GEMs in the week: How far can rates follow oil?

Research evidence excerpt

GEMs in the week: How far can rates follow oil?

26 June 2026

GEMs in the week Multi-AssetEmerging Markets

How far can rates follow oil?

◆ Lower oil prices are unwinding part of the conflict-driven Ali Cakiroglu

hawkish repricing of monetary policy across EM… Emerging Markets Strategist

HSBC Bank plc

alicakiroglu@hsbc.com

◆ …but some markets have adjusted much further than others +44 20 7991 0547

◆ Our residual analysis suggests that Brazil and South Africa EdwardEmergingParker,MarketsCFAStrategist

retain the most room for rate expectations to decline HSBC Bank plc edward.parker@hsbc.com

+44 20 3359 7563

Beyond the oil move Ramya R S

Risk assets, emerging markets (EM) included, have been under pressure this week, as Emerging Markets Strategist HSBC Bank Middle East Limited, DIFC

investors digested the outcome of last week’s FOMC meeting under new Fed Chair ramya.r.s@hsbc.com

+ 971 4 509 3351

Kevin Warsh (FOMC Multi-Asset Reaction, 17 June 2026). The Fed unveiled a shorter

Rohit Mehboobani*

statement and offered less forward guidance, prompting our FX Strategy team to Associate

revise their US dollar forecasts (FX forecast update, 18 June 2026). Moreover, Bangalore

growing concerns around the outlook for the technology sectors have further

complicated the backdrop, contributing to steep declines in equity markets. * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

That said, it has not all been bad news. Oil prices continued to retreat from their

recent peak, briefly returning to pre-conflict levels of around USD70/b (c20% below

end-May) before edging higher on renewed disruption concerns in the Strait of

Hormuz (Bloomberg, 25 June 2026). The decline matters because the earlier oil