At Any Rate EM Fixed Income: Middle East conflict week 3 damage assessment for EM
5 snips
Mar 20, 2026 Ben Ramsey, Head of EM sovereign credit strategy at J.P. Morgan, offers sovereign credit and spread analysis. Anezka Christovova, Head of IMEA EM and LATAM local market strategy at J.P. Morgan, covers FX, rates and local market moves. They discuss conflict-driven market shocks, rates vs FX sensitivity, idiosyncratic local opportunities and Venezuela’s recent market dynamics.
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Conflict Is The Dominant Market Driver
- Jonny Goulden argues the Israel-Iran conflict is the dominant market driver and likely aligns with initial 4–6 week estimates, keeping uncertainty high.
- He says markets price a residual tail risk of prolonged conflict that could spike energy and tip global growth into recession.
Rates Are More Vulnerable Than FX To Oil Shocks
- Anezka Christovova finds rates more vulnerable than FX to energy supply shocks, with sell-offs in rates persisting for several months.
- Her historical review shows no consistent EMFX reaction; the dollar backdrop matters more than oil alone.
Express Hungary Risk Through Relative Value Plays
- Anezka recommends focusing on idiosyncratic opportunities like Hungary ahead of its 12 April election and using relative‑value or option expressions to limit energy exposure.
- She also flags linkers and FX pairs where authorities have intervened as asymmetric plays.