Emerging perspectives

Emerging Market Debt Indicator April 2021

Our Latin America specialist Nicolas Jaquier summarises likely scenarios ahead of Peru’s gripping presidential election. We also highlight recent regional developments and provide an updated outlook across the EM debt universe.

May 13, 2021

20 minutes

Our Latin America specialist Nicolas Jaquier summarises likely scenarios ahead of Peru’s gripping presidential election. We also highlight recent regional developments and provide an updated outlook across the EM debt universe.

This edition includes:

  • Market review
  • Top-down views and outlook
  • Insights from the team
    • Peru’s run-off presidential election – policies and possibilities.
      Our latest views on potential scenarios that await in the upcoming election.
      What are the market implications should Castillo or Keiko win?
  • Regional highlights
    • Our EM Fixed Income team summarises April’s market developments across the EM sovereign debt universe.

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The fast view

Market Background

  • The JP Morgan GBI-EM Global Diversified Unhedged Index produced a total return of 2.3% in US dollar terms, while the JP Morgan EM Bond Index returned 2.2%.
  • Sentiment improved during the month helped by strong economic data in the US on retail sales and employment and a sharp rise in US and European consumer confidence.


  • In Egypt, FX reserves recovered to US$40.3 billion as continuing portfolio flows and strong remittances helped offset the impact of lower tourism revenue.
  • In Zambia, April’s PMI rose above 50 for the first time in 2 years, reflecting new orders and rising business confidence.


  • The region continued to benefit from the global demand for goods and the concurrent shortage in semiconductors, themes in play since the beginning of the year.
  • More negatively, there has been a surge in COVID-19 cases, particularly in India, the Philippines, Thailand and Malaysia.

Latin America

  • This region is battling a surge in COVID-19, with cases increasing in Colombia and Argentina. Despite impressive vaccination rates, Chile’s infection rate remains high.
  • In Ecuador, market friendly candidate Guillermo Lasso won the presidential election, which helped hard currency bonds rebound strongly over the month.


  • Regional sentiment improved as a result of more encouraging business and consumer data.
  • Retail sales are also recovering as the high levels of household savings built up during the pandemic are filtering through to consumer purchases.

Rest of EMEA

  • In Turkey, pressure on President Recep Tayyip Erdogan has increased following news that the central bank has burned through US$165 billion of reserves in two years.
  • The vaccine rollout across EMEA, particularly in South Africa and Russia, continues to underperform the rest of the world.


Authored by

EMD Team

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