BNY’s Geoff Yu reports that sovereign bonds from commodity-based EM economies have seen accelerated selling after the Fed decision, despite a weaker Dollar and lower U.S. real yields. Commodity-linked bonds face duration headwinds"Sovereign debt issued by commodity-based EM economies normally benefits from USD-funded trades in a dovish Fed environment, but selling accelerated after the Fed decision. Local investors don’t face FX risk, while limited movement in breakevens keeps real yields attractive. "Even so, the decline in U.S. real yields has been insufficient to generate strong flows into commodity-linked bonds because Treasury curve steepening has offset much of the benefit. The weaker-dollar view is intact, but that doesn’t automatically translate into stronger commodity prices or stronger commodity-linked economies, particularly while U.S. investors remain comfortable with domestic nominal and real yields."