At Any Rate EM Fixed Income: Assessing a big week for trade and macro data
Aug 1, 2025
Jonny Goulden and Anezka Christovova dive into the shifts in US trade policy and their repercussions on emerging market fixed income. They discuss how unexpected payroll figures and tariff changes shape market sentiment and currency performance. The podcast also highlights the growing significance of technical indicators in EM trading and the interplay between EM bonds and US interest rates. Additionally, they analyze the crucial role of central banks in navigating today’s complex economic landscape.
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EM Tariffs Approach 20%
- EM countries face higher US tariffs than expected, nearing an average of 20% which could slow economic activity.
- The tariff environment remains fluid with potential product exemptions and ongoing negotiations impacting outcomes.
US Payroll Surprise Shakes EM
- The US jobs data showed a surprising downside with large payroll revisions, shaking market optimism.
- This weak data challenges the previously expected growth outlook, prompting reassessment in EM local markets especially currencies.
EMFX Moves Driven by Technicals
- EMFX faced technical trading dynamics and over-positioning rather than fundamentals in recent weeks.
- The fading US exceptionalism theme, impacting EM currency strength versus the dollar, may now be reversing with the payroll data.