Global EM Weekly

Latest edition · September 25, 2026

Global EM Weekly Where is there still room to cut

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.

Societe Generale's Global EM Weekly assesses where room for monetary easing remains amidst a global rates sell-off driven by elevated energy prices and resilient US growth. While EM Asia faces monetary tightening through mid-2027 and Poland and Peru prepare for near-term tightening, central banks across the rest of CEEMEA, LATAM, and Frontier markets retain scope to ease policy over the coming year. Latin American currencies face headwinds from UST yield spikes and carry trade unwinds, amplified by Banxico's explicit move to decouple from the Fed. Tactically, the team recommends receiving KRW 1y1y and 5y TWD NDIRS, receiving COP 1y IBR, staying short EUR/IDR and USD/KZT, while holding neutral stances on Brazil and Colombia currencies.

Key takeaways from the latest edition

• 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.

What this series covers

• 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

Edition archive

• Global EM Weekly Where is there still room to cut

  September 25, 2026

• Emerging Markets Global EM Weekly Tactically trading a higher for longer global rates environment

  September 11, 2026

• Global EM Weekly Forecast update Upbeat forecasts for EM local markets

  September 4, 2026

• Global EM Weekly - Geopolitics and oil prices reemerge as EM headwinds

  July 24, 2026