

Top of the Morning: Emerging Markets - Digesting regime change
May 1, 2025
Alejo Czerwonko, CIO for Emerging Markets Americas at UBS, shares his insights after the recent IMF-World Bank meetings. He discusses the evolving landscape of emerging markets and the implications of U.S. trade policies. Alejo addresses the challenges to the U.S. dollar’s status as the global reserve currency, alongside the potential for growth in Latin America, especially Argentina. He highlights the significance of understanding regime changes in these markets and the importance of keeping informed on these shifting dynamics.
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Geo-economic Regime Change
- The world is undergoing a historic geo-economic regime change away from abridged globalization.
- Global leaders are uncertain about what the new economic order will look like.
Tariff Outlook Divergence
- Views on U.S. tariffs vary: foreigners expect worsening conditions, locals foresee imminent deals and deregulation.
- UBS expects tariff and market volatility short term, then moderation to 10-15% effective rates within 9-12 months.
Future of U.S. Dollar Status
- The U.S. dollar's reserve status won't collapse but exposure to U.S. assets will be reevaluated globally.
- This debate will be secular, lasting multiple years amid geopolitical shifts and capital flow changes.