London Daily

Focus on the big picture.
Saturday, Mar 21, 2026

Emerging Markets on Edge as Goldman and Deutsche Bank Flag Risks

Emerging Markets on Edge as Goldman and Deutsche Bank Flag Risks

Emerging markets are heading toward the end of the third quarter with more reasons to be cautious than optimistic.

Developing-nation stocks, currencies and bonds had their worst week in the five days through Friday since the coronavirus pandemic rocked global markets in March. The gap between implied volatility in emerging-market currencies and their Group-of-Seven peers is at the widest since June amid concerns over renewed lockdown measures and delays to further U.S. fiscal stimulus.

Manufacturing reports from China, India, Brazil and South Africa that are being published this week are potentially less decisive for investors than the global sentiment toward risky assets. Investors are bracing for higher price swings around the U.S. November elections, with the first presidential debate between Donald Trump and challenger Joe Biden scheduled for Tuesday.



And they’re being encouraged to move to the sidelines. Deutsche Bank AG is taking a “more defensive stance” on emerging-market credit as it expects increased volatility from the U.S. election to fuel a selloff in risky assets. Never mind that the wave of central-bank stimulus and investors’ hunger for yield had lifted developing-nation dollar debt for five months.

Goldman Sachs Group Inc. is asking investors to put their money into high-yielding currencies, such as the Mexican peso, the South African rand and Russian ruble, but only “once the dust settles.” Expectations for swings in the those currencies against the greenback rose by the most among peers last week.

“With the broad dollar still volatile, and risks still in focus, it is likely too early to engage in fresh longs,” Goldman Sachs strategists, including New York-based Zach Pandl, wrote in a note.

Central banks in India and the Philippines are both forecast to keep interest rates on hold Thursday, as they balance the need for additional stimulus against a backdrop of rising market volatility. Turkey and Hungary unexpectedly increased borrowing costs last week to support their weakening currencies.

Rate Decisions


* Elevated inflationary pressures are likely to constrain the ability of the Reserve Bank of India to ease policy, according to Bernard Aw, principal economist at IHS Markit in Singapore. “We expect the central bank to continue to boost liquidity through other measures, such as cutting the cash reserve ratio,” he wrote in a research note
* The Philippine central bank may lower its benchmark by another 25 basis points, though it’s more likely to move in November or even later to have more impact as the economy reopens more fully, Citigroup Inc. economists including Johanna Chua in Hong Kong wrote in a report
* The Philippine peso is the best-performing emerging-market currency this year, gaining 4.5%, while the Indian rupee has fallen 3%
* Ghana will probably hold its key rate on Monday after the economy contracted less than forecast in the second quarter
* Kenya will also likely keep its interest rates unchanged on Tuesday, while policy makers in Angola will decide on Monday

* On Monday, Colombia’s central bank will release the minutes of its Sept. 25 meeting, when it cut the benchmark rate by a quarter point to 1.75%
* Urban unemployment figures for August, to be released on Wednesday, will probably show that after spiking earlier in the year, the jobless rate has stabilized

Data and Events


* China will release manufacturing numbers on Wednesday that are expected to show the nation’s economic recovery extended into September. The Caixin gauge of manufacturing is due the same day
* Profits at Chinese industrial enterprises grew for a fourth consecutive month, as the country’s factories maintained momentum following the pandemic shutdown
* The yuan has strengthened more than 3% this quarter, beating all its Asian peers
* South Korea will publish industrial production figures on Tuesday and trade data two days later. Exports are likely to see an annual gain in September, the first since the pandemic struck, but that will mainly reflect a higher number of working days rather than improving underling momentum, according to Bloomberg Economics
* The won is the top-performing EM currency after the yuan over the past month
* Malaysia will announce trade data on Monday, while Thailand will publish the same figures on Wednesday along with its current-account balance. Indonesia reports inflation data on Thursday
* Vietnam will report a slew of data on Tuesday, including gross domestic product and retail sales. The economy is one of the few in the region expected to avoid a contraction this year, according to the Asian Development Bank
* Data on Tuesday will probably show South Africa’s unemployment rate surged to a new record in the second quarter as lockdown restrictions forced many businesses to cut jobs to save costs, or close permanently
* The rand was the worst performer among peers last week after the Mexican peso
* Lebanon’s prime minister-designate stepped down on Saturday after failing to form a government, leaving the nation rudderless as it struggles to recover from a devastating explosion at its main port last month
* Saad Hariri, Lebanon’s former premier close to Saudi Arabia, said he won’t be a candidate to form a new government
* The nation’s Eurobonds gained 1.9% this month, the top performer in emerging markets after debt sold by Suriname and Malaysia, according to Bloomberg Barclays indexes
* In Argentina, investors will monitor the release of July economic activity for insight into how social distancing measures, capital controls and debt negotiations affected production. Government tax revenue data for September will be released on Friday
* Markets will continue to react to the imposition of tighter capital controls
* Chile is set to post August unemployment, retail sales and copper production figures on Wednesday as the economy starts to recover from the worst of the pandemic-driven recession. Thursday’s release of economic activity for August will complete the list of growth indicators
* Chile’s peso outperformed all of its emerging-market peers this quarter
* Brazil’s primary budget balance figures, expected on Wednesday, will probably show another month deep in the red, according to Bloomberg Economics. A positive reading of August industrial production data on Friday could help boost optimism for growth

