The varied responses of individual countries to global inflationary pressures have contributed to elevated real-rate differentials between developed and emerging markets.

We believe shorter business cycles, elevated volatility, and diminished policy responses warrant a focus on portfolio resilience over reaching for yield.

This year’s surge in yields is restoring value to the bond market, especially with the likelihood of a recession rising, although it remains uncertain when market momentum might turn.

Following strong double-digit profit growth in FY2021, we expect Chinese banks will be less profitable this year as COVID-19 lockdowns continue to disrupt China’s economy.