Emerging Markets Strategy Weekly: One less risk factor, two more to worry about

Research evidence excerpt

Emerging Markets Strategy Weekly: One less risk factor, two more to worry about

Emerging Markets Strategy Weekly

18 June 2026 Citi Research

Figure 24. Trade Ideas – Rationale/Links (Continued)

EM Sovereign Credit

n Long Peru 2050s vs Chile 2050s: EM Credit - 2024 Outlook: Two tales…or two tails

– Risks to the trade: Political escalations in Peru and successful economic reforms in Chile.

n Long Venezuela 2022s: EM Credit Weekly - Defying Gravity

– Risks to the trade: Illiquidity if secondary trading restrictions are imposed, and signals from the current US administration that

indicate elevated conflict and non-compliance.

n Long Mexico 2054s vs Mexico 2034s: Mexico Emerging Markets Strategy - Mexican Elections: Uncharted territory

– Risks to the trade: The announcement of tangible political actions to ensure fiscal consolidation and a smaller-than-expected fiscal

deficit in 2024.

n Long Brazil 2054 vs Paraguay 2048s: EM Credit Weekly - Reluctantly long

– Risks to the trade: A deterioration to Brazil’s primary fiscal balances and Paraguay’s successful implementation of new structural

reforms.

n Long Panama 2050s vs Panama 2035s: EM Credit Weekly - Tuning Out from the Noise

– Risks to the trade include the successful implementation of tax reforms and austerity measures that dissipates downgrade risks.

n Sell Brazil vs Buy Mexico 5yr CDS: Global Emerging Markets Strategy - 2025 Outlook: Trading Amidst Regime Changes

– Risks to the trade: A strengthening of Mexico’s check and balances, and negative fiscal results and deficit commitment from Brazil.

n Long Mozambique 2031s vs Bolivia 2030s: EM Credit - 2025 Outlook: Walking the tight rope

– Risks to the trade: Escalation of protests or full annulment of the election in results in Mozambique, or strengthening of the fiscal