NN Investment Partners' head of emerging market debt, Marcin Adamczyk, has warned of a “collision of forces” facing emerging market debt in 2022, as consensus forecasts a “downbeat” year for the asset class.
Adamczyk noted that last year began well for emerging market fixed income, before US president Joe Biden's stimulus plan passed congress and pushed treasury rates higher. Then inflation started to take hold later in the year. "Central banks in emerging markets had no choice but to react by hiking rates. Events in China also dented sentiment. Authorities there started to tighten liquidity conditions to push real estate developers to reduce their leverage," said Adamczyk. "These problems, plus strong US growth and a rising dollar, created tough conditions for emerging market debt." P...
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