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Articles by Natalia Gurushina
One Takeaway, Four Implications, and Seven Denials at 2026 IMF Annual Meetings
The Emerging Markets Debt team just returned from 2026 Annual IMF Meetings in Bangkok, where we discussed all key topics with key global policymakers, investors, and analysts. The team just returned from 2026 Annual IMF Meetings in Bangkok, where we discussed all key topics with key global policymakers, investors, and analysts. We’ve been attending these meetings for over three decades, so our attitude will be meta.
If the Dollar Loses Reserve Status, Could Gold Surpass $39k?
What if gold replaced the US dollar as the reserve standard? In this paper, our Emerging Markets Bonds team values gold by matching central bank money liabilities to gold reserves, implying $39k–$184k per ounce. How the EM Bond Team “Values” Gold What if Gold Replaces US Treasuries?
IMF 2024 Spring Meetings Takeaways: Emerging Market Stars Shine Bright
The EM debt team recently attended the 2024 IMF Spring Meetings in DC and met with a broad range of official sector policy makers, government officials and market participants. EM investors and policy makers are enjoying their moment At the 2024 IMF Spring meeting, most of the concerns over emerging markets (EM) from the Fall 2023 meeting – from global rates to specific problematic EMs – had been addressed.
Fiscal Dominance: The Clarifying Lens for EM (and DM) Bonds
“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so” — Mark Twain The absence of “fiscal dominance” in emerging markets (EM) helps explain why EM hard-currency bonds outperformed their developed markets (DM) counterparts for the past 20 years. In this white paper we will look at emerging markets’ superior fiscal and monetary policy stance and why it is also beginning to generate better risk/return statistics in EM local-currency bonds.
IMF 2023 Fall Meetings: The World Begins to Worry about the US Fiscal Deficit
Deputy Portfolio Manager David Austerweil and Chief Economist Natalia Gurushina spent a week in Marrakech, Morocco attending the International Monetary Funds (IMF) Fall meetings where they met with official sector creditors, policy makers, and other investors. The local authorities did an amazing job hosting the meetings without any issues, especially in light of Morocco’s recent earthquake. Global growth outlook is mediocre, with only the US and China characterized by exceptionalism.
Webinar Registration | VanEck
Disclosures Please note that VanEck may offer investments products that invest in the asset class(es) or industries included in this commentary. This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities, financial instruments or digital assets mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, tax advice, or any call to action.
Webinar Registration | VanEck
Insights Emerging Markets Bonds A hawkish Federal Reserve and subsequent rising U.S. recession risk are clearly bullish for risk-free markets like U.S. Treasuries. But what about “risk” assets? We discuss why emerging markets (EM) U.S. dollar-denominated bonds are favorable in the current environment and address the below questions: How are we adjusting exposures amid China weakness? Why does the EM over DM bond thesis remain intact?
Will U.S. Growth Shocks Batter EM?
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income U.S. growth headwinds might be strong, but EMs’ trade exposure to the U.S. varies a lot, and many EMs can benefit from China’s stronger rebound. U.S. Slowdown The flash estimate for the U.S. Q1 GDP growth was much weaker than expected, slowing to 1.1% quarter-on-quarter annualized vs. 1.9% expected.
Even More Reasons to Allocate to EM Debt
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income Majority of investment Grade EMs and several High Yield EMs have a lower perceived risk of default in 1 year than the U.S. U.S. Debt Ceiling There are many good reasons to allocate to EM debt, and now you can find another one right on your Bloomberg screens.
EM Rates – Choose Wisely | VanEck
Insights Economic Trends Most EM central banks are happily on hold. Can policy tails (both cuts and hikes) become “fatter”? Exiting EM Tightening Cycles The market is gearing for another rate hike by the U.S. Federal Reserve (Fed) next week and more policy tightening in Europe. In the meantime, emerging markets (EM) central banks are moving in different directions.
Low Rates - The Natural Order of Things?
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income The IMF thinks that the spike in real rates is temporary, while some EMs are testing the policy easing waters – but the market is not sure this is a good idea. Natural Rates The markets are getting increasingly accustomed to the prospect of a 25bps U.S. rate hike in May (90% implied probability as of this morning).
EM Bonds - Place Your Bets
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income EM debt is not a monolith, which creates challenges but also opportunities during volatile times, like the most consequential elections in a generation. EM Bonds Performance The latest IMF projections show that the growth differential between emerging and developed economies should improve noticeably in favor of EMs in 2023 - an additional factor supporting the outlook for the asset class this year.
EM Rate Hikes - Success?
By Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income EM rate hikes paved the way for disinflation and provided fundamental support for EM bonds. But how bad is collateral damage in the form of weaker growth?
IMF Meetings - Searching for Answers
By Natalia Gurushina, Chief Economist, Emerging Markets Fixed Income Disconnect between the market expectations and central banks' messaging is not unique to DMs. Can EMFX strength save the day and open room for more easing? Top Global Stories The International Monetary Fund (IMF) Spring Meetings are upon us again. We'll be on the ground next week - as usual - hoping to gain more insight into key global issues and country-specific developments.
EM - A Stagflation Curveball
Insights Economic Trends OPEC+ production cut decision should keep various EM central banks on the cautious side, despite peaking inflation and growth headwinds. Oil Production Cuts The second quarter began with a curveball – a surprising announcement by OPEC+ (Organization of the Petroleum Exporting Countries) about production output cuts starting in May.
Political Games vs. Macro
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income China Geopolitical Goals Headlines about the rising tensions between the U.S. and China continue to flood our Bloomberg screens - fanning debates about China's long-term geopolitical aspirations and the renminbi's possible (or is it likely?) ascendance as one of the world's reserve currencies at the expense of the good old greenback.
Major Narratives Still Intact
by Natalia Gurushina Chief Economist, Emerging Markets Fixed Income Global Drivers for EM Assets The last day of March brought more signs that two major market narratives are still in play. The global inflation momentum continues to moderate (albeit with some nuances - like stickier than expected core inflation in Europe and some emerging markets (EM)), while China's recovery keeps gaining traction.
"Too High For Too Long"
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income The ECB's 50bps rate hike brought inflation back into focus. So, how high is the bar for rate cuts in EM, where disinflation is well underway? DM Rate Hikes The market tried to bounce on the news that Credit Suisse was allowed to borrow from the Swiss National Bank, but concerns about the debacle's impact on bank lending standards - and, hence, the growth outlook both in Europe and the U.S. - led to some back and forth.
U.S. Fed Boxed In… EMs Finally Free?
Insights Economic Trends EMs’ resilience over the past few days might have looked surprising, but there are fundamental and structural reasons for that. Fed Policy Rate Outlook Bold moves from regulators might have saved the Silicon Valley Bank depositors, but the debacle caused some wild market moves, including expectations for the U.S. Federal Reserve’s (Fed’s) policy rate. Rate hikes have been almost completely priced out this morning, and the implied peak rate dropped well below 5%.
When Big Stories Collide
Insights Economic Trends Geopolitical twists add to the complicated global economic backdrop, but some EMs look less affected by the latest risk-off episode. Fed Policy Response Geopolitics is moving to the forefront again, “colliding” with concerns about a mini bank crisis/moral hazard in the U.S. – but against the backdrop of a strong payrolls number.
Inflation Concerns – A Recurring Nightmare? | VanEck
Insights Economic Trends Upside inflation surprises in DM push bond yields and expectations for peak rates higher. Can EMs escape the inflation “curse”? DM Peak Rate Expectations Developed markets (DM) inflation worries are back, and this means that global rates are under pressure yet again, while the market expectations for DM peak rates are re-testing the past highs (see chart below).
China Recovery – Seeing Is Believing | VanEck
Insights Economic Trends China’s activity gauges point to a faster pace of recovery, but the global growth backdrop remains more mixed. China Reopening China’s faster recovery thesis got some major support from February’s activity gauges. All PMIs (Purchasing Managers Indices) improved significantly last month, with the vast majority in the expansion zone now – not only services and manufacturing, but also the new export orders and small companies PMIs (see chart below).
Hawks Standing Their Ground
2023-02-25 15:00:37 By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income EMs cautious policy stance is very encouraging against the backdrop of the unapologetically hawkish U.S. Fed. Fed Rate HikeExpectations The market raised its peak rate expectations for the U.S. a little bit more, as theU.S. Federal Reserves (Feds) minutes signaled more rate hikesin order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.
Is “Everything Rally” In Trouble?
Insights Economic Trends U.S. rates’ January rally is undone and EM returns are feeling the heat. Can rates start decompressing again soon? Fed Message and the Market January’s rally in the 10-year U.S. Treasury yield is now completely undone, causing collateral damage in emerging markets (EM) debt. As you can see on the chart below, EM debt’s losses in February are largely the result of higher “risk-free” rates – this applies both to sovereign and corporate bonds.
FT, EM FX, and A Pinch of Salt
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income EMFX devaluations can be traumatic, but they can also pave the way - in conjunction with reforms - to stronger economic backdrop and tighter sovereign spreads.
Market vs. Macro - Misalignment?
