--- title: Off times for Emerging Market Sovereign Bonds | Syz Group description: Instability in EMs means sovereign bonds are subject to pain in the short term. image: https://blog.syzgroup.com/hubfs/Imported_Blog_Media/adobestock_217065264.jpeg --- [![Syz Private banking](https://blog.syzgroup.com/hs-fs/hubfs/Logo.png?width=140&name=Logo.png "Syz Private banking")](https://www.syzgroup.com/fr) ## **Thinking** out loud [Subscribe](https://25733253.hs-sites-eu1.com/newsletter-signup?hsLang=en) [![Contact Us](https://hubspot-no-cache-eu1-prod.s3.amazonaws.com/cta/default/25733253/3d762f49-4e71-4f99-97b1-bf6781ef3da2.png)](https://hubspot-cta-redirect-eu1-prod.s3.amazonaws.com/cta/redirect/25733253/3d762f49-4e71-4f99-97b1-bf6781ef3da2) - [OUR SERVICES](https://www.syzgroup.com/en/private-banking) - [ABOUT SYZ](https://www.syzgroup.com/en/about/welcome-to-syz) - [CAREERS](https://www.syzgroup.com/en/careers) - [PRESS](https://www.syzgroup.com/en/news) - [Blog Homepage](https://blog.syzgroup.com) - [Slow Food for Thought](https://blog.syzgroup.com/slow-food-for-thought) - [Focus](https://blog.syzgroup.com/slow-food-for-thoughts/tag/focus) - [Asset allocations Insights](https://blog.syzgroup.com/slow-food-for-thoughts/tag/asset-allocation-insights) - [Market Outlook](https://blog.syzgroup.com/slow-food-for-thoughts/tag/market-outlook) - [Swiss Perspectives](https://blog.syzgroup.com/slow-food-for-thoughts/tag/swiss-perspectives) - [Syz the moment](https://blog.syzgroup.com/syz-the-moment) - [Crypto corner](https://blog.syzgroup.com/crypto-corner) - [Syz AI Insights](https://blog.syzgroup.com/syz-ai-insights) - [Fast Food for Thought](https://blog.syzgroup.com/fast-food-for-thought) - [The week in seven charts](https://blog.syzgroup.com/fast-food-for-thoughts/tag/the-week-in-seven-charts) - [Flash](https://blog.syzgroup.com/fast-food-for-thoughts/tag/flash) - [Fixed Income Weekly](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-fixed-income) - [Equity Weekly](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-equities) - [Global markets outlook](https://blog.syzgroup.com/fast-food-for-thoughts/tag/global-markets-outlook) - [CONTACT](https://www.syzgroup.com/en/contact-us/form) - [ENGLISH](https://www.syzgroup.com/) - [FRANÇAIS](https://www.syzgroup.com/fr) - [Slow Food for Thought](https://blog.syzgroup.com/slow-food-for-thought) - [Focus](https://blog.syzgroup.com/slow-food-for-thoughts/tag/focus) - [Asset allocations Insights](https://blog.syzgroup.com/slow-food-for-thoughts/tag/asset-allocation-insights) - [Market Outlook](https://blog.syzgroup.com/slow-food-for-thoughts/tag/market-outlook) - [Swiss Perspectives](https://blog.syzgroup.com/slow-food-for-thoughts/tag/swiss-perspectives) - [Fast Food for Thought](https://blog.syzgroup.com/fast-food-for-thought) - [Flash](https://blog.syzgroup.com/fast-food-for-thoughts/tag/flash) - [Weekly Fixed Income](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-fixed-income) - [The week in seven charts](https://blog.syzgroup.com/slow-food-for-thoughts/tag/the-week-in-seven-charts) - [Global markets outlook](https://blog.syzgroup.com/fast-food-for-thoughts/tag/global-markets-outlook) - [Weekly Equities](https://blog.syzgroup.com/fast-food-for-thought/tag/weekly-equities) - [Syz the moment](https://blog.syzgroup.com/syz-the-moment) - [Crypto corner](https://blog.syzgroup.com/crypto-corner) - [Syz AI Insights](https://blog.syzgroup.com/syz-ai-insights) - [Our Services](https://www.syzgroup.com/en/private-banking) - [About Syz](https://www.syzgroup.com/en/about/welcome-to-syz) - [Careers](https://www.syzgroup.com/en/careers) - [Press](https://www.syzgroup.com/en/news) - [Contact](https://www.syzgroup.com/en/contact-us/form) - [English](https://www.syzgroup.com/) - [Français](https://www.syzgroup.com/fr) ## **Sign-up** for our newsletter This website uses cookies to enhance user navigation and to collect statistical data. You can change your settings below to refuse the use of cookies. For more information, please refer to the [Cookies policy](https://www.syzgroup.com/en/legal-notices). Mandatory cookies Functional cookies Statistics & marketing I confirm I am not a US citizen residing in the US I confirm I am not accessing this site from the US I confirm that I am not a resident of Canada (except for Ontario, Quebec, British