Goldman Sachs Emerging Markets Research: More Upside Ahead for EM Equities & FX (September 2026)

Goldman Sachs reiterates a constructive stance on emerging markets following the August rebound, driven by upgraded 2026 EM earnings growth of 65% and resilient carry conditions. Although near-term energy and rate volatility remain potential speed bumps, tactical opportunities in equities, relative value FX carry, and selective local rates offer attractive risk-adjusted returns.

Key Takeaways

• 1.EM Equities are poised for further earnings-led gains with 2026 profit growth revised up to 65%, supporting a 12-month MSCI EM target of 2,000, although near-term targets are moderated to 1,800 due to rate and energy risks.
• 2.EM FX remains resilient due to broad US Dollar weakness; relative value carry remains the core strategy (favouring MXN, BRL, and COP long vs select funding shorts like THB, ILS, PLN), alongside sustained gradual CNY appreciation towards 6.40.
• 3.EM local rates offer selective value in high-yielding front-ends and bellies (BRL, HUF, ZAR) where inflation risk is overpriced, while low-yielders face duration and fiscal pressures, favouring steepeners in PLN.

Table of Contents

• EM Equities: Higher, Broader, with Near-Term Risks ...
• We retain our positive core view as underlying profit growth remains strong ...
• EM FX: Two Themes for the Home Stretch
• EM Local Rates: No Escaping from the (Oil) Barrel
• EM Sovereign Credit: More of the Same, But a Little More Extreme
• Macro forecasts and outlook
• Market forecasts and valuations
• EM cross asset valuation
• Flows and Positioning
• EM Currencies
• EM Local Rates
• EM Equities
• EM Regional Performance
• EM Sovereign Credit

Report data

Exhibit 10: EM equities tend to perform well in periods of rising US rates, as long as the global/US economic growth backdrop remains strong — as of September 2, 2026.

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