EMEA Fixed Income:Let the summer go on...

EMEA Fixed Income - still attractive? Despite the strong performance already seen across EM Fixed Income this year, variables for EM Fixed Income have not yet deteriorated enough to become concerned on risk-rewards in local assets. In fact, we argue that the improvements on inflation dynamics and the supply outlook as well as higher term premium offset the now richer valuation. We remain constructive on our asset class and see further room for an outperformance in H2-17. Nevertheless, we should also not ignore the deterioration in some variables - particularly “positioning. (For more on variables and valuation in EM Fixed Income please see our latest EM Fixed Income Scorecard - September 2017)

    Favourite positions: We highlight in particular Russia and Poland as our favourite positions while we are more cautious on FI in Turkey and keep a close eye on developments in South Africa.