EM Sovereign Credit Strategy | Global Rich & Cheap Watch

Research evidence excerpt

EM Sovereign Credit Strategy | Global Rich & Cheap Watch

Update

July 7, 2026 03:00 PM GMT

Morgan Stanley & Co. LLCMEM Sovereign Credit Strategy | Global Simon Waever

Strategist

Rich & Cheap Watch Simon.Waever@morganstanley.comEmma C Cerda +1 212 296-8101

Emma.Cerda@morganstanley.com +1 212 761-2344

EMBIG-D tightened by 3bp to 247bp in the past week (1W). Morgan Stanley & Co. International plc+

Spreads tightened the most in B and tightened the least in BBB Neville Z Mandimika

rating categories. Region-wise, spreads tightened the most in StrategistNeville.Mandimika@morganstanley.com +44 20 7425-2509

Asia and tightened the least in Central & North America. Morgan Stanley India Company Private Limited+

Guru Sharan Agrawal

Country level: The richest countries based on 6m Z-scores across each rating

category are currently Poland, Hungary, South Africa, and Argentina. The cheapest Guru.Sharan.Agrawal@morganstanley.com +91 22 6995-3035

are Qatar, Paraguay, Serbia, and Bahrain. See Exhibit 1.

5s10s spread curves: IG curves flattened by 3bp to 24bp and HY curves flattened

by 4bp to 45bp in the past 1W on aggregate. On an absolute basis, Kenya and Angola

are the steepest, while Qatar and Oman are the flattest. On a 6m Z-score basis, El

Salvador and Uruguay are the steepest, while Saudi Arabia and Turkey are the EM Sovereign Market Composite

flattest. See page 13. Sovereign Ratings and Market Pricing – IG and

BB

10s30s spread curves: IG curves flattened by 1bp to 17bp and HY curves flattened

Sovereign Benchmark Bond Valuations

by 3bp to 33bp in the past 1W on aggregate. On an absolute basis, Egypt and Pemex

Bond 5s10s Curves Snapshot

are the steepest, while Bahrain and Kenya are the flattest. On a 6m Z-score basis,

EUR vs. USD Bonds Snapshot