Emerging Market Bonds Review Q3 and Outlook Q4

Les marchés émergents viennent de traverser deux chocs mondiaux majeurs et en sont sortis renforcés. Selon nous, ce n'est pas un hasard. De nombreux investisseurs ont raté le rebond post-Liberation Day en restant ancrés dans un cadre d'analyse qui ne décrit peut-être plus l'univers des marchés émergents. La même erreur d'interprétation risque d'aggraver une sous-exposition potentielle des portefeuilles aujourd'hui.

We believe EM fixed income is better positioned today than four years ago, despite uncertainty around the duration of the war and the disruption of oil supply. If de-escalation materializes in the short term, EM bonds may rebound amid a resumption of pre-war trends, including diversification away from US-centric portfolios.

In investment grade, several hyperscalers raised capex projections, driving record-breaking bond issuance. AI-related investments are heightening correlation risks and reshaping index compositions. In high yield, AI disruption creates risks and opportunities, particularly in software. The AI-capex trend has impacted the Swiss bond market, where new issuance remained elevated.

In the US and Japan, monetary policy is expected to support fiscal policy, even when central banks have other plans. Federal Reserve “Fed” Chair nominee Kevin Warsh's reform plans conflict with US President Donald Trump's preference for low rates, and the Bank of Japan's efforts to normalize policy clash with Prime Minister Sanae Takaichi's economic agenda.

Vontobel’s experts discuss how geopolitics, inflation and credit are shaping the outlook for fixed income, exploring the impact of the Middle East crisis, diverging paths between the U.S. and Europe, and where value opportunities may emerge across credit markets.

Vontobel’s experts provide their perspective on developments in the Middle East and Iran and discuss the potential impact on emerging market equities and fixed income.