EM EUR bonds offering an attractive pickup

In Short

EM USD bonds total return has been hit by the increase of long-term US rates while EM EUR bonds have proved to be more resilient since the last summer rally. The recent rapid rise of the long-term US rates is raising the question of the EM USD bonds' attractiveness.


  • Despite the recent rise of US rates, we remain positive EM USD bonds in the long term.
  • That said, for European investors, EM EUR bonds are more attractive. We screened 375 USD/EUR bond pairs across the EM sovereign universe and we found that EM EUR bonds are currently offering one of the largest pickup over EM USD bonds since January 2020.
  • In the IG space, we see value to switch from Romania USD bonds into Romania EUR bonds. Likewise, Kazakhstan, Mexico, and Chile EUR bonds are offering a significant pickup over USD bonds. On the other hand, Saudi Arabia USD bonds are more attractive.
  • In the HY space, valuations are more dispersed and erratic, but we see value to switch into Egypt and Ukraine USD bonds from EUR bonds.

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EM EUR bonds offering an attractive pickup

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