mexico. The discussion highlights unique investment opportunities amidst anticipated shifts in policies and global dynamics. Turkey and South Africa emerge as promising options, while the economic turbulence in Brazil raises concerns. Get ready for a deep dive into navigating risks and seizing opportunities as 2025 approaches.
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Politics Over Economics
- Politics will be more important than economics in emerging markets investing.
- Macroeconomics is downstream from political and geopolitical decisions.
Fiscal Focus
- Fiscal policy is now a primary driver of emerging markets, not just external balances.
- Fiscal concerns are arising even in countries with mostly domestic debt, like Brazil.
Beware Consensus
- Be wary of consensus trades in emerging markets.
- This year, consensus favorites Mexico and Brazil underperformed.