Local currency government bonds in developed economies have typically fared much better than those in emerging economies over the past year. This is evidenced by the fact that the yield of the JP Morgan GBI Broad Index of developed market bonds has fallen by more than 40bp, whereas the yield of its emerging market equivalent, the JP Morgan GBI-EM Broad Index, has risen by more than 10bp. Indeed, this shift of more than 50bp has caused the gap between the two yields to increase to around 4.6 percentage points, which is close to its largest since the financial crisis. Looking ahead, though, we think the gap is likely to shrink.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services