Dollar bonds of long-dated emerging market (EM) dollar bonds were down over 3% yesterday. Dollar bonds of sovereigns like Nigeria, Turkey, Colombia, South Africa and their like dropped. JPMorgan recently raised its outlook for emerging market hard-currency debt on Monday to “marketweight” from “underweight” as the US Fed is expected to transition to the next phase of its rate cycle after its softer than expected inflation print. Morgan Stanley also echoed JPMorgan’s view adding that they expect EM hard-currency debt to return more than 14% next year if inflation falls.

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