Emerging Market Bonds Climb To Over 2-Year High Driven By Weaker Dollar, Fed's Interest Rate Shift
Portfolio Pulse from Piero Cingari
Emerging market bonds have surged to over a two-year high, driven by expectations of a Federal Reserve interest rate cut and a weaker U.S. dollar. The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) and the iShares J.P. Morgan EM Local Currency Bond ETF (LEMB) have seen significant gains. The U.S. dollar's depreciation, particularly against Asian and Latin American currencies, has also contributed to this trend.
August 20, 2024 | 8:15 pm
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The iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) has rallied to levels last seen in May 2022, driven by expectations of a Fed rate cut and a weaker dollar.
The EMB ETF, which tracks dollar-denominated bonds from emerging markets, has benefited from the weaker dollar and expectations of a Fed rate cut, leading to a significant rally.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
The iShares J.P. Morgan EM Local Currency Bond ETF (LEMB) has climbed to a one-year high, supported by a weaker dollar and potential Fed rate cuts.
LEMB, which invests in local-currency-denominated bonds from emerging markets, has seen gains due to the weaker dollar and anticipated Fed rate cuts, reaching a one-year high.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 85