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What moves the world 2<br />
… valuations continue<br />
the adjustment process<br />
Economic setbacks such as the Asia crisis in the late 1990s are only of a short-term nature and have<br />
no effect on the long-term adjustment process. This investor pattern is also taking place with<br />
bond investments and is reflected in narrowing yield differentials. Hence, the risk premium for EM<br />
government bonds vs. US Treasuries is steadily declining.<br />
Emerging market bond benchmark spread<br />
Index<br />
1800<br />
1500<br />
1200<br />
900<br />
600<br />
300<br />
0<br />
Source: Bloomberg<br />
1998<br />
1999 2000 2001 2002 2003 2004 2005 2006 2007
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