The 'powerful factor' set to drive emerging market debt gains

As we enter Q2, we see particular value in the hard currency and frontier market spaces within emerging market debt (EMD).

With idiosyncratic factors and country-specific risks coming to the fore in recent years, a selective approach is therefore essential. Emerging markets (EMs) faced significant challenges in 2018. The strong performance of the US economy and the continuation of monetary policy normalisation led to higher US treasury yields and a strong US dollar, which in turn impacted sentiment towards EM currencies. Furthermore, geopolitical risks were running high in 2018, specifically US-China trade tensions, affecting the outlook for commodities.  T. Rowe Price's Bell sees upside potential i...