Frontier & EM Daily, 24/08: Buyback rally reverses but EM FX hits a record high

• Buyback rally fully reverses, UST 10y +3bps to 4.73%, but a weaker dollar lifts EM FX to a record high

• Bolivia -1.3% (spreads +31bps), the largest decline, after President Paz dismisses Finance Minister Espinoza

• Argentina +1.3% (spreads -27bps) tops the sample on stronger June activity; 60 of 67 spreads tighter

  
  

EM eurobond cash prices were mixed on Friday (42 of 71 bonds in our sample fell, median -0.0%) though spreads tightened broadly, with 60 of 67 in and the median 3bps tighter, as the initial rally in US Treasuries sparked by Treasury Secretary Bessent’s announcement of doubled long-end buybacks fully reversed by the New York session, but the dollar held on to its losses and gains in precious metals deepened. The US 10-year yield rose a further 3bps on Friday to 4.73% (the highest since late July). The weaker dollar provided a supportive backdrop for frontier and HY EM credits, partially offsetting the rates headwind. The MSCI EM equity index was broadly flat, though EM currencies hit a fresh record high. Brent crude inched higher to US$94.4/bbl, settling around US$93.0/bbl this morning. Looking ahead, US Treasury Secretary Bessent holds a press conference this afternoon at which he is expected to unveil the toughest sanctions yet against Iran. Furthermore, Fed Chair Warsh speaks at the Jackson Hole Symposium on Friday. 

Europe, Middle East

• Lebanon’s 2035 eurobonds outperformed on Friday, up 0.5%, the second-largest advance in the sample, despite a World Bank report projecting Lebanon’s real GDP to contract 6.4% in 2026 and inflation to rise to 17.5%, reflecting the collapse in tourism, weaker consumption, disrupted supply chains and prolonged displacement from renewed conflict earlier this year. July CPI eased to 15.7% yoy from 17.3% in June.