Goldman sees rate cuts holding rally in EM bonds

Bloomberg

The building blocks for a sustained rally in emerging-market bonds are in place as their central banks embark on a rate-cutting cycle, according to Goldman Sachs Asset Management.
Last month’s easing by South Korea, Indonesia and South Africa is a foretaste of things to come as policy makers step up efforts to bolster growth, said Angus Bell, a senior portfolio manager who helps oversee $45 billion of developing-nation debt.
A dovish Federal Reserve and improved local fundamentals will only embolden EM central banks to push rates lower, he added.
“We continue to like the idea of owning emerging-market local rates,” Bell said in an interview in Singapore before the Fed’s decision to cut US rates. “We now find ourselves almost in perfect alignment where developed-market central banks are easing, EM central banks’ shackles are off. There are still opportunities and I still think there’s more to go.”