Emerging Markets Fixed Income Commentary

In May, Emerging Markets high yield regained ground on IG, due in part to a back-up in U.S. treasury yields. Resilient U.S. economic data and growing expectations of a delay in the Fed’s easing cycle pushed treasury yields higher, leading to losses in the treasury component of EM credit (-1.2%). Positive excess returns from high yield spread tightening offset half of the treasury losses.