Emerging-market 10-year yields fall below developed markets on debt-weighted basis, Homrich & Berg says
TLT•Debt-weighted emerging-market 10-year sovereign yields were 4.47%, below developed-market yields of 4.58%, an 11-basis-point inversion, an October 21 analysis found.
1. Yield comparison
Debt-weighted emerging-market 10-year sovereign yields fell below developed-market yields for the first time on record, the analysis found. Emerging-market yields stood at 4.47%, compared with 4.58% for developed markets.
2. Debt and term premiums
Among the developed markets tracked, 13 of 20 had 10-year yields near decade highs; none of the emerging markets reached that threshold. Government debt totaled 108% of GDP in developed markets, compared with 74% in emerging markets. Rising term premiums accounted for about one-third of the increase in U.S. yields over the past year, reflecting higher long-term borrowing risks.
