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Emerging Market Debt Market Commentary – October 2021


Emerging market debt (in USD terms) recorded modest negative returns as rising inflation trends across the world have prompted markets to price in an earlier-than-expected hiking cycle in the US and several other major economies. In addition to rising inflation (driven by high energy prices and supply chain disruptions), global and EM growth coming slightly off their peaks and lingering fiscal and political risks – particularly in Latin America (LatAm) – contributed to weakness over the month. Local and hard currency funds registered outflows in October of -$1.6bn and -$1.4bn, respectively.

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