OK, that is
probably stretching it a bit, but it looks like the carry trade has returned to
us for a while in the Emerging Market government bond markets. But the question
is for how long.
As I have already
mentioned in the first blog post, the Emerging Market countries that suffered
the most in 2013 were the “fragile five”. The five countries – Turkey, Brazil,
India, South Africa and Indonesia – were running large current account deficits
and when investors pulled money out of Emerging Market last year, the fragile
five were hit the hardest.
