Executive Summary: The week of March 6 was defined by a violent oil price shock: WTI crude surged sharply to close near $90/bbl on Friday — one of the largest weekly gains in years — while Brent moved into the $80–90/bbl range as traders priced in real supply disruption risk from the Strait of Hormuz. The catalyst was the US–Iran war, which entered its seventh day on Friday March 6, with traffic through the Strait severely curtailed and heightening concerns over global supply. This supply shock reshapes the macro backdrop for EM credit: oil-importing sovereigns face acute fiscal and current account stress, while the inflation transmission through supply chains — not demand — is the primary channel to monitor. Separately, China’s NPC opened on March 5 with a GDP growth target of 4.5–5% for 2026, the lowest band in decades and below the long-standing “around 5%” reference, generating muted initial market disappointment.
Macro Overview
🛢️ Oil Shock: Strait of Hormuz Premium
WTI’s powerful weekly move — closing near $90/bbl on Friday — marked its strongest rise in years, with prices briefly trading well above that level in early Asian hours as overnight liquidity magnified the war premium. Brent moved into the mid-$80s as of March 5 and has been trading in an $80–90/bbl range, consistent with major bank estimates that current pricing embeds a sizeable but not yet extreme Strait of Hormuz disruption premium. The surge reflects the near-closure of the Strait of Hormuz, through which roughly 20 million bpd of oil and refined products — about one-quarter of global seaborne oil trade — normally flows. JPMorgan and other banks estimate that a multi-week restriction through Hormuz could push Brent sustainably above $100/bbl, depending on the duration and severity of the disruption.
🌐 Macro Themes: Inflation Transmission & Geopolitics
- Inflation Channel: The primary inflation risk from this oil shock runs through supply chain disruption, not headline energy demand. The Global Supply Chain Pressure Index (GSCPI) — our preferred leading indicator — remains the key metric to watch, particularly given that current shipping disruptions are geographically concentrated around the Strait of Hormuz and Red Sea corridor.
- US–Iran War & Geopolitical Bifurcation: The conflict entered Day 7 on March 6. US Secretary of Defense Hegseth’s statement that the US has “only just begun to fight” signals a prolonged engagement. China and Russia have condemned the operation; the deepening US–China bifurcation is accelerating pressure on previously non-aligned EM sovereigns to choose sides, with direct credit implications for the frontier universe.
- Electoral Calendar: Peru, Brazil, Colombia, and Hungary all head to the polls in 2026. The Venezuela regime transition (Maduro removed January 3; Delcy Rodriguez serving as interim president) also introduces significant EM political risk in Latin America. The US midterms in November add further late-year uncertainty.
Regional Credit Developments
🌍 EM Ex-Asia Credit
- Bahrain: Middle East risk premium intensified materially this week given its geographic proximity to the Strait of Hormuz closure. Oil-linked Gulf sovereigns face a short-term revenue windfall but also heightened threat exposure. Spread movements are being monitored; positioning unchanged.
- Hungary: Spread widening continues ahead of the 2026 elections, compounded by EUR weakness and geopolitical overhang from the broader Eastern European bloc. The forint has been under pressure as risk aversion builds globally.
- Kenya: Continued fiscal consolidation concerns and IMF programme negotiations are weighing on spreads. The sharp rise in oil prices adds to Kenya’s import bill, with the country importing approximately 100% of its petroleum requirements. Monitoring for re-entry levels.
- Colombia: Heading to elections in 2026, Colombia’s USD-linked oil export revenues will be temporarily boosted by higher Brent prices — a short-term credit positive — though political uncertainty around the administration’s energy and fiscal policy remains the key risk. The Colombian peso and Latin American FX more broadly could experience divergence depending on net oil trade position.
- Venezuela: Following the January 3 US military operation that removed President Maduro, sovereign bonds — in default since 2017 — remain in active price discovery. Bonds have been trading in the low-to-mid 30s (cents on the dollar), with restructuring recovery value estimates from major asset managers clustering in the 40–50 cent range under an optimistic scenario, contingent on oil production recovery requiring multi-year, multi-billion dollar capital investment.