Columbia or Alberta). Agree and confirm ### Restricted access We are sorry that for legal reasons we are not able to help US citizens or Canadian residents other than in Ontario, Quebec, or Alberta. Best wishes for the future… ### Restricted access We are sorry that for legal reasons we are not able to help US citizens or Canadian residents other than in Ontario, Quebec, or Alberta. Best wishes for the future… You chose the following profile. If you made a mistake, please change here USA Country Switzerland Canada: Other than Ontario, Quebec, Alberta Canada: Ontario, Quebec or Alberta USA Other country Language Language English French German Italian I confirm Legal information This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document. [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) ### Off times for Emerging Market Sovereign Bonds Instability in EMs means sovereign bonds are subject to pain in the short term. [![Gaël Fichan](https://blog.syzgroup.com/hubfs/gael.jpg)](https://blog.syzgroup.com/slow-food-for-thought/author/gaël-fichan) [**Gaël Fichan**](https://blog.syzgroup.com/slow-food-for-thought/author/gaël-fichan) Head Fixed Income & Senior Portfolio Manager **Thursday, 01/20/2022** | Reading time: 1min. - ![Pdf](https://blog.syzgroup.com/hubfs/pdf%20(1).png) - - - - [--- **PDF** ---](https://www.syzgroup.com/sites/default/files/document/2022-01/flash_01.2022_en_2_1.pdf) ## A bad start for debt Emerging market (EM) sovereign and corporate bonds (hard currency) are off to the worst start in their history, with a performance of close to -4%. This added pressure to the already poor performance of 2021: since January 1, 2021, emerging market sovereign bonds have lost about 7%.     First two weeks of performance each year [![First two weeks of performance each year](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02-1.png)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02.png?hsLang=en) Source: Bloomberg   This performance is in part due to rising US interest rates. In fact, the US intermediate yield curve (7-10 years) has lost more than 3% since the beginning of the year.   Since the beginning of 2021, the US Treasury 7-year rose more than by 120 bps [![Since the beginning of 2021, the US Treasury 7-year rose more than by 120 bps](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02_2-1.png)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02_2.png?hsLang=en) Source: Bloomberg   Furthermore, some idiosyncratic risks are also weighing on performance. Tensions between Russia and Ukraine have hit their bonds, with an average performance of -7.5% since the beginning of the year.   Russia CDS 5-Year (in BPS) [![Russia CDS 5-Year (in BPS)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02_3.png)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02_3-1.png?hsLang=en) Source: Bloomberg   In Argentina, bonds, which are among the worst performers since the beginning of the year, lost nearly 10% due to difficulties in reaching an agreement with the IMF on debt restructuring. In Mexico, bonds were hit by a loss of more than 3% from a new supply (an amount of $6 billion) that gave an attractive premium.     Largest underperformers of 2022 so far - Total Return (%) [![Largest underperformers of 2022 so far - Total Return (%)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02_4-1.png)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p02_4.png?hsLang=en) Source: Bloomberg ## The house’s take on things In general, we are less negative on EM debt, which is justified by rising commodity prices, more attractive valuations and the fact that the monetary policy tightening cycle is already well underway in Emerging Markets. We also prefer corporate bonds to sovereign bonds, as the latter are more sensitive to rising US interest rates (and a stronger US dollar).   