EM Fixed Income: Emerging Markets Outlook and Strategy for 2024
The US cycle will be the big EM fixed income driver again in 2024, likely resolving either into a soft-landing or a recession. Given data equivalence will keep this unresolved in the near term, there is space for the smaller cycles of EM monetary policy and defaults to be the primary drivers of EM performance into the start of 2024. Stay OW EM FX focusing in high carry; receive EM rates front-end but stay MW in GBI-EM local duration; stay MW in EM Sovereign and Corporate credit. For FY 2024, we forecast local market (GBI-EM in USD) returns of 7.67%, with local yields -75bp to 5.76% and EM FX spot returns of -1.17%. We forecast EMBIGD spreads at 475bp (+50bp) and CEMBI BD spreads at 330bp (+30bp) for total returns of 12.2% and 10.0%, respectively. Speakers: Luis Oganes, Head of Global Macro ResearchJonny Goulden, Head of EM Local Markets and Sovereign Debt StrategyNora Szentivanyi, Global Emerging Markets Economist This podcast was recorded on 22 November 2023. This communication is provided for information purposes only. Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-4557696-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2023 JPMorgan Chase & Co. All rights reserved.