 Tightening financial conditions continue to dominate a myriad of risks facing EM credit, but a commodity price uplift continues to be the saving grace for many countries, with 60% of net commodity exporters in the EMBIGD.

 We have incrementally dialed back some of our oil exposures, but we continue to see the commodity price backdrop as a mitigating factor cushioning a large share of the asset class, particularly in reducing default risks for exporters.

 Repayment capacity for EM sovereigns is back in the fore as refinancing conditions become more prohibitive. The interest bill remains sticky, while for countries with domestic financing sources, the constraint remains the high and rising cost of debt. We carried out a deep-dive analysis in our recent report, EM Sovereign External Repayment Risks. All told, the EM sovereign HY default rate this year could reach 10%.