Emerging Markets Global EM Weekly Tactically trading a higher for longer global rates environment

EMERGING MARKETS 11 September 2026

EM Weekly Extract from a report

Global EM Weekly Tactically trading a higher-for-longer global rates environment Phoenix Kalen Highlights  Trade updates. Kiyong Seong o Initiating KRW 1y1y receiver position (rationale in Asia Strategy Updates) o Initiating TWD NDIRS 5y receiver position (rationale in Asia Strategy Updates) Marek Drimal o Closing Short EUR/RON position o Stopping out Short EUR/INR 3m NDF position

Gergely Urmossy  ASIA. China FX and rates are likely to remain sluggish. Although SG pencils in a 12.5bp hike to 2.125% at the 17 September CBC meeting in Taiwan, we expect profit-taking in paid TWD NDIRS Galvin Chia positions to prevail. We favour scaling into a TWD 5y NDIRS receiver. Korean rates have also reached attractive levels to fade the sell-off, and we favour receiving KRW1y1y tactically. In Indonesia, investors are likely shifting into IndoGBs and taking off FX hedges. Oil prices have Brendan McKenna pressured India’s FX weaker, and 2y NDOIS looks cheap. SGD still has momentum behind it.

 CEEMEA. In Poland, the NBP kept rates unchanged at 3.75%, as was widely expected. Given Juan Orts the deterioration in the global environment and rising Polish inflation, Governor Glapinski adopted a hawkish stance. While we continue to expect rate stability in the near term, the risk of We would like to thank Hajar Boulfoul for a rate hike has increased. her valuable research contributions.

 LATAM. New opinion polls and prediction market trends show Flavio, at a minimum, tied with Lula about a month out from Brazil general elections. Local markets are rallying on the rising probability of Flavio winning the election; however, we are not convinced Lula will be voted out Contents of office and remain neutral on Brazil ahead of the vote. Low policy rates and a dovish Chilean Highlights...........................................1 Central Bank keep us relatively pessimistic on the Chilean peso, especially relative to EM Strategy cheat sheet ....................2 fundamentally stronger currencies such as the Colombian peso. For now, we believe the Mexican EM trade idea monitor .......................5 peso can continue to perform on relatively attractive carry and stable local political conditions. Asia Strategy Updates .......................6 Fed rate hikes may test peso resilience, especially as Banxico signals a willingness to decouple CEEMEA Strategy Updates ...............15 from the Fed. A more aggressive Fed tightening cycle could prompt us to take a more cautious LATAM Strategy Updates .................16 Frontier Markets Strategy Updates .20 stance on MXN and consider paying rates. Global EM previews .........................24 Brazil – Central bank watch ............. 27  FRONTIER. Recent inflation data strengthen the case for the Central Bank of Egypt (CBE) to Taiwan – Central bank watch .......... 28 Forecasts: rates & currencies...........30 keep policy rates unchanged at the 24 September MPC meeting. Inflation undershot expectations in August, printing at 14.5% yoy. Meanwhile, the external position continues to improve. After excluding gold reserves, the central bank's NFA position turned positive at roughly USD 635m, a marked improvement from a negative USD 5.9bn in February. While the stronger external position and downside inflation surprise in August reduce pressure on the CBE to tighten financial conditions in the near term, the inflation outlook remains uncertain and subject to competing forces that continue to complicate the monetary policy outlook. We discuss our policy rate outlook, key inflation drivers and alternative risk scenarios to the policy rate in detail in the Frontier Markets section. We maintain our long FX-hedged EGYTB trade idea.

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EM Strategy cheat sheet 1m View Colour Key Strongly Bullish (positive currency total returns, or lower bond yields and swap rates) Slightly Bullish Neutral Slightly Bearish Strongly Bearish (negative currency total returns, or higher bond yields and swap rates)

ASIA 1m View Summary China FX Bond…