Although central banks in a couple of emerging markets (EMs) have taken a less accommodative stance than we had expected over the last two weeks, we remain more dovish than the consensus and investors across most EMs. This is primarily because we expect output gaps to remain quite large, which should keep core inflation subdued, while we also expect food inflation to slow. As a result, we think local currency government bond yields will generally remain low, and even fall a little further in some places.
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