Blue Quadrant Research Team 0 comments Market Commentary
Emerging Market Corporate Bond Market
Where do the risks lie?
The recent rise in corporate bond yields (widening in corporate bond spreads) has been one of the factors driving some of the recent negative sentiment towards global equity markets. The recent rise in bond yields, in part driven by a tightening in USD liquidity, has mainly been the result of the deteriorating global growth expectations and specifically earnings expectations in the energy and broader commodity sectors. As such, default risk or the perceived risk of default has risen markedly over the past six months and, in turn, leading to a general re-pricing of risk in the corporate bond market.