Portfolio Manager Quentin Fitzsimmons discusses his perspective on the current global fixed income environment and what investors could expect to see in 2017.

1. GLOBAL FIXED INCOME
Quentin Fitzsimmons
Portfolio Manager
November 17, 2016
2017 Global Market Outlook Press Briefing

2. 2
Global Fixed Income Outlook: Summary
ENVIRONMENT
 Historically low yields continue to be evident in many international fixed income markets, pointing to divergence away
from the U.S., where policy rates are being very gradually increased. Around the world, political patience with
accommodative monetary policy is wearing thin as economic growth remains low. More generally, investors are
questioning the balance between monetary and fiscal policy and how a greater reliance on the latter may impact fixed
income opportunities. (At the same time, the rebound in the price of oil is causing subdued inflation rates to base and
challenge fixed income valuations for many.)
LOOKING AHEAD
 The interplay between slow but discernible monetary policy tightening in the U.S. and a firm anchoring of Japanese
and core European bond yields suggests significant opportunities to exploit the move in spreads between
international markets as well as the shapes of yield curves.
 Global investors will continue to get rewarded for blending different country cycles together, especially in sovereign
opportunities that may be less familiar in traditional benchmarks. This reflects the value of fundamental research that
tracks improved public debt management and institutional transparency and further reform potential (notably in
Eastern Europe and parts of Asia).
 Credit markets remain supported by central bank balance sheet expansion and purchase programs as well as the
abeyance of the energy market scare. If volatility also remains suppressed in this environment, security selection can
be fruitful.
 The recovery in oil and some other commodity prices has helped to improve the potential for better economic
performance in some developing countries such as Brazil and Mexico. Embedded value is often accessible via the
currency market.

3. 3
Challenges Facing Fixed Income
Investors: The Subzero-Yield Landscape
As of September 30, 2016
Sources: Bloomberg Barclays Global Aggregate Bond Index, Bloomberg Index Services Ltd. Copyright 2016, Bloomberg Index Services Ltd. Used with permission.
T. Rowe Price.
EVOLUTION OF GLOBAL FIXED INCOME MARKETS
GOVERNMENT YIELDS 1YR 2YR 3YR 4YR 5YR 6YR 7YR 8YR 9YR 10YR
Japan
Switzerland Negative Yield
Germany Positive Yield
Sweden
Netherlands
France
Belgium
Spain
Italy
Australia
Canada
UK
U.S.
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
2010 2011 2012 2013 2014 2015
AVERAGE YIELD TO
MATURITY FALLING
0%
5%
10%
15%
20%
25%
30%
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
PROPORTION OF SECURITIES WITH
NEGATIVE YIELD INCREASING
GLOBAL BONDS
GLOBAL BONDS

4. 4
The Global Monetary Policy Experiment Persists…
but Fiscal Expansion Seems More Wish Than Prediction
As of September 30, 2016
Sources: Bloomberg Barclays Global Aggregate Bond Index, Bloomberg Index Services Ltd. Copyright 2016, Bloomberg Index Services Ltd. Used with permission.
T. Rowe Price.
CENTRAL BANK BALANCE SHEET
(U.S.$ BILLION EQUIVALENTS)
STRUCTURAL BUDGET BALANCE
-7
-6
-5
-4
-3
-2
-1
0
1
2
2001 2003 2005 2007 2009 2011 2013 2015 2017
%PotentialGDP
Advanced
Emerging
0
1,000
2,000
3,000
4,000
5,000
6,000
2000 2002 2004 2006 2008 2010 2012 2014
U.S.
Eurozone
Japan
China

5. 5
Different Government Bond Markets
With Different Yield Curves
As of September 30, 2016
Sources: Bloomberg Finance L.P. and T. Rowe Price.
U.S. TREASURY YIELD CURVE JAPAN GOVERNMENT YIELD CURVE
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y15Y20Y25Y30Y
September 30, 2017 (market implied rate)
September 30, 2016
September 30, 2015
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y15Y20Y25Y30Y
September 30, 2017 (market implied rate)
September 30, 2016
September 30, 2015
Further flattening expected. Steep yield curve to remain.

6. 6
Europe: A Big Cloud Forming
on the Horizon?
As of September 30, 2016
Sources: Bloomberg, Bloomberg Barclays Euro Aggregate Corporate Index, Bloomberg Index Services Ltd. Copyright 2016, Bloomberg Index Services Ltd. Used
with permission. T. Rowe Price.
Tapering of
QE Program
European
Elections
UK—
Article 50
EXPECTED IN 2017
-2%
0%
2%
4%
6%
8%
10%
2007 2008 2009 2010 2011 2012 2013 2014 2015
5-Year Germany
Euro Corporate Bonds
5-Year Italy
YIELD TO MATURITY OFFERING
LITTLE PREMIUM

7. 7
Moderate Inflation Continues to Support
Many Bond Markets
As of September 30, 2016
Sources: Bloomberg Finance L.P. and T. Rowe Price.
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Asia
Eastern Europe
EXPECTED INFLATION IN
EASTERN EUROPE AND ASIA
BOND MARKET: LOCAL PERFORMANCE
2016 YEAR TO DATE
IMF
FORECASTS
3.0%
5.7%
5.5%
7.4%
9.4%
5.5%
0% 2% 4% 6% 8% 10%
Poland
Romania
Hungary
Malaysia
Philippines
Thailand

