Bond bulls breathe easy on low inflation in emerging markets

Falling commodity prices and stable currencies have kept a lid on developing-nation inflation

Investors nervous about whether the bull case for emerging-market assets can weather a more hawkish US Federal Reserve can take solace in the outlook for consumer prices.

While inflation in developing economies languishes near a record low, prices are starting to tick higher in the developed world, including the US, as wage and other costs rise. This is positive for emerging bonds, with 16 of 21 markets included in the Bloomberg Barclays EM local currency government debt index offering higher yields than the US when adjusted for inflation, according to data compiled by Bloomberg.

Brazil leads the pack, with its 10-year real-denominated