Pedestrians walk past an Itau Unibanco Holding SA bank branch in Sao Paulo, Brazil.
Patricia Monteiro/Bloomberg | Bloomberg | Getty Images
Investors have been piling into emerging market bonds as Treasurys’ long-held reputation as a safe haven took a beating following U.S. President Donald Trump’s “reciprocal” tariffs.
Emerging market local currency bond yields slid by 13 basis points between April 2 — when Trump announced the tariffs — and April 25, according to the most recent data provided by JPMorgan. In contrast, the benchmark 10-year Treasury yield rose by more than 7 basis points during the same period.
“We are seeing that pickup into emerging market fixed income assets,” said Brandywine Global Investment Management’s portfolio manager Carol Lye, adding that that Mexico, Brazil and South Africa were some of the countries that could see more demand for their bonds.
As these bonds are priced in the domestic currency, overseas…
