Global Emerging Markets Update - March 2021

12 April 2021

After the strong performance in recent months, EM capital markets corrected over March. This was mainly influenced by the continued rise in US treasury bond yields, and a renewed surge in COVID-19 cases across many EMs.

For the first time in two years the number of countries raising interest rates was more than those that reduced. Is this a sign of more widespread inflation and policy rate tightening to come? Recent statements from central banks in advanced countries continue to suggest not.

We see lower risks of inflation derailing the EM economic recovery relative to the US. This could translate into US Dollar weakness, which would be positive for EM assets.

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Northcape Capital

Northcape Capital
Expert Investment Partner