EM FI/FX Strategy EEMEA: Four things to watch in the coming week

Research evidence excerpt

EM FI/FX Strategy EEMEA: Four things to watch in the coming week

Global Research

27 July 2026ab

EM FI/FX Strategy Emerging Markets

Emerging MarketsEEMEA: Four things to watch in the coming

week Nimrod Mevorach

Strategist

nimrod.mevorach@ubs.com

+44-20-7567 0779

S. Africa: SARB's decision vol shock; is this a fade? Gyorgy Kovacs

The SARB decision to stay on hold last week caught markets by surprise - coming at odds Economist

with rates markets pricing for a full 25bps hike after headline inflation surprised on the gyorgy.kovacs@ubs.com

+44-20-7568 7563

upside the day before (coming 200bps above target) and against a backdrop of Brent

~100/bbl. Post-meeting price moves were sizable. To put in context, ZAR was down Anna Zadornova

2.1% vs MXN and BRL while the daily selloff in the 5y5y rate (45bps) was the largest Economist

since early Dec 2022 when markets priced in possible resignation of President anna.zadornova@ubs.com

+44-20-7567 4212

Ramaphosa. SARB's inflation-targeting track record suggests to us that last week's

decision does not imply a fundamental change in the central bank's reaction function.

As discussed last week, a rate hike at the 23 Sep meeting is now very likely unless by

then oil and inflation both surprise on the downside and the Fed stays on hold. Rates

look like a better fade than FX, in our view. Our 2y2y receiver bias did not work out; but

rates do look now much more dislocated (around YTD highs), assuming SARB's risk

premium would come down and fiscal dynamics remains favourable as we think. In FX,

risk/reward is not exceptional after USDZAR returned more or less to our FV estimations.

Poland: Jul CPI preview (Fri), PiS party split; stay short PLNHUF

UBS expects Polish CPI rose to 2.9% yoy from 2.5% yoy in Jun. The Bloomberg