8. 8
Not All Parts of the Bond Markets Will Follow
the Same Pattern in a Rising Rate Environment
As of September 30, 2016
Past performance is not a reliable indicator of future performance.
Sources: Bloomberg Finance L.P. and T. Rowe Price.
MARKET PERFORMANCE WHEN TREASURY
YIELDS ROSE 100 BASIS POINTS OR MORE
12-Months
Ended
U.S. Yield
Move
U.S.
Treasury
Bonds
U.S.
Corporate
Bonds
U.S. Core
Bonds
Emerging
Markets
Corporate
Bonds
Emerging
Markets Hard
Currency
Bonds
U.S. High
Yield Bonds Bank Loans
Dec. 31, 1999 +179 bps -2.6% -2.0% -0.8% – 24.2% 3.4% 3.6%
May 31, 2004 130 -2.6 -0.4 -0.4 3.1 3.1 13.2 7.5
Jun. 30, 2006 120 -1.7 -2.2 -0.8 1.0 4.6 5.1 6.2
Dec. 31, 2009 162 -3.6 18.7 5.9 37.5 28.2 58.9 52.5
Sep. 30, 2013 140 -2.1 -1.6 -1.7 -0.1 -4.3 7.1 5.1
Reference
Index
10-Year
Treasury
Yield Move
Bloomberg
Barclays
U.S.
Treasury
Bond Index
Bloomberg
Barclays
U.S.
Corporate
Investment
Bond Index
Bloomberg
Barclays
U.S.
Aggregate
Bond Index
J.P. Morgan
CEMBI
Broad Index
J.P. Morgan
Emerging
Market Bond
Global Index
J.P. Morgan
Global High
Yield Index
S&P/LSTA
Performing
Loan Index

9. 9
Corporate Bonds: Less About Credit Beta
and More About Credit Alpha
As of September 30, 2016
Sources: Bloomberg Finance L.P. and T. Rowe Price.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
22%
2007 2008 2009 2010 2011 2012 2013 2014 2015
U.S. High Yield
U.S. Investment Grade
Euro Investment Grade
CREDIT YIELDS NEAR THEIR LOWS IMPACT FROM ENERGY PRICES
10
20
30
40
50
60
70
80
90
100
1103.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
2013 2014 2015
U.S. High Yield Premium
Oil Price
Option-AdjustedSpread
U.S.$perBarrel
YieldtoWorst
Yield to worst close to lows. Option-adjusted spread vs. oil prices (inverted).

10. 10
A Preference for European High Yield
and Bank Loans
As of September 30, 2016
Sources: Bloomberg Finance L.P. and T. Rowe Price.
0%
5%
10%
15%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
U.S. High Yield
Euro High Yield
U.S. Loans Only
DEFAULT RATES: HISTORY AND EXPECTED
MOODY’S
BASELINE
FORECASTS

11. 11
Near Term, U.S. Dollar Remains Supported
As of September 30, 2016
Past performance is not a reliable indicator of future performance.
Sources: Bloomberg Finance L.P. and T. Rowe Price.
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
1.45
1.50
2009 2010 2011 2012 2013 2014 2015
INTEREST RATES DIFFERENTIAL FAVORS U.S. DOLLAR
U.S. dollar tends to strengthen vs. euro
when U.S. rates increase vs. German rates
EUR/USD Spot Germany—U.S. 2-Year Yield Differential

12. 12
But Emerging Markets Currencies Are Likely to
Show Further Appreciation in the Medium Term
As of September 30, 2016
Past performance is not a reliable indicator of future performance.
Sources: Haver Analytics and T. Rowe Price.
-2%
-1%
0%
1%
2%
3%
2000 2002 2004 2006 2008 2010 2012 2014
Emerging Markets Average Current
Account Balance (% of GDP)
Four-Quarters Moving Average
IMPROVING CURRENT ACCOUNTS A STRONG APPRECIATION POTENTIAL
BASE 100 = DEC. 31, 2007
20
30
40
50
60
70
80
90
100
110
120
2007 2008 2009 2010 2011 2012 2013 2014 2015
Russian Ruble
Brazil Real
Mexican Peso
Indonesian Rupiah
DEPRECIATION
TREND
RECENT
APPRECIATION

13. 13
Finally, Is Volatility the Next
Risk on the Horizon?
Sources: Bloomberg Barclays, Bloomberg Index Services Ltd. Copyright 2016, Bloomberg Index Services Ltd. Used with permission. J.P. Morgan and T. Rowe
Price. *Merrill Option Volatility Index (MOVE) **CBOE Volatility Index (VIX)
0
10
20
30
40
50
60
70
80
90
2006 2008 2010 2012 2014 2016
IndexLevel
45
70
95
120
145
170
195
220
245
270
2006 2008 2010 2012 2014 2016
IndexLevel
TREASURY BOND YIELD VOLATILITY*
September 30, 2006–September 30, 2016
S&P 500 OPTION VOLATILITY**
September 30, 2006–September 30, 2016
DEUTSCHE BANK CURRENCY VOLATILITY INDEX
September 30, 2006–September 30, 2016
10Y Avg.
91
60
10Y Avg.
21
13
10Y Avg.
10
10
5
10
15
20
25
2006 2008 2010 2012 2014 2016
IndexLevel
FX Volatiltiy IndexFX Volatility Index

14. 14
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The views contained herein are as of November 2016 and may have changed since that time.
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15. THANK YOU.