"We are going to see another big round of rate cuts in emerging markets, especially from many of the big players. So for the local currency bond market it looks like a constructive environment," said Didier Duret, chief investment officer at US$4.5 billion-asset ABN AMRO. So provided emerging currencies don't buckle, local bonds should extend their bull run, having already returned 17% this year. But local debt funds have received only around US$10 billion this year, a quarter of what has flowed to hard currency bonds, JP Morgan data shows. Possibly that's why, authorities — except in Turkey — have moved cautiously, fearing aggressive rate cuts will leave currencies vulnerable should the global backdrop sour.

Source: The Edge Markets October 07, 2016 11:26 UTC