Report published September 25, 2026
Global EM Weekly: Where Is There Still Room to Cut? | Société Générale Research
Société Générale · September 25, 2026
The global bond sell-off and sticky inflation are skewing central bank pricing hawkishly, dividing emerging markets into three distinct policy trajectories. Monetary tightening will be concentrated in EM Asia through mid-2027, with Poland and Peru tightening modestly, while the rest of CEEMEA, LATAM, and Frontier central banks still have scope to lower policy rates over the next 12 months.
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Finvaulta summarizes Société Générale's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.EM monetary policy cycles are diverging into three distinct groups: tightening concentrated in EM Asia through mid-2027, near-term tightening pressure in Poland and Peru, and remaining room to cut over the next 12 months across most of CEEMEA, LATAM, and Frontier markets.
- 2.Latin American currencies are facing broad depreciation pressures due to elevated US Treasury yields, USD resilience, and the unwind of crowded carry trades, exacerbated by Banxico's explicit intention to decouple from the Federal Reserve's tightening cycle.
- 3.Tactical rate receiver positions are favored in South Korea (KRW 1y1y receiver targeting 3.90%) and Taiwan (5y TWD NDIRS receiver target lowered to 2.20%), while China rates remain domestically insulated from global bond-market sell-offs.
Table of Contents
- Highlights
- EM Strategy cheat sheet
- EM trade idea monitor
- Market snapshot – Where is there still room to cut?
- Asia Strategy Updates
- China: Trump-Xi meetings – highly decorative, but practical
- Korea: Cautiously constructive on Korea duration
- Taiwan: Lowering the 5y TWD NDIRS target to 2.20%
- CEEMEA Strategy Updates
- Poland: mixed bag of macro data; CPI to rise further in September
- LATAM Strategy Updates
- Brazil: October 4th is around the corner
- Chile: Short CLP/COP stopped for a 1% profit. Still pessimistic CLP
- Colombia: Short CLP/COP stopped for profit as long COP trades unwind
- Mexico: Closing short EUR/MXN on Banxico diverging from the Fed
- Global EM previews
- Colombia – Central bank watch
- South Korea
- Brazil
- Forecasts: rates & currencies
- SG EM Econ Releases Calendar
Report data
Global monetary policy cycles — as of September 24, 2026.
| Metric | Estimate | Context |
|---|---|---|
| Poland September Headline CPI Forecast | 4.2 % yoy | Headline inflation expected to accelerate on fuel price increases following the expiration of the government fuel price cap. |
| South Korea September Exports Forecast | 61.1 % yoy | Export growth moderating from 68.7% due to working-day calendar shifts from Chuseok, with daily tech momentum intact. |
| Colombia BanRep Policy Rate | 12.00% | Expected to hold steady as restrictive settings curb inflation, marking the likely end of the tightening cycle. |
| Brazil Unemployment Rate | 5.3% | National unemployment rate forecast to remain steady at tight cyclical lows. |
| Central Bank of Nigeria Policy Rate Cut | 350 bps | CBN surprised markets by cutting its policy rate by 350bp to 23.00%. |
Reports in this series
Global EM Weekly is shown in chronological order through this edition, published on September 25, 2026.
Part of the Global EM Weekly series — view all 5 editions
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