EM rates traders see ‘wobbles’ as a result of Fed moves in March

Spreads in emerging markets have proven resilient to Federal Reserve rate moves in March, with ‘wobbles’ but no major impact, however traders have had to tweak trading execution in order to manage those, says Chris Perryman, corporate portfolio manager and head of trading at PineBridge Investments.

Relative to the volatility of March 2020, traders have been focused on fundamentals and spotting any curve anomalies to identify relative value opportunities. Buy-side traders see their role as price taker changing, due to sell-side focus on risk transfer than risk taking, which reduces the length of time momentum affects the market, via volatility and outflows, due to a more stable base of asset holders. As a result investors can take longer term views of EM based on fundamentals he notes.

Published on April 29, 2021

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