EM Risk Premium Narrows Most Since 2022 as Trade War Abates

The risk premium on emerging-market debt narrowed by the most since November 2022, data from JPMorgan Chase & Co showed, as investors recalibrated their portfolios following a pause in the US-China trade war.

The extra yield money managers demand to own EM sovereign dollar bonds rather than US Treasuries narrowed by 16 basis points on Monday, the data showed. That was due to a combination of an 11 basis-point increase in US government yields and a 5 basis-point reduction in EM yields.

The spread declined after the US and China announced a 90-day pause on tariffs imposed on each ...