Brazil’s election is fast becoming a referendum on fiscal credibility. A tightening Lula–Bolsonaro race comes amid investor anxiety over debt sustainability, high rates and the direction of economic policy.

Emerging market (EM) debt remains one of the most diverse and opportunity-rich segments within fixed income. The asset class encompasses both hard currency debt and local currency debt. Both segments offer exposure to emerging economies, but their drivers of return, valuation dynamics and attractiveness differ meaningfully.

No rate change, but plenty to unpack beneath the surface.