Even as the Fed has started hiking rates and U.S. debt dynamics deteriorate, emerging markets show little pressure to follow, thanks to resilient growth, sturdier fiscal positions, and elevated policy rates and bond yields. The weighted average 10-year EM bond yield was nearly 6.45% at the end of September, close to a five-year high, while average inflation-adjusted yields are close to 3%, giving EM central banks room that could allow rate cuts next year. Investors remain tilted toward EM: 33% of investors surveyed by JPMorgan favour EM stocks versus 26% for developed-market equities, and Bank of America's net overweight position in EM stocks eased to 34% from 38% in September. The IMF projects the EM debt-to-GDP ratio at 77.2% this year, rising to 86.2% in five years, below advanced economies' 108.2% and 114.8%, though risks remain for dollar-indebted countries such as Indonesia.
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• NeutralRelevance: low
| Market | Currencies |
|---|---|
| Close on 10/19/2026 | 101.98 |
| Change that session | +0.20% |
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