2 minutes to read by  BlueBay Fixed Income team, A.Kettle, CFA Jan 12, 2026

Senior Portfolio Manager Anthony Kettle’s weekly BlueBay Emerging Market Debt commentary offers readers a concise yet wide-ranging macro overview. Kettle covers markets large and small, providing insight on how financial, political, and economic developments in one region affect markets elsewhere. Here is his latest insight.

Summary

Risk markets ended the year with a whimper as the S&P 500 lost -1.2%, although the Euro Stoxx 50 and emerging markets (EM) equities both gained +0.8% and +0.9%, respectively. The US rates curve bear steepened with 5-year yields up by 1 basis point (bp) and 30-year yields up 5bps. Meanwhile, 10-year US real rates were 2bps higher to end the week at 1.90%.

In EM credit markets, spreads were -6bps tighter for corporates and -3bps tighter for sovereigns, while total returns were up +0.1% and +0.2%, respectively. In the corporate space, the infrastructure and industrials sectors outperformed, while the pulp & paper and oil & gas sectors underperformed. In the sovereign space, the notable performers were Senegal and Bolivia. The biggest underperformers were Ukraine, Colombia, and Peru.

In the EM local markets, returns were up +0.1% with foreign exchange (FX) contributing -0.1% and rates +0.1%. In the FX space, the outperformers were the Hungarian forint and Brazilian real, up +0.9% each, while the Colombian peso and Thai baht detracted, down -2.0% and -1.2%, respectively. In the rates space, Turkey and South Africa outperformed with gains of +2.1% and +1.1% respectively, and Colombia underperformed with a loss of -3.4%.

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Disclosure

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