Global Emerging Markets Weekly: In summer, plant a hedge

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Global Emerging Markets Weekly: In summer, plant a hedge

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Global Emerging Markets Weekly

In summer, plant a hedge

The View: In summer, plant a hedge 10 July 2026

We don’t want to spoil the joys of a summer of carry, but it is also a good time to put on Emerging Markets Weekly

hedges for an autumn which may bring Fed hikes and midterms volatility. We see higher Global

oil, rates and USD. Keep EM carry but add USD/EM longs in lower-yielding currencies. In

EXD, we still like Argentina and Ukraine and otherwise focus on RV ideas. – D. Hauner Table of Contents

Asia Economics: India - Taking a Rain Check The View 2

We believe a close to normal rainfall condition in July-August can still salvage the year, Asia Economics 4

so it needs to be closely watched. As such, the inflationary impact so far appears muted, Asia Strategy 6

consistent with strong starting points. – R. Bajoria, S. Mehra EEMEA Economics 7

Asia Strategy: Indonesia Bonds – Gauging valuation buffer EEMEA Strategy 9

We believe some risks are priced in as foreign positioning is light and the fiscal push for LatAm Economics 11

growth is well-flagged. Risks are tilted towards higher yields as the external environment LatAm Strategy 13

may remain tough this year Our IndoGB 10y forecast revised to 7.6% for 3Q26 - A.Gupta Sovereign Strategy 15

EEMEA Economics: S. Africa: likely to hike, but close call Credit Risk Premium Model 17 CTA Monitor in EM 18

CPI could rise to 4.7% in June before slowing to 4.2% in July, as lower fuel prices

EMFX CTA Positioning 19

outweigh higher rental and electricity. Inflation expectations rose to 4.4% in 2Q from

3.6%, and across all horizons, raising the risk of more persistent inflation – T. Rusike EM Rates CTA Positioning 20