UBS On-Air: Market Moves Top of the Morning: Resilience tested - Emerging markets navigate the energy shock
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Mar 27, 2026 Alejo Czerwonko, CIO for Emerging Markets Americas at UBS CIO, discusses resilience in emerging markets. He compares why EM bonds have held up while equities faltered. He explores how the energy shock transmits to financial conditions and why Latin America may act as a relative safe haven. He outlines positioning ideas for EM bonds and cautious upside for equities.
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History Favors Staying Invested After Geopolitical Shocks
- Geopolitical shocks typically produce positive medium-term market returns.
- Alejo Czerwonko notes the S&P 500 delivered median +10% the year after major shocks and positive returns nearly 80% of the time since 1940.
Energy Shock Raises The Stakes For Markets
- The current energy crisis raises the odds this shock leaves a lasting mark on asset prices.
- Alejo warns the IEA calls it the worst energy crisis in history and high energy could force central banks to hike, tightening financial conditions.
Energy And Financial Conditions Drive Transmission Risk
- Energy prices and financial conditions are the key transmission channels from the crisis to markets.
- Alejo explains higher energy can spark inflation expectations, prompting central banks to raise rates and tighten financial conditions globally.