Newsletter

Related Articles

0:00
0:00
Close
Lord Walney Warns of Expanding Iranian Influence Networks Within the United Kingdom
Iranian National Among Two Arrested After Attempt to Access UK Nuclear Submarine Base
Deregulation, Artificial Intelligence, and Fraud Laws Reshape UK Financial Services Landscape
UK Considers Lower Speed Limits to Reduce Fuel Use Amid Escalating Energy Crisis
UK Borrowing Costs Surge to Post-Crisis High as Markets React to Inflation and War Risks
UK Government Prepares Emergency Economic Measures as Iran Conflict Fuels Financial Risks
Meningitis B Outbreak in the UK Raises Urgent Health Warnings as Cases Surge
Iran Issues Stark Warning to Britain Over US Base Access Amid Expanding Conflict
United Kingdom Authorizes US Strikes from British Bases as Iran Threatens Key Shipping Routes
Reform UK Suspends Scottish Candidate Following Financial Misconduct Allegations
Apple issues an unusual warning: this is how your iPhone can be hacked without you doing anything
UK and Nigeria Reach Agreement to Accelerate Return of Irregular Migrants
UK Sets New Aid Priorities Following Significant Budget Reductions
Cyprus President Urges Open Dialogue Over Future of British Sovereign Base Areas
Cyprus President Urges Open Dialogue Over Future of British Sovereign Base Areas
UK Plans 50% Steel Tariffs in Bold Move to Protect Domestic Industry
Iran Conflict Sends Shockwaves Through UK Economy as Energy Costs and Trade Risks Surge
UK Health Officials Warn Kent Meningitis Outbreak Still Active as Cases Continue to Rise
UK Climate Progress Faces Scrutiny Over Reliance on Carbon Accounting Methods
UK Deploys Advisers to United States to Shape Plan for Reopening Strait of Hormuz
Amazon Bets on AI-Driven Alexa Upgrade to Revive UK Smart Speaker Market
UK Abortion Law Changes Spark Strong Response from Church Leaders and Pro-Life Advocates
UK Abortion Law Changes Spark Strong Response from Church Leaders and Pro-Life Advocates
GB News Faces Regulatory Complaints Over On-Air Remarks on ‘Genocide’ Claims
UK Signals Expanded Support for Gulf Allies as Iranian Attacks Intensify Regional Threats
UK VAT Decision Opens Path for Potential Refunds to U.S. Biopharma Firms
UK and Canada Advance ‘Middle Power’ Strategy to Shape Global Influence Beyond Superpowers
Google Explores AI Opt-Out Features in Search to Address UK Regulatory Concerns
Google Explores AI Opt-Out Features in Search to Address UK Regulatory Concerns
UK Fuel Prices Poised to Surge as Global Tensions Drive Oil Market Volatility
UK Fuel Prices Poised to Surge as Global Tensions Drive Oil Market Volatility
UK Holds Back on Hormuz Escort Mission While Continuing Talks with Allies
TrumpRx Pricing Platform Faces Scrutiny as Some Medicines Remain Costlier Than in the UK
UK, Netherlands and Finland Explore Joint Defence Investment Bank to Boost Military Capability
Deadly Meningitis Outbreak in Kent Raises Alarm as Cases Surge and Emergency Response Expands
UK Security Adviser Viewed US-Iran Nuclear Deal as Within Reach Before Sudden Escalation
UK Prime Minister Urges Continued Focus on Ukraine Amid Escalating Iran Conflict
UK Introduces New Safeguards to Shield Lenders from Bank Run Risks
UK Promotional Products Market Surpasses £1.3 Billion as Demand Strengthens in 2025
Reeves Pushes for Deeper UK-EU Economic Ties to Revive Growth
UK Security Adviser Saw No Imminent Iranian Nuclear Threat Days Before War Erupted
France Signals Warm Welcome for UK Return to EU Single Market Amid Renewed Cooperation Talks
UK Defence Official Criticises Boeing Over Delays to E-7 Wedgetail Programme
UK Urged to Secure Quantum Talent as Minister Warns Against Repeating AI Setbacks
UK Mayors Set to Gain New Spending Powers Under Reeves’ Fiscal Devolution Plan
Western Allies Urge Restraint as Israel Weighs Expanded Ground Operation in Lebanon
Trump Warns NATO Faces ‘Very Bad’ Future Without Stronger Allied Support in Iran Conflict
UK Minister Says Britain Not Bound to Support Every Demand From U.S. President
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
×