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CoreMacro | Emerging Markets
Emerging Markets research - including in-depth country reports. Typically published four times a month.
There will be little market and macro implications from the US intervention in Venezuela. Fade away any near-term moves in global oil markets. However, Colombian and Peruvian assets will benefit from lower political risk premiums. We are upgrading Colombian equities and fixed income to overweight versus EM.
Following this weekend's election, we reiterate an overweight stance across Chilean risk assets relative to EM benchmarks and advise buying local currency government bonds (currency unhedged).
We remain bullish on the alpha-generating potential of Vietnamese stocks over the medium and long term. But our negative outlook on global/EM beta makes us bearish on this bourse in absolute terms over the medium term.
Mexican equity and fixed-income markets will continue outperforming their EM counterparts, regardless of whether global risk assets sell off or not. Also, we recommend a new trade: long Mexican stocks / short the S&P 500.
Many key equity indexes have failed to break above major resistance levels, while risky segments have begun to crack. Altogether, this suggests that a major peak in risk assets has probably been made. Short the MSCI EM stock index with a stop loss at 1470.
Indian stocks have further downside in absolute terms as profits disappoint. Their underperformance versus the EM equity benchmark, however, is late, which warrants a shift from underweight to neutral allocation.
We recommend a new relative tech equity trade that will likely produce positive returns over the next six to 12 months, regardless of whether the AI hype continues or reverses.
Brazil’s bleak macro outlook persists – rising debt, weak productivity, and political inertia. With 2026 elections looming, genuine reform seems unlikely, though Argentina’s bold turnaround could pressure Brasília to rethink its cycle of governability over growth.