In the wake of recent revisions to our end-2011 forecasts for developed market (DM) equities and bonds (see our Global Markets Updates, “How much further could the US stock market fall?” and “Prospects for other major developed stock markets”, published earlier this week), we are also revising our end-2011 forecasts for emerging market (EM) equities and dollar-denominated bonds. We are lowering our forecast for the MSCI EM Equity Index to 1,000 (from 1,200) and raising our forecast for the JP Morgan EMBI+ dollar-denominated bond spread over US Treasuries to 325bp from 250bp.
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