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income The market expectations for EM rate cuts do not look overly aggressive. Is it because the post-pandemic policy response in EM was - by and large - timely and credible? 2023 Rally The drumbeat about disconnect between fundamentals and year-to-date asset price moves is getting a bit louder.
Market vs. Macro Misalignment?
2023-02-19 12:30:09 By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income The market expectations for EM rate cuts do not look overly aggressive. Is it because the post-pandemic policy response in EM was by and large timely and credible? 2023Rally Thedrumbeat about disconnect between fundamentals and year-to-date asset price moves is getting a bit louder.
Sentiment Swings and Fundamentals
Insights Economic Trends EM selectivity remains key as the market is trying to find a new “equilibrium” scenario for the Fed. Fed Rate Expectations The market expectations for the U.S. Federal Reserve policy trajectory continue to adjust higher, reflecting better than expected domestic activity and slower than expected disinflation.
Market vs. Macro – Misalignment? | VanEck
Insights Economic Trends The market expectations for EM rate cuts do not look overly aggressive. Is it because the post-pandemic policy response in EM was – by and large – timely and credible? 2023 Rally The drumbeat about disconnect between fundamentals and year-to-date asset price moves is getting a bit louder.
FT, EM FX, and A Pinch of Salt
Insights Economic Trends EMFX devaluations can be traumatic, but they can also pave the way – in conjunction with reforms – to stronger economic backdrop and tighter sovereign spreads.
Policy Tightening - Topping Up
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income Disinflation creates a lot of room for rate cuts, but potentially from higher peak rates and at a later date.
The End Is Nigh?
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income EMs keep an eye on changes in the U.S. Federal Reserve's guidance, but domestic fundamentals - including the pace of disinflation and growth outlook - are just as important. Fed Rate Cuts The focus of the day is the U.S. Federal Reserve's (Fed's) rate-setting meeting.
Rate Hikes The End Is Nigh?
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income EMs keep an eye on changes in the U.S. Federal Reserves guidance, but domestic fundamentals including the pace of disinflation and growth outlook are just as important. Fed RateCuts The focus of the day is the U.S. Federal Reserves (Feds) rate-setting meeting.
Rate Hikes - The End Is Nigh?
; GBI-EM – JP Morgan’s Government Bond Index – Emerging Markets: comprehensive emerging market debt benchmarks that track local currency bonds issued by Emerging market governments; EMBI – JP Morgan’s Emerging Market Bond Index: JP Morgan’s index of dollar-denominated sovereign bonds issued by a selection of emerging market countries; EMBIG – JP Morgan’s Emerging Market Bond Index Global: tracks total returns for traded external debt instruments in emerging markets.By Natalia Gurushina Chief...
The Investment Case for Emerging Markets Debt
IMPORTANT DISCLOSURES 1 Source: VanEck Research, Bloomberg LP. Data as of 2022. This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities/financial instruments mentioned herein. The information herein represents the opinion of the author(s), but not necessarily those of VanEck, and these opinions may change at any time. Non-VanEck proprietary information contained herein has been obtained from sources believed to be reliable, but not guaranteed.
EM, Gold, Action!
EM and Gold Reserves We try not to bother our readers with IMF research papers – especially when the market is preoccupied with China’s rebound (and the next batch of activity gauges) and the U.S. Federal Reserve’s (Fed’s) rate-setting meeting (the market expects a slower pace of hikes) – but this one was too good to ignore. The paper is about monetary gold. The report’s title is rather dramatic – Gold as International Reserves: A Barbarous Relic No More?
China Rebound – “V-Shaped” or Simply “Not as Bad”? | VanEck
Insights Economic Trends China’s rebound is beating expectations right now. Can it be sustained and what are the implications? China Rebound The main takeaways from China’s latest activity indicators are: (1) the economy is rebounding faster than expected, and (2) the recovery is likely to be driven more by services/consumption from now on with manufacturing/net exports taking the backseat (for now).
EM Bonds - Policies Matter
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income A prospect of more policy support in China is overriding weaker-than-expected activity gauges, while Brazil's solid macro indicators are overlooked due to policy concerns. China Policy Support We had two strong contenders for today's daily chart - China and Brazil - as both countries demonstrate the impact of changing government policies on bond returns.
Softer Growth – Blessing in Disguise? | VanEck
Insights Economic Trends Slower growth can free room for EM rate cuts and potentially lead to better current account outcomes. Still, EM is not a monolith, and slower growth will pose policy challenges for many. Market Rates Expectations The market stepped up its expectations for the implied policy rate in Japan (to “mighty” 0.3% in one year or so), but the outlook for many emerging markets (EM) is decidedly less hawkish.