- Argentina & Ecuador: Both remain special situations. Argentina regained market access in 2026, with spreads seen converging toward average B-rated sovereign levels. Ecuador bonds delivered strong gains in 2025 following President Noboa’s election win and an IMF facility augmentation from $4bn to $5bn.
🇨🇳 Asia Credit: China — NPC & Market Reaction
- NPC GDP Target (4.5–5%): China set its 2026 GDP growth target at 4.5–5% on March 5 — the lowest on record since the early 1990s and the first time since 2019 that a range rather than a single-point target has been used. The prior three years all targeted “around 5%”. Consumer goods subsidies were trimmed to CNY 250bn (from CNY 300bn in 2025), while the official budget deficit was set at 4% of GDP, with CNY 1.3tn in ultra-long-term special bonds and CNY 4.4tn in local government special-purpose bonds planned. Stimulus was broadly perceived as below expectations.
- Hang Seng Index: The HSI closed up on March 5 as some relief buying emerged after the GDP target was broadly in line with consensus. However, initial NPC reaction was mixed given the absence of large-scale new stimulus, and institutional positioning remains cautious in the context of elevated global risk-off sentiment driven by the Hormuz situation.
- Alibaba / China HY: BABA and large-cap tech names saw modest CB volatility this week, with geopolitical risk-off sentiment and the modest NPC stimulus headline combining to cap any upside. The team is tracking equity-credit dislocations for relative value entry. China HY property names remain distressed with no new significant issuer developments this week.
🌏 Asia Credit: Frontier & Sovereign
- Pakistan: Among the more notable movers in the frontier sovereign complex this week. The ongoing conflict with Afghanistan is adding country-specific political risk on top of the broader EM risk-off tone. Pakistan bonds delivered strong gains in 2025 following the IMF staff-level agreement and subsequent rating upgrades, meaning current spread widening is partly mean-reversion from elevated valuations.
- Sri Lanka: Continued spread volatility as the post-restructuring recovery path is tested by the global risk environment. Sri Lanka successfully restructured its hard currency debt in 2025; current moves are secondary-market repricing rather than fundamental credit deterioration.
- Airlines Sector: The aviation sector faces a meaningful headwind from the surge in jet fuel and crude benchmarks. Airlines had previously been viewed as potential beneficiaries of lower fuel costs, but with WTI having moved into the $80–90/bbl zone — and intraweek prints even higher — forward fuel assumptions must be reset before deploying new long risk in the sector.
Watch
- Oil Shock: The IEA has proposed emergency reserve releases to temper the supply shock. Any Strait of Hormuz ceasefire or coordinated G7 reserve deployment could trigger a sharp oil price reversal with immediate knock-on effects across EM credit spreads — both oil-exporters (spread compression) and oil-importers (relief). The duration and severity of the Hormuz disruption remains the single most important variable for EM markets in the near term.
- Ratings Monitor: Several issuers are on negative and positive watchlists pending agency action from Moody’s, Fitch, and S&P. Oil-importing frontier sovereigns (Kenya, Pakistan, Sri Lanka) face the most acute near-term review risk given the deteriorating current account implications of sustained $80–90/bbl oil. The credit library will be updated as rating actions are published.
www.gembridgecapital.com
DISCLAIMER
This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.
AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.
Executive Summary: EM ex-Asia credit markets saw mixed performance this week, with selective weakness across CEEME and Africa offset by idiosyncratic moves in LATAM corporates. Broader sentiment was muted amid heightened geopolitical risk in the Middle East; macro view remains cautious with beta reduced into March ahead of key US NFP and CPI releases.
Market Visualizer
Regional Credit Developments
🌍 EM Ex-Asia Credit: CEEME
- COLOM: Clear underperformer; curve +20bp/+31bp wider and prices down -50ct/-1.88pt w/w, driven by local political risk (Invamer poll).
