Srinivasan Sivabalan

Global investors are favoring junk-rated bonds over investment-grade debt in emerging markets by the widest margin in eight years, as the winding down of the Iran war revives the hunt for yield.

The Iran war has changed how global investors view the Middle East, with geopolitical resilience now outweighing economic growth as a draw for funds.

(Bloomberg) -- For the first time in four years, companies in emerging markets are beating profit estimates, giving investors a fresh reason to believe the bull market is just getting started.

Citigroup Inc. will open a representative office in the Baltics to better facilitate defense-related financing on NATO’s eastern frontier, where nations are ramping up military outlays in response to Russian threats.

Israel’s stocks and currency have turned to the world’s worst performers this month on concern that a peace agreement with Iran will leave Israel in a weakened position with respect to both its biggest enemies and allies.

Hungary’s bonds have rallied so much that yields are approaching those in the UK, the latest sign that investors are backing the new government’s plans to fix the economy and join the euro region.

A 400% rally in Lebanon’s defaulted bonds is fading as investors confront the prospect of debt restructuring delays and far lower recovery rates than they had expected.

Emerging-market bonds’ outperformance over Treasuries is attracting growing numbers of investors looking to capitalize on the compelling carry-trade returns in the sector.

Bond investors are demanding the most compensation since October 2022 to fund Middle Eastern governments as fighting flares again between the US and Iran.

Borrowers from the United Arab Emirates are tapping global bond markets at a record pace as the Middle East conflict rages, with sales up a third so far in 2026 versus year-ago levels.