Markets and Mandates
Insights Economic Trends The latest developments in China, Brazil, Peru, and South Africa underscore the importance of policy mandates for EM asset prices. EM Local Debt and Politics Policy agendas can separate winners from losers in financial markets – and not just in emerging markets (EM) (August-September mini-crisis in the U.K. is a good example).
A Milder Growth Slowdown?
Insights Economic Trends DM activity gauges are still in the contraction zone, weighing on the policy rate expectations. Many EMs can slow tightening safely, but some growth/inflation tradeoffs look less certain. DM Rate Hikes The consensus global growth outlook is quite bleak – according to the Bloomberg pool of forecasters, about 1/3 of countries will grow by less than 1% next year (see chart below). This is a very big increase from only three countries back in June.
Higher for Longer - Market Not So Sure
Insights Economic Trends High recession risks explain why the market is skeptical about the hawkish policy message in DM. EMs, however, might be better placed to slow the pace of rate hikes. Slower Rate Hikes in DM The pace of tightening is slower (+50bps is the rate hike “du jour”), and the central banks’ message is hawkish, but the market does not seem to be fully convinced about the “higher for longer” narrative – at least in developed markets (DM).
Disinflation, Pivots – Easy Does It? | VanEck
Insights Economic Trends Global disinflation is here – but countries proceed at a different pace. China is among few economies where inflation is expected to accelerate in 2023, and today’s credit aggregates show why. FED Pivot Prospects This week, all eyes are on the U.S. inflation print and the Federal Reserve’s (Fed) rate-setting meeting. The consensus view is that further disinflation will allow the Fed to slow the pace of rate hikes to 50bps, with this cycle’s terminal rate peaking at 5%.
Disinflation Successes – What’s Next? | VanEck
Insights Economic Trends Brazil’s disinflation is a major success – so why the market thinks that room for rate near-term rate cuts is now more limited? LATAM Policy Brazil is the world’s #1 disinflation success story. Annual headline inflation dropped from 12.13% April peak to less than 6% in November, and the Bloomberg consensus expects Brazil to be the first major emerging market (EM) - other than China - to bring inflation back to the target range (in Q1-2023).
Policy Reaction to Mixed Data Signals
By Natalia Gurushina Chief Economist, Emerging Markets Fixed Income The global slowdown narrative remains intact. Can economic surprises affect policy responses? The Pace of Fed Hikes The global data flow does not challenge the slowdown narrative, but it also shows that the momentum is very uneven - today's strong labor market report in the U.S. could not have looked more different from this week's ISM survey, which sent a much weaker signal.
China – Growth Weakness vs. Market Optimism | VanEck
Insights Economic Trends China’s pre-emptive moves to ease some COVID restrictions and support real estate developers are the reasons why the market chose to look through surprisingly weak domestic activity gauges. China Slowdown China’s domestic activity gauges for November were bad, no question about it. Most indices were well in contraction zone and deteriorating (see chart below).
Global Slowdown – Uneven Pace | VanEck
Insights Economic Trends China's activity gauges might worsen in November, but authorities are now targeting the key factors that weigh on near-term growth. Other EMs might not be so fortunate with policy space. Global Growth Global slowdown is back in focus, as the market prepares for the release of domestic activity gauges in emerging markets (EM).
Global Rates – Disinflation and Beyond | VanEck
Insights Economic Trends The pace of disinflation is an important driver for peak rates, but fiscal slippages can easily limit the available policy space. EM Disinflation Signs The biggest shock of the day in emerging markets (EM) is Argentina’s soccer squad losing to Saudi Arabia in the World Cup – where’s the IMF when one needs it? And the rest of the week can bring more surprises – especially on the inflation front.
Economic Policies – Keep It Simple | VanEck
Insights Economic Trends The market remains nervous about Brazil’s fiscal debates – will the central bank respond with a hike? EM current account narrative is split between concerns and a comeback. Brazil Fiscal Debates I learned two new economic terms this week - “macrosynergy” and “quantamental”. They sound remarkably clever, but simple concepts/frameworks work just fine most of the time. For example, if you mess up with fiscal accounts – your bonds and the currency get hit.
EM Growth – Global Pressures – Pick a Direction | VanEck
Insights Economic Trends Global geopolitical risks are elevated, but China’s latest policy initiatives and the rapidly easing global supply chain restrictions can create welcome tailwinds on several fronts. EMEA Political and Policy Risks There was a global sigh of relief that yesterday’s missile incident in Poland did not result in the further escalation of the Russia/Ukraine war.
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