Can emerging market debt bounce back?

ON BONDS

Despite a recent sell-off in emerging market debt, the asset class has the strength to bounce back, said Aberdeen's Kevin Daly.

Risk appetite for emerging market debt has been hit in recent months by a run of improving US data and talk that the Federal Reserve may begin tapering its quantitative easing programme from September. Emerging market foreign exchange has borne the brunt of the ensuing sell-off and taken alone, these events might confirm the dependence of the asset class on the ‘lower for longer’ environment of unusually low interest rates.  The key question is, will short-term volatility pass and be outweighed by a background of strong fundamentals supporting emerging markets? Through the sector a...