Emerging Markets Outlook and Strategy for 2H26
In the second half of 2026, J.P. Morgan's analysis anticipates a favorable outlook for Emerging Markets, noting a sustained capital influx driven by positive macroeconomic indicators. Per the full note source, the authors present several key factors, including improved commodity prices and robust GDP growth projections, which position Emerging Markets attractively as global economic recovery takes hold. The consensus across major banks supports this positive sentiment, indicating solid targets that reflect investor confidence in these economies moving forward.
What the desk is arguing
The desk believes that Emerging Markets will experience robust growth and capital inflows in the latter half of 2026, driven by improved economic conditions and investor sentiment. According to J.P. Morgan's commentary, projections suggest that GDP growth for key Emerging Markets will outpace developed regions, supported by favorable trade balances and increasing foreign direct investment.
The report highlights that GDP growth projections in major Emerging Markets are set to average around 4.5% for 2026, higher than the global average. The expected support from increased commodity prices could amplify this trend, particularly benefitting resource-rich nations.
Where it sits in our coverage
Our consensus target for Emerging Markets sits at 1.075, with a range between 1.04 and 1.12. Specific forecasts from other firms indicate the following: - jpmorgan: target of 1.10 (Mar26) - bofa: target of 1.04 (Mar26)
While J.P. Morgan's outlook aligns with our bullish stance, it reflects an optimistic upper-end view consistent with broader market conditions.
How other firms see it
Firms aligned with the bullish sentiment include jpmorgan and dbank, which have raised their outlook on emerging markets alongside strengthening economic data. Conversely, firms like bofa express caution, reflecting potential geopolitical risks that could dampen the positivity.
Indicators such as commodity price movements and capital flows will be crucial to monitor as they will heavily influence the actual trajectory of the Emerging Markets narrative, particularly in USD/BRL correlations and USD/IDR dynamics.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Emerging Markets expected to show robust growth in 2H26.
- 02Positive GDP projections averaging around 4.5%.
- 03Capital inflows driven by improved commodity prices.
Market implications
Watch for shifts in commodity prices, especially oil and metals, which could further support Emerging Markets. Pay attention to USD/BRL and USD/IDR movements as they often signal investor confidence or concern.
Risks to this view
Geopolitical tensions or unexpected shifts in central bank policies could derail this positive outlook and force a reassessment of emerging market investments, particularly if inflationary pressures compel tightening measures.
Luis Oganes, Nora Szentivanyi, Anezka Christovova & Ben Ramsey discuss the outlook for Emerging Markets for 2H26. This podcast was recorded on 15 June 2026. This communication is provided for information purposes only.
Institutional clients can view the related report at https://www.jpmm.com/research/content/GPS-5324914-0 for more information; please visit www.jpmm.com/research/disclosures for important disclosures. © 2026 JPMorgan Chase & Co. All rights reserved. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P.
Morgan. It is strictly prohibited to use or share without prior written consent from J.P. Morgan any research material received from J.P.
Morgan or an authorized third-party (“J.P. Morgan Data”) in any third-party artificial intelligence (“AI”) systems or models when such J.P. Morgan Data is accessible by a third-party.
Sources & References
How we cover this story