- REPHUN: Lagged due to threats to block EU sanctions; $ curve finished +8bp/+10bp and € curve +4bp/+8bp.
- ROMANI: Priced large €2.25bn 7Y and $2bn 10Y; new paper traded heavy with €33s and $36s down -7ct and -25ct below reoffer.
- UKRAIN: Closed weaker as mood deteriorated following Hungary’s move to block the €90bn EU loan package.
🌍 EM Ex-Asia Credit: Africa
- EGYPT: Recovered midweek after IMF confirmed the release of $2.3bn; curve finished unch/-1pt on the week.
- SENEGL: Spiked +1.25pt on IMF speculation before fading to +13ct/+63ct w/w after clarification on data misreporting.
- GABON: Recovered from Fitch warning after president instructed securing an IMF deal by May; ended unch/-25ct w/w.
🌍 EM Ex-Asia Credit: Latin America
- RAIZBZ: Volatile on Shell/Cosan capitalization headlines; curve finished -25ct/-2pt though 27s outperformed (+1.5pt).
- PARGUY: Tapped $300mm of 55s; tender offer expiration prompted positive secondary moves of +15ct/+65ct.
www.gembridgecapital.com
DISCLAIMER
This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness.
AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.
Executive Summary: EM ex-Asia credit ended the week on a firmer note amid macro support from firmer US data and buy-back demand, rebounding from mid-week softness driven by rates rallies and risk-off flows. HY names traded ‑13ct/‑50ct mid-week but recovered; IG spreads widened +2bp/+5bp early before stabilizing. Ukraine and SSA front-runners outperformed on geopolitical headlines and bank trips, while Latam corporates—notably RAIZBZ—faced heavy pressure on parent-company risk. Geopolitics drove Ukraine swings; SSA short-end rallied on IMF updates; Latam was buoyed by improving US ties (Argentina/Colombia); and corporates remained volatile on structural credit events.
Market Visualizer
Sovereign Highlights
🇺🇦 Ukraine
- Ukraine (A/B/C): Volatile week with +0.125/+0.375 on Friday amid FT-reported “ceasefire enforcement procedure” (Ukraine/Europe/US agreement), offset by Russia tensions.
- Weekly Performance: As +25ct/+38ct, Bs ‑13ct/+25ct, Cs ‑63ct. Mid-week dips on prisoner swap headlines and macro weakness.
🌍 Sub-Saharan Africa Sovereigns
- Nigeria/Egypt: Firmed flat/+0.25pts; broadly stable.
- Kenya: Underperformed ‑0.50/‑0.125pts.
- Zambia: Rebounded (A +0.125pts, B +1.125pts) after Morgan Stanley sell note.
- Senegal: Led gains with +0.375/+1.125pts (short-end strong), +2.38pt/+5.25pt w/w on bank trips.
- Others: Angola flat; Gabon +0.50pts early; Lebanon +0.625pts/‑0.25pts on IMF visits.
🇧🇷 Latin America
- Argentina: Non-eventful (‑0.10/+0.15pts) despite US tariff-scrapping deal.
- Ecuador: Flat mid-week after ‑0.75/‑0.50pts earlier.
- Colombia: Flat short-end/+0.10/+0.35pts long-end on Trump/Petro meeting and Cepeda primary ineligibility.
- Venezuela/PDVSA: ‑0.35/‑0.15pts.
- Costa Rica: +0.10/+0.40pts post-Fernandez election.
🇹🇷 Other Sovereign
- Turkey: €2bn 8Y printed at 5.15%; $ curve unch/‑1bp tighter.
Corporate Highlights
📈 EM Corporates
- RAIZBZ: Sharp selloff ‑25pt/‑30pt w/w (27s ‑35pt) on Cosan/Shell headlines—redemptions of 30s/31s, no coverage for $4bn shortfall, and new legal advisor hire. Curve ‑7.125/‑5.875pts mid-week, short-end weakest.
