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Emerging Markets

Brazil: The Hawks Are Still Flying
The Central Bank of Brazil (BCB) held rates at 15%, guaranteeing a sharp growth slowdown and reinforcing our underweight stance on Brazilian equities versus EM. All Copom board members voted to maintain an ultra-hawkish policy due to unanchored inflation…
Daily Insights by Juan Egana
South Africa Cuts Rates, More Easing Likely As Growth Slows
The SARB cut rates by 25 bps to 7.00%; our EM strategists expect further easing and recommends short ZAR exposure. Real interest rates remain elevated, and high borrowing costs are intensifying debt sustainability concerns, with 10-year yields far above…
Daily Insights by Rajeeb Pramanik
Turkey: An Opportunity In Domestic Bonds

Thanks to the tight monetary and fiscal policies so far, inflation and growth are heading lower in Turkey. Buy 2-year local currency bonds, currency unhedged. Also, upgrade Turkey's domestic bonds from neutral to overweight and stocks from underweight to neutral within their respective EM portfolios.

Emerging Markets Strategy by Rajeeb Pramanik
Brazil: Not Worth The Risk
BCA’s Emerging Markets strategists continue to underweight Brazilian equities, local bonds, and sovereign credit, and initiated a receiver position in 2-year swap rates. Brazil’s public debt remains on an unsustainable trajectory, with neither current policy…
Daily Insights by Felix-Antoine Vezina-Poirier
Dilution: The Silent Drag On Equity Returns (Part 2)
BCA’s Emerging Markets strategists remain negative on EM stocks in absolute terms but recommend a neutral weighting within global equity portfolios. Economic growth does not reliably translate into earnings per share or shareholder returns, with dilution (net…
Daily Insights by Felix-Antoine Vezina-Poirier
Brazil: Not Worth The Risk

A potential right-wing government in 2027 will not stabilize the trajectory of the public debt-to-GDP ratio. Unsustainable public debt, a large current account deficit, and a sharp growth slowdown will lead Brazilian markets to underperform EM. Yet, to benefit from a quickly decelerating economy, we recommend receiving 2-year swap rates.

Emerging Markets Strategy by Juan Egana
Why Balance Of Payments Matter: A Chartbook

In this chartbook, we look at the balance of payments across DM and EM countries. The US does not fare well, but neither do a few other countries.

Foreign Exchange Strategy by Chester Ntonifor
Dilution: The Silent Drag On Equity Returns (Part 2)

Economic growth and rapid expansions do not always translate into higher EPS and shareholder returns. One of the key reasons is dilution. We offer a typology of dilution: (1) “offensive”, (2) “defensive”, (3) corporate governance-linked, and (4) idiosyncratic cases.

Emerging Markets Strategy by Arthur Budaghyan, Rajeeb Pramanik
Still Moving Sideways

Our Portfolio Allocation Summary for July 2025.

US Bond Strategy by Ryan Swift
Muted Demand, Excess Supply Keep China in Deflation
Persistent deflation and constrained policy options support a defensive stance on China, favoring bonds and high-dividend equities. Consumer prices were roughly flat in June, rising just 0.1% y/y after a 0.1% decline in May. Producer prices fell 3.6%,…
Daily Insights by Felix-Antoine Vezina-Poirier

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