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  Emerging Market Local Currency Review - 4th Quarter 2016
Posted Under: Emerging Markets

The surprise U.S. presidential election result turned sentiment sharply negative towards emerging market assets over the quarter ended December 31, 2016. The headline rhetoric was negative for trade, negative for the outlook on U.S. interest rates and negative for the foreign policy relations between the United States and a number of emerging market countries. This together with higher yields on U.S. Treasury securities led to heightened volatility for emerging markets over the quarter.

The most widely followed emerging market local currency benchmark, the JP Morgan GBI-EM Global Diversified index returned -6.09% for the 4th quarter but ended the full year 2016 with a respectable return of 9.94%. Notably U.S. treasury yield rose substantially over the quarter; the yield on 5-yr maturity U.S. Treasury bonds rose 78 basis points (bps) to 1.93%. Yields for the JP Morgan GBI-EM Global Diversified Index rose 61 bps to 6.79% over the same period.

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Posted on Tuesday, January 31, 2017 @ 10:32 AM • Post Link Share: 
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These posts were prepared by First Trust Advisors L. P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
 PREVIOUS POSTS
Fourth Quarter 2016 CEF Review
Alternatives Update 4th Quarter 2016
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Money Market Reform and the Opportunity for Enhanced Cash ETFs
Municipal Update 3rd Quarter 2016
Third Quarter 2016 CEF Review
Emerging Market Local Currency Review - 3rd Quarter 2016
Senior Loan & High Yield Quarterly Review - 3rd Quarter 2016
Alternatives Update 3rd Quarter 2016
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