Global EM :
Two proprietary EM indicators (>>0 track):
• 1st = global macro risk support
• 2nd = EM-specific risk sentiment
Interesting divergence: EM risk appetite still well above danger zone, while global macro support for EM just dropped sharply.

Python if people asked

🇸🇳 Sénégal : after being out of the name for long time. Just started to build a position this morning benefiting from volatility. Not a high conviction trade but some good willingness supporting by an IMF open minded. Sizing matters.

It’s depend which kind of EM segment you are looking at. Mainstream I would say classical ones (jpm, ms,…). Frontier markets : Tellmier, Banctrust,…

🇦🇷 Argentina : Here we go. Should be a great day for Argentina holder 😀

IMF takeaways : cautious but a mood of hope with no euphoria. Everyone know about poor valuation but need to sell asset class to survive.
Still don’t like Senegal, though an SLA looks possible. Venezuela still comfortable with.

IMF meetings start today. Let’s see if anything truly insightful comes out of them.

Just reload at 50.75 for color. We are quasi back to the low and in the meantime we have had the US support.

To be transparent I closed the majority of my exposure at 58.625 (62 and 55.25).
Volatility should remain and should offer interesting opportunities imho.

Tbh, corporate investors crack me up:
• “Corps are more resilient” → nah, just illiquid
• “They lag because of the sovereign cap”
• “They blow up because gov interference”
Sounds like my 6-year-old searching for excuses 😂

Close to have Brady bonds

a man in a suit and tie is asking " what 's going on here " ALT: a man in a suit and tie is asking " what 's going on here "

🇦🇷 Argentina : Buenos holders looking Argentina bonds

🇦🇷 Argentina : Some good news coming from US. Bonds are up 7pts.

🇦🇷 Argentina: Added a second tranche at 48.4 on this latest leg lower, still capacity to increase.
Interesting how the market eagerly chased every 0.5pt dip around 70, yet is now just as eager to unload at any price.

The best contrarian quant model in EM. Short IMF mood

a man in a suit and tie is sitting in a chair with his hands in the air ALT: a man in a suit and tie is sitting in a chair with his hands in the air

All my PM colleagues (€IG as €HY) panic over France slipping from AA- to A+, while I’m chilling on a comfy B- cushion. Different leagues of stress.

Global EM: Total return ~10% over the past 6 months. Historically, further upside over the last 25 yrs only came after a global shock.

Risk/reward now feels asymmetric, time to reduce risk or to be selective.

TTR by region (25 yrs):

🇹🇳 Tunisia – Big day for this credit. Been long since the early lows, riding the whole curve: 23s, 24s, 26s and finally the 31s starting around 55 cts.

🥳

Luck is a dividend of sweat 😉

To be fair it’s 11-12% (carry excl.) without the tender. Obviously I’m enjoying the extra 5-6%.

🇨🇴 Colombia: +17% since then.

Today’s €4.1bn 3-part deal reportedly drew ~€22bn demand. Liability mgmt well timed, but with spreads now ~325bp, valuation no longer looks cheap.

🇦🇷 Argentina: sharp wake-up for bondholders. I cut most of my exposure Friday on positioning & risk/reward (still have a bit of Buenos). Bonds opened -6pts, so I picked up Arg 35s at 56.2 (still have lot of room to add). Good luck to everyone

🇻🇪 Venezuela: A bit of newsflow as pressure is rising on Venezuela and Maduro.

EM Global : EM sov spreads outperforms corpo ones <> DM

2004–07: Sovereigns outperformed on the commodity boom
2010–22: Deficits hurt sovereigns
Since 2022: Fiscal repair + CB credibility = sov tightening cycle

EM sovereigns spreads should continue to outperform corporates.

🇪🇨 Ecuador : As you know Ecuador has been part of my biggest convictions over the last 2-3years. But today it’s time to say goodbye. My trigger is more about oil price and overall market valuation than the gvt itself.

🇿🇲 Zambia : (Bloomberg) -- Zambia’s debt-carrying capacity under the Composite Indicator rating remains weak, the International Monetary Fund says in staff report.

53s down 4pts 😬

a cartoon of donald duck is laying in bed with his eyes closed ALT: a cartoon of donald duck is laying in bed with his eyes closed

Global EM : Any opportunity ? No ? Ok back to bed.

Still holding:
- high cash level bucket or 1yr paper ~20%+
- decent CDS expo ~ 70%
- decent steepner in $
- credit barbell between IG and B/lower credits
- fx frontier vs € or $

Let’s hope August could offer some volatility.

Global EM:
- chief we can’t issue anymore
- ok don’t worry do green bonds, it will fly under the radar for most investors
- chief no one care about green bonds anymore
- I have a crazy idea, let’s rebase our GDP

Bravo!

¡Ay caramba! I stupidly bought CDS

Let me clarify: last chart is just 6m rolling em regional normalization on price. Below same chart on spreads.

So what I’m saying is just I’m more cautious about spread duration risk locally.