Candriam's Deltcheva on the outlook for emerging market debt

The EMD hard currency (HC) asset class has declined by 4.75% since the beginning of the year.

The correction was primarily driven by the 65bps 10-year US Treasury widening, although EM spreads over US Treasuries did not manage to hold their gains moving up by 70bps as well. Are we in a bear market for EMD or should we view this correction as a buying opportunity? Historically, US Treasury volatility has been negatively correlated to EMD HC risk premiums as EMD HC is a USD denominated asset class.  Over-gloomy news flow creating opportunities in EMD As a result, in periods of sharp upwards moves in US Treasuries, EMD HC typically underperforms, both due to the Treasury as...