- CSNABZ: Sympathy pressure ‑6.25/‑1.25pts w/w; Fitch BB‑/RWN. Plans $1.5bn secured loan for bond maturities.
- FECCN: +0.25pts on M&A/debt exchange.
- WOMCHI/WOMMOB: Unchanged on asset sale rumors.
Key Themes
Geopolitics drove Ukraine swings; SSA short-end rallied on bank trips and IMF updates; Latam was buoyed by improving US ties (Argentina/Colombia); corporates remained volatile on parent company risks.
www.gembridgecapital.com
DISCLAIMER
This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.
AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.
Executive Summary: EM ex-Asia credit saw a relatively quiet close despite mid-week volatility from Ukraine rally and SSA rebounds. Ukraine bonds gained +1.75pt to +2.25pt on the week after Trump’s call with Putin pausing energy strikes, while Gabon continued rallying +0.375pts on World Bank loan talks. In Asia, New World bonds surged 4-10pts on Blackstone investment rumors, offsetting softer sentiment from potential US-Iran tensions and Hutchison port issues. Overall, HY names showed dispersion with real money demand supporting select credits amid weekend risk reduction.
Market Visualizer
Regional Credit Developments
🌍 EM Ex-Asia Credit
- Ukraine: Started strong on Russia talks but retraced before rallying on Trump’s strike pause agreement. A-notes +1.75/+2.25pt, B-notes +1.5/+2.5pt, C-notes +2pt on the week.
- Gabon: SSA sovereigns continued rally with +0.375pts weekly gain on $500m World Bank loan negotiations.
- Zambia: Bonds flattened post-IMF $190m disbursement amid weaker reserve projections; SSA sovereigns rebounded +0.25/+0.625pts overall.
- Argentina: Bonds rose 0.325-1.9pts applying Ecuador’s issuance success template, plus FX accumulation gains.
- Ecuador: Ended flat/+0.25pts after profit-taking following successful primary issuance.
- Venezuela/Pdvsa: Firmed +0.10/+0.50pts on recovery potential expectations.
🇨🇳 Asia Credit: China Property & HY
- New World Development: Complex rallied sharply 4-10pts (especially perpetuals) on Blackstone shareholder investment talks, despite company denial. Strongest performer of the week.
- China Property Sector: Eased red lines boosted distressed bonds; Dalwan gained +1.5pts post-pricing on policy support.
- Indonesia HY: Dipped 25-50c on MSCI free-float adjustment concerns impacting equity sentiment.
- New PLN IJ Bonds: Mixed performance amid equity market rout but closed near reoffer levels showing resilient demand.
🌏 Asia Credit: Frontier & Sovereign
- Sri Lanka/Pakistan: Frontier sovereigns remained firm with steady real money demand.
- Vedanta: Gained on stake sale announcements improving liquidity profile.
- Biolin: Advanced on credit rating upgrade momentum.
- Bahrain: New 8Y issue actively traded, outperforming other tenors in debut.
- Romania: Dollar-denominated bonds lagged Euro equivalents in secondary trading.
Trading Flows & Technicals
Flows balanced with real money demand in Ukraine, SSA top picks, and Asia HY squeezes early week, turning selective late amid Iran strike fears and CK Hutchison weakness. Corporate standouts included LIQTEL (+2.5pts) and GeoPark (+1.25pts) gaining on strong results and M&A activity.
Week Ahead Outlook
Monitor Ukraine truce implementation following strike pause agreement, Ecuador secondary market reaction to new issuance, Argentina FX reserve accumulation momentum, and Asia equity market impacts from MSCI Indonesia constituent review. Potential US monetary policy shifts under Warsh nomination may weigh on broader EM risk appetite.
www.gembridgecapital.com
DISCLAIMER
This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.
AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.
