Sovereign Analysis /
Global

Sovereign market outlook and issuance trends

  • In-person IMF/World Bank Annual Meetings in Washington have resumed this week, after a three-year hiatus

  • In an in-depth presentation, we discuss the year so far for emerging markets investors and what the outlook holds

  • EM bonds (and risks assets in general) have had a very difficult year amid the twin external shocks of war and rates.

Sovereign market outlook and issuance trends
Stuart Culverhouse
Stuart Culverhouse

Chief Economist & Head of Fixed Income Research

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Tellimer Research
12 October 2022
Published byTellimer Research

With the IMF/World Bank Annual Meetings being held this week in DC (see our preview report here), we have assessed the state of the world in 2022 and what the outlook holds for investors. Click on the "Download report" button for our full presentation.

  • EM bonds (and risk assets in general) have had a difficult year amid the twin external shocks of war and rates. Recession fears have increased but, for now, inflation remains the priority, which is likely to keep rates elevated for longer.

World inflation (% yoy)
  • Many frontiers and smaller EM have lost access to the market. Nearly 40% of countries in the index have a yield of 10% or more.

Public debt in EM and regions (% of GDP)
  • Debt restructuring is unavoidable for some but, so far, sovereign defaults remain limited and isolated. We do not expect a systemic EM crisis, but Common Framework reforms are needed to deal with likely consequences.