Global Rate Bets Offer EM Investors Refuge From Trump Shock
Some interest rates swaps in Brazil and Chile notched their biggest weekly drops since 2022.
Photographer: Tuane Fernandes/BloombergThis article is for subscribers only.
Bets on falling global interest rates are creating a profitable opportunity for emerging-market investors seeking shelter from the volatility sparked by President Donald Trump’s trade war.
The strategy involves targeting the local-currency bonds of developing countries where yields are high and central banks have plenty of room to ease monetary policy in a prolonged global trade war. It can also be expressed through so-called receivers — wagers that interest-rate swaps will fall.