Emerging Markets – Buyer Beware

Riding on the back of dollar weakness EM currencies have been good to investors over the past year and a half. However, inflation is lurking and with it threatens to bring this buoyant EM period to its end. In addition, recent research from Capital Economics forecasts that currencies of some of the largest EMs will fall over the next few years as investors’ risk appetites shift towards more conservative investment spaces. 1 EM Debt – Is the Party Over? EM local currency bonds have been quite the investor darling recently – delivering investors a return of 3.4% into mid-February, compared against…