Executive Summary: Geopolitical Whiplash & The “Greenland Relief” Rally — The trading week was defined by significant volatility stemming from transatlantic trade tensions, which eventually gave way to a powerful relief rally. Markets initially shuddered as the U.S. administration reignited tariff threats against the EU over the Greenland dispute. However, by week’s end, a relief rally sparked in global risk assets after a framework deal was secured, leading to a forceful squeeze in risk assets. While macro headlines dominated, idiosyncratic stories in Ukraine, Gabon, and India provided significant dispersion across credit stacks.
Market Visualizer
Regional Credit Developments
🌍 EM Ex-Asia Credit
- CEE & CIS – Ukraine (UKRAIN): The complex experienced a roller-coaster week, trading as high as +3pts mid-week on headlines regarding frozen assets. Gains were partially pared later in the week, with the curve finishing down -1.25/-0.25pts after the Kremlin noted the “territorial issue” remains unresolved.
- CEE Sovereigns – Romania: Euro-denominated bonds outperformed, tightening -5bp to -7bp.
- Hungary (REPHUN): Active in new issues with flows skewed toward hedge fund selling versus real money demand.
- SSA – Gabon (GABON): A star performer, rallying +4.25pt to +4.5pt and closing at highs on IMF headlines regarding an economic growth program.
- Benin (BENIN): Priced an inaugural 7Y sukuk at 6.2%. While the new issue initially failed to perform, it made outstanding Benin bonds look cheap, leading them to close +0.625/+1.0pts higher by week’s end.
- Senegal (SENEGL): Remained an outlier for much of the week, trading down early before rebounding +0.75/+1.0pts without new headlines.
- LatAm – Argentina (ARGENT): Continued its march higher, finishing +0.25/+1.0pts on the back of steady IMF growth projections and accelerated FX purchases.
- Ecuador (ECUA): Announced plans to issue a new 7Y and 12Y bond for $3-4b gross to finance a tender offer.
- Brazil – CSN/Braskem: CSN bonds dropped -1.0pt to -2.0pts following an S&P downgrade to B+. Braskem bonds saw volatility as investors monitored reports of an out-of-court restructuring plan.
- Middle East – Lebanon (LEBAN): Lebanon bonds rebounded +0.50pts to +0.625pts following news of an upcoming IMF mission in February.
🇨🇳 Asia Credit: China Property & HY
- Shuion: The new Shuion deal outperformed, trading up 1.5pts vs. reoffer.
- Vanke: Sentiment was supported by reports that SZ Metro will fund upfront payments for onshore bonds.
🌏 Asia Credit: Frontier & Sovereign
- India – Adani Complex: Diverged from the broader rally, trading 20bps wider for Investment Grade and -1pt to -1.5pts for High Yield. The move followed headlines that the SEC is asking a U.S. court for permission to serve summons directly to the Adanis to advance a fraud case.
- India NBFCs – Infoline: NBFC bonds were down 0.5pts after the income tax department ordered a special audit.
- Pakistan: A frontier outperformer, trading up 0.5-1pt on news of a projected $10bn investment from China.
Key Themes & Trading Flows
- The “Greenland Hedge”: Early week trading saw a risk-off tone as tariff concerns resurfaced amidst transatlantic tensions.
- Relief Squeeze: Trump’s Davos speech and subsequent restraint on tariffs sparked a relief rally, with High Yield cash moving +25ct to +1pt higher.
Week Ahead Watch Items
- Trump/Zelensky Meeting: Market watching for progress on the latest peace plan.
- Ecuador Issuance: Monitoring the market reception of the $3-4b gross new money deal.
- Adani Legal Filings: Monitoring U.S. court developments regarding SEC summons.
- Japan Politics: Assessing the impact of snap elections on global macro sentiment.
www.gembridgecapital.com
DISCLAIMER
This document is strictly confidential and is being provided to you for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities or financial instruments. The information contained herein has been obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice.
AI Generation Notice: Portions of this content may have been generated or assisted by Artificial Intelligence (AI) technologies. Users should independently verify critical data points. Past performance is not indicative of future results.