The sensitivity (duration) to a rise in U.S. interest rates is almost at its widest between the emerging market sovereign and corporate bond indices. [![The sensitivity (duration) to a rise in U.S. interest rates is almost at its widest between the emerging market sovereign and corporate bond indices.](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p03.png)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p03-1.png?hsLang=en) Source: Bloomberg   On a negative note, geopolitical tensions are rising (e.g. Russia/Ukraine), which will continue to affect the performance of emerging market sovereign bonds. The Brazilian elections will also continue to put pressure on Brazilian bonds until the end of the year. In addition, the average yield to maturity of the USD emerging market sovereign bond index is still below its historical average (5.2% vs. 6%). See the following graphs:   Yield by duration unit [![Yield by duration unit](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p03_2.png)](https://blog.syzgroup.com/hubfs/Imported_Blog_Media/p03_2-1.png?hsLang=en) Source: Bloomberg ## Conclusion Overall, the entry point is much better than a year ago, but emerging market sovereign bonds could suffer again in the short term. We therefore recommend waiting for more stability before investing in cash bonds. We would also favor to invest now only via option strategies.     #### Disclaimer This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document. Read More ## Related Articles [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) #### [AI: bubble, super-cycle, or both?](https://blog.syzgroup.com/slow-food-for-thought/ai-bubble-super-cycle-or-both?hsLang=en) Why the hyperscalers’ spending spree and circular AI financing deserve scrutiny, why the AI boom may still have years to run, and where the best investment opportunities may lie. **[Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/author/charles-henry-monchau?hsLang=en)** | 16/10/2026 [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) #### [Anthropic Q3: spectacular numbers, harder questions](https://blog.syzgroup.com/slow-food-for-thought/anthropic-q3-spectacular-numbers-harder-questions?hsLang=en) Anthropic told investors at its third-quarter results briefing that revenue reached $16.8bn, up 46% from $11.5bn in the second quarter, and that it was profitable on an adjusted basis and cash-flow positive for the second quarter running. **[Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/author/charles-henry-monchau?hsLang=en)** | 15/10/2026 [Focus](https://blog.syzgroup.com/slow-food-for-thought/tag/focus) #### [The market that never sleeps](https://blog.syzgroup.com/slow-food-for-thought/the-market-that-never-sleeps?hsLang=en) Wall Street closes at 4 p.m., but a growing share of trade now carries on through the night. Welcome to the world of tokenised assets. **[Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/author/charles-henry-monchau?hsLang=en)** | 13/10/2026 ## Straight from the Desk # Syz the moment Live feeds, charts, breaking stories, all day long. [Discover more](https://blog.syzgroup.com/syz-the-moment?hsLang=en) ## **Thinking** out loud Sign up for our weekly email highlighting the most popular posts. Follow us ## **Thinking** out loud - - - - ## **Investing** with intelligence Our latest research, commentary and market outlooks #### [Weekly Market Update](https://blog.syzgroup.com/fast-food-for-thoughts/tag/weekly-market-update?hsLang=en) #### [Focus](https://blog.syzgroup.com/slow-food-for-thoughts/tag/focus?hsLang=en) #### [Asset Allocation Insights](https://blog.syzgroup.com/slow-food-for-thoughts/tag/asset-allocation-insights?hsLang=en) #### [Semi-annual Outlook](https://blog.syzgroup.com/slow-food-for-thoughts/tag/semi-annual-outlook?hsLang=en) - [Contact](https://www.syzgroup.com/en/contact-us/form) - [Terms & conditions](https://www.syzgroup.com/sites/default/files/document/2021-12/001-2_en-general_terms_and_conditions_w.pdf) - [Data protection notice](https://www.syzgroup.com/en/data-protection-notice) - [Cookies policy](https://www.syzgroup.com/en/legal-notices) - [Syzgroup.com](https://www.syzgroup.com/) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Gaël Fichan", "url" : "https://blog.syzgroup.com/slow-food-for-thought/author/gaël-fichan" }, "dateModified" : "2022-10-19T08:41:18.314Z", "datePublished" : "2022-01-20T05:00:00.000Z", "headline" : "Off times for Emerging Market Sovereign Bonds | Syz Group", "image" : [ "https://blog.syzgroup.com/hubfs/Imported_Blog_Media/adobestock_217065264.jpeg" ], "mainEntityOfPage" : { "@id" : "https://blog.syzgroup.com/slow-food-for-thought/en/insights/times-emerging-market-sovereign-bonds", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.syzgroup.com/hubfs/Logo%20(1).png" }, "name" : "Syz Group" } } ```