Emerging Markets Debt Monitor – Q2 2026

Emerging markets debt appears to offer a more selective opportunity set as fundamentals and valuations diverge across countries and credit profiles.

Stronger external balances, easing inflation in some regions, and attractive carry may support returns for investors who can tolerate volatility.

At the same time, weaker fiscal positions, refinancing needs, and sensitivity to U.S. rates remain important risks that could pressure lower-quality issuers.

Valuations look compelling in parts of the market, but dispersion is wide, so security selection and country analysis are likely to matter more than broad exposure.