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Video: Emerging markets debt outlook for 2019

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      By Michael A. Cirami, CFA, Co-Director of Global Income, Eaton Vance Management

      Boston - Our base case is that 2019 is likely to be a better year than 2018 for emerging market debt. However, we're waiting to see a number of improvements before we really turn optimistic on the asset class.

      The first factor and top challenge for 2019 for emerging market debt continues to be the Federal Reserve. Overall, the market is not pricing in as many hikes as the Fed has been indicating it will deliver in 2019. So there is a bit of a disconnect there that needs to be resolved one way or another.

      (Tap or click the image below to view the video.)

      Blog Image Cirami 19 Outlook Jan 9

      The second is emerging market fundamentals. There are a number of countries that don't seem to be doing the right things to help support their assets and markets. In many cases, they're not putting in the right policies to help improve their potential growth rates. That has made the environment more challenging.

      And the third factor we're looking for is simply cheaper asset prices within emerging market debt.

      I think those three factors weighed on the asset class and certainly contributed to a difficult 2018. However, in 2019, two or even all three of those factors may correct themselves, and we think the outlook will be much better for the asset class.