Emerging market credits were volatile in December, although they ended the month with largely unchanged credit spreads. At the beginning of the month, concerns about the Omicron Covid-19 variant led to a sell-off in all risk assets, but markets became more comfortable with this risk in the second half of the month. A hawkish communication from the US Federal Reserve raised fears of rising interest rates, leading to an underperformance of long-dated bonds underperformed long duration and interest rate sensitive bonds.