新兴市场投资策略-新兴市场固定收益年中展望：最糟糕的时期已经过去

James.Lord@morganstanley.comFilip.Denchev@morganstanley.comPascal.Bode@morganstanley.comNeville.Mandimika@morganstanley.comSimon.Waever@morganstanley.comIoana.Zamfir@morganstanley.comGilberto.Hernandez-Gomez@morganstanley.comEmma.Cerda@morganstanley.comMin.Dai@morganstanley.comGek.Teng.Khoo@morganstanley.comMadan.Reddy@morganstanley.comBelle.Chang@morganstanley.comMORGAN STANLEY & CO. INTERNATIONAL PLC+James K LordSTRATEGIST+44 20 7677-3254Filip DenchevSTRATEGIST+44 20 7677-3166Pascal N BodeSTRATEGIST+44 20 7425-3282Neville Z MandimikaSTRATEGIST+44 20 7425-2509MORGAN STANLEY & CO. LLCSimon WaeverSTRATEGIST+1 212 296-8101Ioana ZamfirSTRATEGIST+1 212 761-4012Gilberto A Hernandez-GomezSTRATEGIST+1 212 296-8940Emma C CerdaSTRATEGIST+1 212 761-2344MORGAN STANLEY ASIA LIMITED+Min DaiSTRATEGIST+852 2239-7983Gek Teng KhooSTRATEGIST+852 3963-0303Madan ReddySTRATEGIST+852 2239-1792Belle ChangSTRATEGIST+852 3963-0668EM Fixed Income Mid-Year OutlookEM Fixed Income Mid-Year OutlookThe Worst Is OverMultiple headwinds have hit the asset class but our globalcurrency, bond and spread forecasts suggest the worst is overfor EM fixed income investors. Yet as policy tightening andgrowth shocks should keep volatility high in the near term, it'stoo early to turn outright bullish.FX & EM Strategy: We think that the dollar will peak soon and our 12-monthreturns show EM currency gains. Similarly, with policy restrictive in many marketsand global demand slowing, we think that local currency bond yields will belower over the next 12 months too. Central banks are increasingly shifting tobalance growth and inflation risks.Sovereign Credit Strategy: We expect bonds to recover into the end of the yearwith EMBIG-D spreads ending at 420bp. Yet timing the rebound is extremelydifficult given the multiple headwinds that EM still faces. For now it leaves usneutral as opposed to bearish as in our year ahead outlook, with higher yieldsand low distressed cash prices helping. We already suggest favouring HY over IG.Across both we also identify a basket of ten low dollar price bonds we think willoutperform. Overall, our allocation also skews towards oil exporters overimporters. Key HY longs today include Argentina, Bahrain, the DominicanRepublic, Ecuador, Mozambique, Nigeria, South Africa and Zambia. Within IG, wealso like Abu Dhabi, Chile and Mexico. On the other hand, our dislikes includeCosta Rica, Kenya, Morocco and Turkey, which all should struggle with highercommodity prices. In LatAm, we also dislike Brazil, Peru and Uruguay, while inMENA we dislike Sharjah. The quasi-sovereigns we expect to outperform versustheir sovereigns include PEMEX and ARAMCO, while MUMTAK and OMAOIL lag.LatAm Macro Strategy: We keep a cautious bias in FX while in local rates we waitfor the end of hiking cycles to add front-end receivers but look for relative valuetrades in long-end rates. We add long CAD/MXN and receive 10-year TIIE versuspay 10-year US IRS. We stay short PEN/CLP, long USD/COP and remain pa