Insights
EV_Agency MBS and Housing Market Monitor Q4 2023

Technicals Tailwind Expected for Emerging Markets Debt in 2024

KEY POINTS
1. Many emerging markets (EM) central banks were early and more aggressive in tightening policy than their developed market peers, which is helping to tame inflation and opening the way for more growth-friendly policy.
2. We expect net inflows to rebound into EM debt in 2024, providing a technicals tailwind for the asset class.
3. The asset class remains susceptible to macro sensitivity, which places an added emphasis on in-depth country and company research to guide judicious credit selection.

Market Decoupling of "E, S and G" Factors Likely to Accelerate in 2024

KEY POINTS
1.  The shakeout in the responsible investment industry that began in late 2022 is driving specialist firms to increasingly incorporate financial viability into the analysis of corporate climate and social business objectives.
2.  As both specialist firms and mainstream investors have moved towards more intensive and granular ESG research, a consensus is building around the importance of human capital management. In particular, a greater focus is being placed on workforce diversity in differentiating a company's potential for value creation.
3.  Decarbonizing the global economy is proving to be a difficult task because the cost of transitioning from fossil fuels to clean energy is currently higher than originally anticipated.