At Any Rate EM Fixed Income: Risks around a positive base case
Feb 25, 2026
Ben Ramsey, Head of EM Sovereign Credit Strategy at J.P. Morgan, offers sharp takes on sovereign indices and credit spreads. Anezka Christovova, Head of EMEA EM & Latam Local Market Strategy at J.P. Morgan, breaks down EMFX and local market moves. They cover market directionlessness, Middle East geopolitical tail risks, US–Iran local market effects, tariffs and AI-related cyclical risks, and index technicals like UAE exclusion.
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Structural And Cyclical Support For EM
- EM supports remain intact due to structural flows into EM, solid cyclical growth in EM and DM, and well-behaved inflation driving investor appetite.
- Jonny Goulden notes equity rotation (EM +13% YTD) and stable Fed expectations as key sustaining forces.
Local Geopolitical Premia Tend To Be Short Lived
- Israel and nearby local markets may see short-lived ~3% geopolitical risk premia that reverse quickly, per past confrontations with Iran.
- Anezka Christovova highlights higher shekel valuation and raised option skew making hedging less attractive now.
Oil Prices Are The Key Global Spillover Risk
- Oil moves are the main global channel for a broader EM shock; local markets have barely reacted to nearly 20% oil upside so far.
- Anezka says markets may view the rise as temporary premium or demand-driven, limiting hedging demand.