Emerging Markets Pulse — 2026-07-16
Emerging-market assets rallied sharply on July 14 after cooler-than-expected US inflation data (3.5% year-over-year, matching 2020 lows) prompted traders to pare bets on imminent Federal Reserve rate hikes, lifting both equities and local-currency bonds. The dollar weakened significantly, providing relief for EM currencies and high-yield assets like Brazil's real. Geopolitical tensions persist, however: oil prices remain elevated following Iranian attacks on UAE tankers and Trump's threat of levies on ships transiting the Strait of Hormuz, creating cross-currents for emerging markets sensitive to energy shocks and growth headwinds.
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