Morgan Stanley Global Macro Forum: Markets On the Move: Signal or Noise?

Research evidence excerpt

Morgan Stanley Global Macro Forum: Markets On the Move: Signal or Noise?

Valuation Methodology and Risks

Stance/Trade Date Entry Level Target Stop Rationale Risks

We recommend selling Nigeria 5y CDS protection at 257bp, targeting 220bp. Cash bonds have already

rallied to near one-year tights, but CDS has lagged, leaving the basis unusually wide. Continued reserve Sell Nigeria 5y CDS 20-Jul-26 257.0 220.0 277.0 Reintroduction of fuel subsidies and FX related capital controls. accumulation and higher oil prices should support further improvement in Nigeria's external position,

driving CDS tighter.

We recommend buying Ghana 2035s versus Zambia 2033s, targeting -10bp from 29bp with a 45bp Lower gold prices and a significantly harsher hit to the cocoa Buy GHANA 2035 versus ZAMBIN 2033 20-Jul-26 29.0 -10.0 45.0 stop. Ghana benefits from stronger fiscal and reserve trends, while Zambia faces election-related sector. spending, El Niño risks, hydropower constraints and weaker external buffers.

Costa Rica has been one of the strongest-performing LatAm BB importers, helped by stronger buffers

and optimism around the new administration, but we think the market is now underpricing fiscal risks. A new fiscal framework created by the administraton with a Dislike Costa Rica Hard Currency Bonds 15-May-26 NA NA NA The latest fiscal framework points to a materially weaker debt trajectory. Spreads are pricing 1.5 credible fiscal consolidation path.

upgrades and leave little room for disappointment.

Nigeria has cheapened modestly relative to peers since the start of the year. We think the current

Like Nigeria Hard Currency Bonds 20-Jan-26 NA NA NA account is in a much stronger position to absorb any downside shock, while fiscal metrics remain A much sharper move lower in oil prices.