With most global fixed income markets priced for perfection, investors are flocking to the one yield hold-out left: emerging market debt. But are investors really being compensated for the risk?
To the surprise of many, rating agency Standard & Poor’s (S&P) upgraded Portugal to investment-grade status on Monday. This pushed yields on the country’s government bonds down, and interest from international investors is already picking up.
The improving economic outlook in the euro area has prompted the European Central Bank to consider reining in its monetary stimulus. How should investors respond to the prospect of monetary tightening in Europe?