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The US-EM high yield default rate differential widens to 2%
Weekly investor research
14 October 2019
Emerging Markets (EM) Corporate high yield bonds trades at 184bps wider than US Corporate high yield in spite of much lower
default rates. Ecuador’s President Moreno entered into talks with the opposition to review a controversial cut in fuel subsidies
following two weeks of protests. A no confidence vote in the Romanian government may pave the way for positive fiscal
developments. Brazil sets out on the long road to making its currency convertible. South Africa’s fiscal balance worsens.
Nigeria’s economic policies are heading in the wrong direction. Indian growth slows and RBI takes action. The global backdrop
delivers three positive and one negative development. The Fed begins to buy bonds in what appear to be an attempt to
facilitate greater government spending.