Potential US default threatens EM investor confidence

Asia’s credit markets are at risk of losing their recently gained bond investor inflow momentum as fears of a potential US default mount.

Potential US default threatens EM investor confidence

Emerging market funds returned with a bang in September but such impetus is unlikely to continue into October as the ongoing US debt ceiling debate and fears of a default could take a toll on market sentiment, potentially prompting investor outflows.

Following inflows of $560 million into emerging markets for the week of September 23, investors withdrew a net $240 million from bond funds last week, according to EPFR data. Outflows were primarily led by...

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