Latest EM Sentiment Drivers
Below are the key countries and themes driving the MacroMonitor’s signals this week.
Reaction to US action on Venezuela
EMAlpha’s AI analyzed local country media reactions to the US-Venezuela intervention, revealing deeply divided international sentiment. On a scale of -1.0 (extreme negative) to 1.0 (extreme positive), China (-1.0) and Brazil (-0.8) led the condemnation—China rejecting US “world police” actions while Brazil’s Lula warned of an “extremely dangerous precedent” for sovereignty. Mexico (-0.7) showed acute anxiety through peso depreciation and market volatility, fearing escalation spillover. Argentina (-0.4) split sharply, with Milei celebrating the operation while opposition condemned it as “state terrorism.” Colombia (-0.2) showed reactions split across the political spectrum, Venezuelan refugees rejoiced. Taiwan (0.0) remained neutral, balancing competing concerns and staying in weight-and-watch mode.
Below are the key countries and themes driving the MacroMonitor’s signals this week.
Week’s Most Positive EM Sentiment
Vietnam Economy: Vietnam has emerged as a significant destination for Foreign Direct Investment (FDI), with total FDI reaching an estimated 185 billion USD in 2025, marking an increase of nearly 9% from the previous period. This positions Vietnam among the top 15 developing countries globally for FDI attraction. The country’s economic landscape is characterized by: a) Strong Growth in Key Sectors: The manufacturing and processing sectors continue to lead FDI inflows, accounting for approximately 83% of total FDI; b) Shift Towards High-Quality Investments: There is a noticeable trend of FDI moving towards high-tech and green industries, driven by Vietnam’s strategic location, improved industrial infrastructure, and favorable trade agreements; c) Positive Export Performance: The FDI sector significantly contributes to Vietnam’s exports, which have seen a steady increase, with FDI enterprises accounting for over 76% of the total export turnover.
Fig. 2: Vietnam Economy: Vietnamese local language media based sentiment. -1.0 represents extreme pessimism, 1.0 represents extreme optimism.
Egypt Exports: The high domestic sentiment towards Egypt’s exports can be attributed to several key factors: a) Sustained Growth in Export Performance: Egyptian exports have shown a remarkable increase, surpassing $3 billion for the first time in history, indicating a strong and sustainable growth trajectory in the manufacturing sector; b) Government Support: The Egyptian government has implemented various initiatives to support and enhance export capabilities, which has significantly contributed to achieving record export figures; c) Increased International Demand: There has been a notable rise in demand for Egyptian products in international markets, particularly in the Arab region and Europe, which has positively impacted export figures. These factors combined have created a favorable environment for Egyptian exports, leading to a positive sentiment score in the market.
Fig. 3: Egypt Exports: Egyptian local language media based sentiment. -1.0 represents extreme pessimism, 1.0 represents extreme optimism.
China Currency: The Chinese yuan has strengthened on the back of dollar weakness in 2025 as the USDCNY has dropped below 7.00. As the year-end approached, there was the usual seasonal increase in corporate demand for foreign exchange settlement, which contributed to the yuan’s strength. The appeal of yuan-denominated assets has also risen, driven by expectations of continued appreciation of the currency. This has led to increased foreign capital inflows into China’s financial markets. The People’s Bank of China has emphasized maintaining the yuan’s stability at a reasonable level, which has helped to manage market expectations and prevent excessive fluctuations in the exchange rate.
Fig. 4: China Currency: Chinese local language media based sentiment. -1.0 represents extreme pessimism, 1.0 represents extreme optimism.
Week’s Most Negative Sentiment
Brazil Exports: The recent imposition of a 55% tariff by China on Brazilian beef imports exceeding a specified quota is expected to have significant repercussions for Brazil’s beef export sector. This tariff went effective from January 1, 2026. The tariff is likely to diminish the competitiveness of Brazilian beef in the Chinese market, which is Brazil’s largest export destination for beef. As a result, Brazilian exporters may struggle to maintain their market share against competitors who are not subject to such high tariffs. Estimates suggest that Brazil could face losses of up to US$3 billion in export revenue due to the tariff. This is particularly concerning given that approximately 48.3% of Brazil’s beef exports are directed to China.
Fig. 5: Brazil Exports: Brazil local language media based sentiment. -1.0 represents extreme pessimism, 1.0 represents extreme optimism.
Colombia Debt: Colombia’s government executed a direct sale of 23 trillion pesos (approximately $6 billion) in public debt bonds (TES) to a foreign investor, which has been described as unprecedented in its scale and method. This operation was intended to pre-finance the country’s financial needs for 2026 and was conducted under conditions that deviated from prevailing market rates, leading to apprehensions about the transparency and integrity of the bond market. Colombia is facing a significant debt crisis characterized by a net debt level of 57.8% of its GDP, which has increased compared to previous years. The country has been criticized for its high and persistent fiscal deficits, which are projected to reach 8.1% of GDP in 2026, with a primary deficit of 3.5% of GDP. The government has been accused of excessive spending, which has outpaced revenue growth significantly, leading to a deficit that could reach 7% in 2025. This situation has raised concerns about the sustainability of public finances and the ability to respond to future economic crises.
Fig. 6: Colombia Debt: Colombian local language media based sentiment. -1.0 represents extreme pessimism, 1.0 represents extreme optimism.
Colombia Inflation: Inflation in Colombia is projected to remain above the target set by the Banco de la República, with estimates suggesting it could close at around 4.91% in 2026, which is outside the acceptable range for economic stability. The recent increase in the minimum wage by 23.7% has raised concerns among economists and business leaders about its inflationary effects. Higher labor costs are often passed on to consumers in the form of increased prices for goods and services, further exacerbating inflationary pressures. The current economic growth is largely driven by consumption rather than investment, leading to a fragile economic environment. There is a growing skepticism among international investors regarding Colombia’s fiscal sustainability, which could lead to a downgrade in the country’s credit rating. This uncertainty contributes to a negative sentiment regarding inflation and economic stability
Fig. 7: Colombia Inflation: Colombian local language media based sentiment. -1.0 represents extreme pessimism, 1.0 represents extreme optimism.
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