Global Bond Turmoil Reveals the Surprising Resilience of Emerging Markets

“It’s very clear that EM is behaving differently than in the past, and EM is holding up better than expected.”

It’s been a helter skelter kind of year for the global economy. China unexpectedly became a major oil power player, the yen carry trade is facing a reckoning, and water levels in the Panama Canal are so low that it’s disrupting global shipping. So, it should be no surprise that an unusual pattern is emerging in the debt markets: Developed market bonds are starting to act like their emerging market counterparts. If you want to understand how exactly this role reversal came to be, keep reading. I also sat down with Michael Lohan, the head of Ireland’s foreign direct investment agency, to get his thoughts about how Ireland is weathering the current trade upheaval. And don’t miss the sudden demise of the Mexican “super peso.” Mentioned in this newsletter**: FTSE G7 and EMU government bond index**, Thomas Haugaard, VanEck J.P. Morgan EM Local Currency Bond ETF, Eric Fine, CEO of IDA Ireland Michael Lohan, Mexico’s Peso, Flávio Bolsonaro, XP. You can subscribe to Barron’s Global Signals .

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