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Morgan Stanley bets on emerging market debt as JPM says rally unsustainable

The latest inflation data from the US spurred a risk rally as traders reduced Federal Reserve tightening wagers

Morgan Stanley
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Morgan Stanley | Photo: Bloomberg

Maria Elena Vizcaino | Bloomberg
While JPMorgan Chase & Co. is urging investors to use an “unsustainable” rally in emerging-market bonds to ditch debt from some of the riskiest corners of the world, Morgan Stanley is recommending they pile up on it. 

A lower-than-expected US inflation reading released Wednesday should support developing-nation bonds, Morgan Stanley strategists led by Simon Waever wrote in a note, turning bullish on sovereign credit for the first time since November 2020. Just a day before, JPMorgan strategists led by Trang Nguyen said the recent rebound in the asset class won’t last long, suggesting clients dump less liquid names at opportunistic