LatAm Equity Strategy Treasury Shockwaves: Mapping the Impact on Countries and Sectors

Research evidence excerpt

LatAm Equity Strategy Treasury Shockwaves: Mapping the Impact on Countries and Sectors

J P M O R G A N Latin America Global Markets

Strategy

10 June 2026

LatAm Equity Strategy

Treasury Shockwaves: Mapping the Impact on

Countries and Sectors

Since the start of the year, the 10-year U.S. Treasury yield has rallied about 40 bps, Co-head of Emerging Markets Equity

trading between a low of 3.93% on February 27 and a high of 4.66% on May 19. Strategy and Head of LatAm and

Our Fixed Income strategy team forecasts the 10yr at 4.70% by 26 ye (it was Brazil Strategy

4.50%). In this report we look on how a spike in US yields could impact LatAm Emy Shayo Cherman AC

equities. We examine episodes since 2013 when the 10-year yield rose by more (55-11) 4950-6684

than 50 bps. LatAm is a high beta market and the impact mechanism is fairly emy.shayo@jpmorgan.com

Banco J.P. Morgan S.A.

consistent: a fast rise in US yields tightens financial conditions, strengthens the

Cinthya M Mizuguchi

dollar, raises the discount rate and triggers outflows. Still, there are important

(55-11) 4950-6560

differences in performance when considering whether treasuries are rising due to cinthya.mizuguchi@jpmorgan.com

inflation or higher growth. Counterintuitively, LatAm tends to do better when Banco J.P. Morgan S.A.

Treasuries are rising due to higher inflation. Perhaps, capital flows into the US Diego Celedon

when strong growth is the reason behind a treasury spike. Still, one needs to (56-22) 425-5245

consider that local news also plays an important role. While treasuries rallied in diego.celedon@jpmorgan.com

2022 at the onset of the Russia-Ukraine war, LatAm did realteively OK (especially Inversiones J.P. Morgan Limitada

1H) as it was commodity rich .