Despite a turbulent start to 2026 marked by geopolitical headlines, markets have shown limited and localized reactions, says Tim Littrell of Agile Investment Management. Speaking to Trader TV, Littrell, the senior investment analyst and trader, says liquidity, not headlines, remains the key driver for traders.
He shares his views on selective opportunities in liquid emerging markets such as Brazil and Mexico; he unpacks his buy-side’s 4-pillar approach to liquidity in stressed and calm markets, and discusses how markets are digesting the January new issuance cycle. Looking ahead this Q1, Littrell urges desks to focus on global liquidity, potential US policy impacts, and attractive risk-adjusted opportunities outside the US, especially in Australia and Canada.
Interview
Jo Gallagher – We’ve already had a very busy start to 2026 with multiple geopolitical events unfolding, such as those in Venezuela, as well as President Trump’s claims to the oil reserves there and his potential ambitions to take over Greenland. How have markets been reacting to the recent news cycle?
Tim Littrell – So we really haven’t seen too much of a reaction. Any reaction that we’ve seen has been knee-jerk, initial, and very localized, with it still being too early to comment on any kind of long-term fallout. With no real liquidity in local markets like Venezuela, it’s one of the EM (emerging market) countries in which we never directly invest. However, elsewhere in emerging markets, we’re seeing ample liquidity. For example, look at Brazil and Mexico, both present attractive carry plays, and the markets are deep enough here for us to express views in a couple of different products without any significant headline risk.
Jo Gallagher – And what have been the ripple effects across emerging markets, whether it comes to sentiment, capital flows, and performance?
Tim Littrell – Headlines like these present super niche trading opportunities, but nothing’s really changed over the last couple of weeks, from a long-term investment perspective. To that from a trading standpoint, we tend to like markets that allow us to express certain views in multiple products, whether it’s through emerging market local rates, larger credit deals, or supranationals denominated in those local currencies.
Jo Gallagher – And January is often a very busy month for primary markets. What have you seen in terms of EM issuance, and how do you approach this cycle as a trader?
Tim Littrell – So we haven’t seen anything record-breaking so far, but you can definitely tell that issuance is picking up after the start of the new year. In EM specifically, we’ve seen a healthy mix of new issuance and reopenings of existing SSAs, debt issued by supranationals like the World Bank and the International and European banks for reconstruction and development. We’ve also been watching how the markets are managing close to 65 billion in new issuance in the US alone this month. So far, for both emerging and developed market new deals, the markets digested the new issuance effortlessly, with little to no observable impact in the secondary. As a trader working for a global multi-sector bond fund, liquidity is paramount. It’s not just about being able to find a place to invest capital, but being able to source the most efficient products when expressing the team’s views to ensure we don’t have any heartburn in periods of stress. One of the ways that we like to prepare for this is we like to screen risk through our four pillars of risk as we call it. It’s FX, credit, interest rates, and most importantly, to me as a trader, liquidity. If we go back to investing in Brazil as an example, we like to consider a couple different investment opportunities. Just for this conversation, let’s talk about local government debt versus supranational debt. So the very first thing we would screen, we’d consider is, if we want to invest in some place like Brazil, do we want the currency risk or as a Canadian dollar-based fund, would we want to hedge that risk back to the Canadian dollar. For credit and interest rates, there are a couple of different distinctions in these two types of debt. First, the local government in Brazil typically issues zero-coupon bonds. The supranational issues by the World Bank are typically coupon-paying bonds. The credit ratings of these two types of debt, because of who they’re backed by, are typically a little bit different as well. The World Bank being rated a little bit higher than Brazil would be. And lastly, which one of these debt markets is going to give us the most liquidity in times of stress? Are we going to be able to express the views that we want to express in the local debt or in the supranational?
Jo Gallagher – Now, to wrap things up, Tim, tell us what else is on your radar for the rest of Q1 and what should trading desks be thinking about?
Tim Littrell – For the rest of Q1, we’ve got to look past headlines. We’ve got to look past all the noise, and what we’re going to look forward to is if the US Supreme Court rulings on tariffs are going to impact liquidity and global bonds. Preparing for more potential debt ceiling discussions here in the US, and we’re going to look forward to investable opportunities outside of the US that screen well in terms of risk versus return. In 2025, we saw a lot of investors broaden their horizons into smaller global markets outside of the US. We saw material inflows into APAC X, Japan, LATAM and Europe. While it didn’t really surprise us, one of the biggest flow stories we witnessed in 2025 was the relentless demand in Australian debt markets, especially from foreign investors. In smaller markets like Australia and Canada, not only have we seen significant increases in demand by foreign investors, but we’ve also seen a huge pickup in initial issuances by local corporations. Ultimately, for any global trading desks, similar to us, it’s got to be a 24/6 role. It’s not nine to five. It’s not just about implementing investment ideas at a given time, but monitoring global liquidity week over week, and ensuring we’re as efficient during heightened volatility as we are during call markets.
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