Sep 9, 2026 · 11 min · 10 segments
EM FX has enjoyed a lift from a constructive macro backdrop, with growth resilient and inflation generally under control. We retain a bullish bias (long KRW, MYR, BRL) but caution against being…
Abbas KeshvaniGuestDasha ParkhomenkoGuest
Luis EstradaGuestspeaker_0Host
Since the middle of the year, EMFX has been rallying, with some particular standouts like the Korean won, which has soared twelve percent, or the Colombian peso, which is up eight percent.
As listeners of this podcast will know, EMFX is best suited to a climate of robust growth and cool inflation.
EM economies have enjoyed solid demand for manufactured goods like Korean semiconductors or commodities like Chilean copper.
And at the same time, inflation has remained orderly enough to permit DM central banks to generally hold pat.
Unless we get a pickup in inflation that necessitates tighter monetary conditions, EMFX should continue to enjoy a healthy macro backdrop.
Abbas, I hear you on the current backdrop for EM, but given the ongoing disruption to energy supplies, surely that does not extend to energy importers, right?
One of the caveats to our generally constructive outlook is that one should avoid being short oil, because our commodity analysts caution that the war continues to disrupt energy prices while a diplomatic off-ramp for the war remains elusive.
Asia in particular is vulnerable to higher energy prices, given that the region is generally made up of oil and gas importing economies.
So even though a lot of Asian tech exporters enjoy the glow of AI, the region is relatively vulnerable to higher energy prices.
And to this point, we remain long the Korean won to position for incoming CapEx, but we fund this trade in other energy exposed currencies like INR, IDR, and the euro.
Since the middle of the year, EMFX has been rallying, with some particular standouts like the Korean won, which has soared twelve percent, or the Colombian peso, which is up eight percent.
As listeners of this podcast will know, EMFX is best suited to a climate of robust growth and cool inflation.
EM economies have enjoyed solid demand for manufactured goods like Korean semiconductors or commodities like Chilean copper.
And at the same time, inflation has remained orderly enough to permit DM central banks to generally hold pat.
Unless we get a pickup in inflation that necessitates tighter monetary conditions, EMFX should continue to enjoy a healthy macro backdrop.
Abbas, I hear you on the current backdrop for EM, but given the ongoing disruption to energy supplies, surely that does not extend to energy importers, right?
One of the caveats to our generally constructive outlook is that one should avoid being short oil, because our commodity analysts caution that the war continues to disrupt energy prices while a diplomatic off-ramp for the war remains elusive.
Asia in particular is vulnerable to higher energy prices, given that the region is generally made up of oil and gas importing economies.
So even though a lot of Asian tech exporters enjoy the glow of AI, the region is relatively vulnerable to higher energy prices.
And to this point, we remain long the Korean won to position for incoming CapEx, but we fund this trade in other energy exposed currencies like INR, IDR, and the euro.
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