Emerging Markets Wobble Amid Trade Tensions and Middle East Hopes
Developing markets faced a challenging start to the week due to trade tensions between the U.S. and China and ongoing Middle East conflicts. U.S. tariffs and Middle East ceasefire developments weighed on stocks and currencies, such as South Africa's rand and Ghana's cedi, while MSCI's emerging market index fell 1.1%.
Developing markets encountered a tumultuous start to the week, beset by mounting trade tensions between China and the U.S., alongside uncertainties in the Middle East. The dueling superpowers' strained relations carried familiar anxieties as President Donald Trump introduced sweeping tariffs on Chinese goods, though he later softened his stance via social media.
The resulting disarray reverberated across global financial indices. MSCI's emerging market tracker dropped to a two-week low, slipping 1.1%, as Asian and European markets mirrored the decline. Meanwhile, safe-haven currencies such as the South African rand saw gains against the U.S. dollar, highlighting investor caution amid policy unpredictability.
Meanwhile, the Middle East region saw hope for stability, with a Trump-mediated ceasefire involving Hamas. This progress fostered a 1% appreciation of the shekel, while major global leaders rallied in Egypt to discuss ongoing tensions. Across Africa, differing economic fortunes arose as Senegal suffered a credit downgrade and Ghana received an upgrade.
(With inputs from agencies.)
Google News