2 minutes to read by  BlueBay Fixed Income team, A.Kettle, CFA Dec 19, 2025

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 were mixed this week due to ongoing concerns around lofty valuations in certain artificial intelligence (AI)-related stocks. This resulted in the S&P 500 losing -0.6% and the Euro Stoxx 50 losing -0.1%, while Emerging Markets (EM) equities gained +0.3%. The US rates curve bear steepened, with 5-year yields 3 basis points (bps) up and 30-year yields 5bps up. 10-year US real rates were 4bps higher to end the week at +1.89%.

In EM credit markets, spreads were -2bps tighter for both corporates and sovereigns, while total returns were up +0.1% and flat respectively. In the corporate space, the real estate and consumer sectors outperformed, while the industrials and oil & gas sectors underperformed. In the sovereign space, the notable performers were Ukraine, Venezuela, and Mozambique, whereas Senegal, Colombia, and Hungary were the biggest underperformers.

In the EM local markets, returns were flat with foreign exchange (FX) contributing +0.2% and rates -0.2%. In the FX space, outperformers were the Chilean peso, Thai baht, and Romanian leu, while underperformers were the Brazilian real, Indian rupee, and Turkish lira. Meanwhile, in the rates space, Brazil, Dominican Republic, and Uruguay outperformed, while Colombia and Mexico underperformed.

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Disclosure

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