MNI EM Credit Weekly

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EXECUTIVE SUMMARY:

• EM $ index spreads established new YTD tights as rising momentum behind tariff deals, including an agreement with the Philippines and a significant decline in new issuance versus last week supported spreads.
• Low beta ASIA outperformed in relative terms, in absolute terms LATAM outperformed, retracing all of last week’s widening.
• In ASIA, the US & Philippines signed a trade deal, positive read fo1wr Thailand. China’s State Administration for Market Regulation urged food delivery firms, Meituan and JD.com, to compete rationally, while Hyundai auto profits were impacted by tariffs and incentives.
• In CEEMEA, Türkiye’s CB cut by 300bp above expectations. GCC banks reported robust results, reflected in tight spreads. Sasol stated that volumes remained steady but pricing likely to impact margins and leverage. FCMN benefited from rising metal prices.
• In LATAM, Pemex got more Mexico government support. In Brazil, Braskem faced more environmental liability risk and provisioning. Argentina was upgraded to B2 by Moody’s, which led to rating upgrades for many corporate issuers, including for YPF.
• Earnings season, low issuance and tariff deals, including a possible deal with Korea, are expected to keep spreads in a narrow range.