BNY’s Geoff Yu: Duration Preferred Over Carry in Latin America After Fed
Geoff Yu of BNY Mellon sees Brazil and Mexico in a more comfortable policy environment following the Fed’s decision, with anchored US front-end yields supporting a preference for duration over carry in emerging markets.
BNY Mellon’s Geoff Yu noted that Latin American markets, particularly Brazil and Mexico, are now operating in a more favorable policy environment after the latest Fed decision. With US front-end yields well-anchored, the backdrop for emerging-market assets has improved.
This shift leads Yu to favor duration exposure over short-term carry strategies in the region. The anchored rate outlook reduces volatility, making longer-dated bonds more attractive relative to rolling short-term carry trades.
The analysis highlights how Fed policy continues to shape opportunities in EM debt and currency markets, with Brazil and Mexico seen as key beneficiaries of the stable US rate environment.
Source: FXStreet Forex News