UBS | Between 2010 and 2014 global investors showed tremendous generosity towards EM, helping it issue forever larger amounts, and easily roll over debt coming due. In 2015 sentiment began to sour, and the primary market is even less benign today.
LONDON | World trade volumes –for both goods and services– have risen by less than global GDP over the past four years. This is an unprecedented outcome in post WW2 history, UBS analysts point out.
LONDON | By Barclays analysts | EM markets are likely to enjoy supportive conditions over the next few weeks. The resolution of the US government shutdown, expectations of QE tapering pushed further into 2014, the emergence of some EM re-coupling to stronger global manufacturing and still-attractive EM valuations should all be helpful factors. Liquidity considerations are likely to become a less important market driver, and higher-yielding EM assets, particularly in EM credit, should attract further support where bottom-up fundamentals allow.