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Massive Interest Burden Haunts $29 Trillion Emerging Debt Pile
US Blue-Chip Bond Issuance Reaches Second-Highest Level Ever
The dynamics have changed! Under the strong US dollar, emerging markets are at risk.
Analysis suggests that under deglobalization, the growth momentum will shift from emerging markets to the USA, which will be bullish for the US dollar. If the USA further implements even larger tariffs, many currencies in emerging markets pegged to the US dollar will become even more fragile and face the risk of explosive devaluation, especially countries like Argentina, Egypt, and Turkey. The prices of csi commodity equity index will also decline.
Trump's 2.0 policy supports the strength of the dollar, while emerging markets face a double blow in both stocks and currency.
The MSCI emerging markets stocks index fell by 0.8% at one point, marking its fourth consecutive day of decline, setting the longest losing streak in three weeks.
Global money market funds have attracted over $20 billion in inflows for three consecutive weeks, while demand for stock funds has cooled down.
Global currency market funds have attracted inflows for the third consecutive week.
HSBC: In 2024, the issuance of bonds in EMEA emerging markets is expected to reach a record high.
jpmorgan expects that although the November US presidential election and escalating tensions in the Middle East may cause market volatility, this year the bond issuance volume in the emerging markets of Europe, the Middle East, and Africa (EMEA) will reach a record high.