EM financial conditions should stay favourable in 2021

Emerging market financial conditions remain very favourable in early 2021 even as inflation fears have grown and government bonds yields have crept up. It seems likely that any reversal wouldn’t be sudden or strong.

What you will learn:

  • Bond yields have risen for three months in a row amid significant government debt increases. 
  • Uncharacteristically, EMs are enjoying strong stock market performance and real estate prices. 
  • Loose monetary policy and abundant liquidity have also translated into lower interest rates, and spreads and currencies have broadly regained their losses from the start of the pandemic crisis and even gained some ground.

Topics: Emerging markets, Inflation, Financial conditions, Government bonds

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