Key takeaways:

• Emerging markets debt is proving more resilient than in past cycles. Stronger policy frameworks, improved fundamentals, and a deeper local investor base are leading to more measured, differentiated responses to external shocks.
• Starting conditions are more favourable, but results are increasingly uneven. Oil prices, domestic policy, and external exposures are driving wider dispersion across countries.
• Opportunities are more selective. In local markets, high real yields and easing inflation support some regions, while others face tighter conditions.

The world is undergoing a series of profound global shifts, a dynamic we have termed to as the Great Global Restructuring.

The first half of 2026 highlights how emerging markets (EM) debt has evolved. Periods of volatility — driven by geopolitics, rising energy prices, and shifting global rate expectations — have tested markets. However, the response has been less uniform than in the past: some markets have adjusted quickly, while others have come under pressure.

This reaction reflects a broader shift. As EM debt has become more integrated into global fixed income portfolios, outcomes are increasingly driven by domestic conditions, not just global factors.

EM debt resilience: a structural shift

Recent experience points to greater resilience than in earlier cycles. While periods of stress still lead to price adjustments, drawdowns have generally been more contained. Recoveries have also been more measured and less synchronised across markets.

Read the full ‘Thought Leadership’ article at the link below