The fundamental strength of emerging markets was recently reaffirmed by January purchasing managers’ indices, with nearly 90% of EM countries registering in expansionary territory.In an environment in which a broad range of markets, from equities to US Treasuries, have sold off, EM local rates have been surprisingly immune. Despite this de-correlation with risk markets, we do not believe that EM local rates are due for a correction: fundamental factors remain very solid and valuations are compelling, suggesting that demand for the sector will persist.
– source JPMAM
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