We like emerging market (EM) local debt within an overall bond underweight. Much monetary tightening has been done, and valuations are compelling. U.S. Treasury yields hit new three-year highs last week, and equities fell. We still think stocks can weather the yield rise in the inflationary backdrop. U.S. and euro area data this week may show how the supply shock of the Ukraine war is affecting growth. We expect Europe to be hit harder than the U.S.
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