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Matthias Knab, Opalesque:

Neuberger Berman writes on Harvest Exchange:

Back in November, emerging debt markets were under the gun. In the run-up to the election of Donald Trump as U.S. president, there was a reflation trade that led to an increase in both nominal and real interest rates. Real interest rates typically inflict the most pain and EM debt was hurting. Fast forward six months, however, and the asset class is looking far healthier. Concerns about the Trump administration's "America First" stance and its policies on trade have eased considerably. Indeed, the recent U.S.-China trade deal, despite skepticism over an apparent lack of substance, has greatly reduced the possibility of a mutually destructive trade war between the two nations.

More generally, cyclical indicators in emerging markets have been ticking up since the start of the year and even countries such as Brazil and Russia, which suffered most in 2014 and 2015, are now showing signs of recovery. Current controversy aside, Brazilian President Michel Temer's ambitious reform program, which includes pension and labor changes along with greater foreign investment, is having a positive effect. Growth is improving in Russia, too, albeit slowly. Elsewhere, Argentina, India, Indonesia and Mexico have all seen impressive reforms implemented over the last couple of years......................

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