{"id":501866,"date":"2025-10-15T16:06:29","date_gmt":"2025-10-15T16:06:29","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/501866\/"},"modified":"2025-10-15T16:06:29","modified_gmt":"2025-10-15T16:06:29","slug":"fund-managers-report-more-certainty-in-em-than-in-developed-markets-the-desk","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/501866\/","title":{"rendered":"Fund managers report more certainty in EM than in developed markets\u00a0 – The DESK"},"content":{"rendered":"

\"\"The key takeaway from the first plenary session at the Fixed Income Leaders Summit in Amsterdam was clear; in 2026, uncertainty has become a developed market problem while the emerging market environment seems more benign.<\/p>\n

Three panellists gave their outlook for 2026. Uncertainties they planned for were all related to developed markets evolutions from US and European central banks policy changes to the future of the AI turbocharged capex boom or stablecoins \u00a0<\/p>\n

\"GiuliaGiulia Pellegrini, Allianz Global Investors.<\/p>\n

Allianz\u2019 deputy CIO for emerging markets fixed income Giulia Pellegrini said, \u201cOur baseline is softer US growth and pressure on the Fed to ease, which lets an asset class like mine perform strongly. We\u2019re constructive for 2026\u201d.\u00a0<\/p>\n

Outside of Turkey or Argentina, she indicated that she expects emerging market growth to be about 2.5% over developed market while keeping a benign outlook. \u00a0<\/p>\n

She added, \u201cEM central banks have built comfortable real-rate cushions, roughly 10% in Brazil, 3.5% in South Africa and Mexico, so they can ease into softer global growth\u201d\u00a0
This positive attitude has been fertile ground for EM issuance with September the largest month for issuance so far this year.\u201d<\/p>\n

This is reflected in trading volume too with weekly volume in EM printing US$3.8bn on average per week in September versus US$2.9 bn in August, according to data from MarketAxess\u2019s TraX tool, which measures activity across markets.\u00a0
\u00a0
Despite this, exogenous effects will still have an effect as emerging market debt is a spread product over US rates. <\/p>\n

\"PhilippePhilippe Waechter, Ostrum Asset Management.<\/p>\n

As such, uncertainties highlighted by Philippe Waechter, chief economist at Ostrum, including what might happen at the Fed when Jerome Powell finishes his term in May 2026 as well as the impact of a new funding channel for US debt thought stablecoins would have an impact on EM debt.\u00a0<\/p>\n

Seamus Mac Gorain, global head of rates at JP Morgan asset management was more positive arguing that there are actually guardrails protecting the fed independence.\u00a0<\/p>\n

\u00a0<\/p>\n

\"SeamusSeamus Mac Gorain, JP Morgan.<\/p>\n

He said: \u201cPressure on central banks isn\u2019t new, and there are strong institutional guardrails. It\u2019s not so easy to \u2018take over\u2019 a central bank.\u201d\u00a0<\/p>\n

For EM portfolio managers and their traders, uncertainties crystallising at times are sought as an opportunity to invest in EM paper. Pellegrini agreed about this tactical view on 2026 in her bullish stance. <\/p>\n

\u201cThere will be volatility, but we see it as an opportunity,\u201d she said. \u201cIt\u2019s how active management can deliver alpha. Local-currency EM has been super resilient, and we think it continues to drive performance.\u201d\u00a0<\/p>\n

Pellegrini will not be on her own chasing opportunities to pick up EM debt. At another panel on diversification, Desmond Lawrence, senior investment strategist at State Street Investment Management echoed her and went further in its view on EM debt. \u00a0<\/p>\n

He said: \u201cIronically\u2014and slightly perversely\u2014EM debt has, in some respects, better credentials than DM debt. Debt-bearing capacity does differ, and that matters. But the inflation trajectory in many emerging economies is clearly moving in the right direction, in sharp contrast to DMs. Even in the plain-vanilla space, there\u2019s a case for EM debt.\u201d\u00a0<\/p>\n

\u00a9Markets Media Europe 2025<\/p>\n

TOP OF PAGE<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The key takeaway from the first plenary session at the Fixed Income Leaders Summit in Amsterdam was clear;…\n","protected":false},"author":2,"featured_media":501867,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3091],"tags":[51,2441,16,15],"class_list":{"0":"post-501866","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-markets","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115379044096756930","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/501866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=501866"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/501866\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/501867"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=501866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=501866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=501866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}