EM sovereign debt might not be doing so great right now. Corporate debt on the other hand…: Emerging-market corporate bonds are holding up against a wave of interest rate hikes around the world, faring better than high-yield debt and equities in the US, Bloomberg reports. The EM sell-off is being kept to a minimum by growing market turmoil in the US on the back of the Fed’s rate hikes and fears of an oncoming recession. This has caused the spread between EM corporate debt and US high-yield bonds to turn from a premium to a discount, and put equities at a three-year high against the S&P 500 index.

Fingers crossed: “The negative market view toward emerging markets will be relatively short-lived,” said one EM debt portfolio manager. “We expect the emerging market-developed market growth differential to widen as the US slips closer to recession.”

We can thank the fast reactions from EM central banks, which seemed to have learned a lesson from 2013: Not only did they act fast in winding down pandemic-era stimulus, most EM central banks have also made sure to stow away some crucial FX for their reserves to help cushion the impact of the intense volatility.

Euro finance chief plays down prospect of eurozone debt crisis 2.0: The head of the group of euro area finance ministers has denied that recent market volatility could trigger a fresh debt crisis in the eurozone, saying that the currency union now has a “stronger architecture” to withstand pressure from the bond markets, according to the Financial Times. This comes a few days after the European Central Bank (ECB) held an emergency meeting to discuss its response to last week’s bond market rout, which pushed borrowing costs in the eurozone’s highly-indebted Mediterranean countries to their highest levels in years. The ECB has signaled that it will begin raising interest rates in July to curb soaring inflation, triggering fresh concerns over debt levels in the euro area.

US markets reopen today after taking the day off yesterday in observance of Juneteenth.

THE CLOSING BELL-

The EGX30 fell 0.5% at yesterday’s close on turnover of EGP 615 mn (26.5% below the 90-day average). Foreign investors were net sellers. The index is down 19.0% YTD.

In the green: Madinet Nasr Housing (+6.2%), Sidi Kerir Petrochem (+1.3%) and TMG Holding (+1.2%).

In the red: Ezz Steel (-4.5%), Cleopatra Hospitals (-3.4%) and Fawry (-2.9%).

Asian markets are largely up in early trading this morning and futures suggest both European and US indices are set to open on a clean green sweep later on today.