{"id":208052,"date":"2025-09-30T07:48:44","date_gmt":"2025-09-30T07:48:44","guid":{"rendered":"https:\/\/ibkrcampus.eu\/campus\/?p=208052"},"modified":"2025-09-30T10:40:12","modified_gmt":"2025-09-30T10:40:12","slug":"emerging-market-debt-2","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.eu\/campus\/traders-insight\/securities\/fixed-income\/emerging-market-debt-2\/","title":{"rendered":"Emerging Market Debt Market Commentary: August 2025"},"content":{"rendered":"\n<p>Originally Posted 29 September 2025 &#8211; <a href=\"https:\/\/www.ssga.com\/ie\/en_gb\/institutional\/insights\/emerging-market-debt-commentary-august-2025\">Emerging Market Debt Market Commentary: August 2025<\/a><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>Emerging market (EM) debt began August with the US reciprocal tariffs announced in July going into effect. Tariff developments contributed to country-specific volatility in yields, especially in EM Asia and Latin America (LatAm). In addition to an evolving trade policy narrative, the Trump administration announced additional 25% tariffs on India, citing India\u2019s oil imports from Russia. The additional 40% tariff on Brazil was implemented from 6 August, which was on top of the 10% levy already imposed. Despite such tariff actions, economic growth in Q2 generally topped expectations, especially in EM Asia. A notable development was the US postponing earlier punitive tariffs imposed on China and extending the deadline to reach a trade agreement by another 90 days. Meanwhile, a meeting between Donald Trump and Vladimir Putin in Alaska in mid-August was cited as a vital step towards peace in Ukraine, though the timeline for a Russia-Ukraine ceasefire remained unclear. Elsewhere, heightened tensions were evident as Israel continued to advance plans to take complete control of Gaza.<\/p>\n\n\n\n<p>Overall, EM local currency bonds posted positive returns in August, largely supported by the currency component amid a weaker US dollar. EM hard currency bonds also achieved positive returns in the month, driven by the treasury component and some idiosyncratic developments in the high yield countries. Net flows in the month for hard currency and local currency bonds were +$2.5bn and +$1.5bn, respectively. (Source: JP Morgan). Market expectations of a 25 basis points rate cut by the US Federal Reserve in September triggered a bull steepening of the US Treasury yield curve as near-term rates declined. This placed downward pressure on the US dollar to the benefit of most EM currencies.<\/p>\n\n\n\n<p>Chart of the Month: Markets pricing in lower Fed policy rates <img decoding=\"async\" data-src=\"https:\/\/www.ssga.com\/library-content\/assets\/images\/global\/emd\/2025\/emerging-market-debt-aug25-figure1.png\" width=\"1648\" height=\"1284\" alt=\"Chart of the Month: Markets pricing in lower Fed policy rates \" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" style=\"--smush-placeholder-width: 1648px; aspect-ratio: 1648\/1284;\"><\/p>\n\n\n\n<p>Past performance is not indicative of future results <\/p>\n\n\n\n<p>To learn more about the EMD and broader fixed income capabilities at State Street Investment Management please visit our <a href=\"https:\/\/www.ssga.com\/ie\/en_gb\/capabilities\/fixed-income\">website<\/a>. And to discover more about what drove emerging market debt returns in August, please download the full commentary.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.ssga.com\/ie\/en_gb\/institutional\/library-content\/assets\/pdf\/global\/emd\/2025\/aug-25-emd-monthly-commentary.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Download PDF<\/a><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Emerging market (EM) debt began August with the US reciprocal tariffs announced in July going into effect. Tariff developments contributed to country-specific volatility in yields, especially in EM Asia and Latin America (LatAm). In addition to an evolving trade policy narrative, the Trump administration announced additional 25% tariffs on India, citing India\u2019s oil imports from Russia. The additional 40% tariff on Brazil was implemented from 6 August, which was on top of the 10% levy already imposed. Despite such tariff actions, economic growth in Q2 generally topped expectations, especially in EM Asia. A notable development was the US postponing earlier punitive tariffs imposed on China and extending the deadline to reach a trade agreement by another 90 days. Meanwhile, a meeting between Donald Trump and Vladimir Putin in Alaska in mid-August was cited as a vital step towards peace in Ukraine, though the timeline for a Russia-Ukraine ceasefire remained unclear. Elsewhere, heightened tensions were evident as Israel continued to advance plans to take complete control of Gaza.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":true,"footnotes":""},"categories":[807,14,808,146,148,1],"tags":[661,3776,2673,3777,291],"contributors-categories":[462],"class_list":{"0":"post-208052","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-corporate-bonds","7":"category-fixed-income","8":"category-government-bonds","9":"category-macro","10":"category-text-articles","11":"category-uncategorized","12":"tag-debt","13":"tag-em","14":"tag-emerging-market","15":"tag-emerging-market-debt","16":"tag-macro","17":"contributors-categories-state-street-global-advisors"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Emerging Market Debt Market Commentary: August 2025<\/title>\n<meta name=\"description\" content=\"Emerging market (EM) debt began August with the US reciprocal tariffs announced in July going into effect. 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