IMF Warns One of Most Crowded Bond Trades Near Tipping Point
- Tighter policy to sap funding pool for emerging nations
- Half of total external debt stock of EM issuers due by 2022
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It’s one of the most crowded trades for good reason. But dizzying returns and a surge of inflows have put emerging markets on a narrow precipice.
After several false starts, economists are predicting next year will finally be the one in which borrowing costs get a significant leg-up. The International Monetary Fund is warning it could mark the tipping point for emerging-market bond funds sitting on the biggest annual inflows since the financial crisis.