M&G's Calich: Higher US rate environment less challenging for some EMs than a few years ago

Emerging market bonds generated decent performance in the first half of 2017, rallying well after weakening towards the end of last year on the US election result.

Gains were delivered across the local and hard currency sovereign markets, as well as hard currency corporate credit, with sentiment favoured by factors such as strengthening global economic growth and reduced political concerns in developed countries.  While we believe that investors were right to weigh up the potentially adverse implications for emerging markets of a Donald Trump presidency, the rhetoric of the new administration towards key issues such as NAFTA (the North American Free Trade Agreement) has softened somewhat since his inauguration in January. M&G's Calich: What are ...