Super El Niño Famine Follows War

Climate models indicate a high probability of a 'very strong' El Niño in 2026, posing significant inflationary risks to global food prices and growth threats to vulnerable EM economies. The report highlights India, Brazil, and Mexico as the primary exposed regions while adjusting tactical currency and equity positions.

Key Takeaways

• 1.El Niño creates an inflationary shock via food prices, compounded by high fertilizer costs.
• 2.India, Brazil, and Mexico are identified as the most exposed emerging markets to El Niño's inflation and growth risks.
• 3.Portfolio strategy shifts include taking profit on short USD/CNY and long BRL+ZAR vs USD trades.

Table of Contents

• India – El Niño to hit prices, employment and potentially equities
• Brazil – El Niño could weigh on power, food prices
• Mexico – El Niño to push up food prices
• Portfolio update – Profit taking and dollar risk
• ASSET ALLOCATION
• ABSOLUTE VIEWS
• CLOSED VIEWS

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial