Stars Align for a Rally in Emerging-Market Debt

The video discusses the performance of local currency emerging markets debt, which has underperformed compared to dollar-denominated debt and high yield. Despite this, investors are showing renewed interest, as evidenced by significant inflows into local currency debt funds. The video also explores market indicators, such as the index tracking this debt nearing record highs, and factors that could influence a rally, including Federal Reserve policies and global economic data. A dovish Fed and a weaker dollar could support the debt, while a hawkish Fed or stronger dollar could disrupt it.

How does the performance of dollar-denominated emerging markets debt compare to local currency debt?

What could happen if the Fed becomes more hawkish or if economic data is better than expected?