Emerging Markets Rally as Trade War Fears Subside.
Emerging-market stocks and currencies surged Tuesday as fears of a full-blown trade war eased. President Donald Trump agreed to postpone 25% trade levies on Canada and Mexico in exchange for tighter border security, while China delivered a measured response to newly imposed U.S. tariffs. The news fueled a strong rebound in riskier assets, with developing-world stocks posting their biggest gain since September.
The rally was most evident in emerging-market currencies, which climbed as the U.S. dollar weakened. However, the Mexican peso, despite an initial outsize rally following the tariff pause, lagged behind its peers, weakening as much as 0.8% during Asian trading.
Meanwhile, Mexico’s stock market surged 2% after reopening from a local holiday, benefiting from improved sentiment.
Egyptian debt posted some of the strongest gains among emerging markets after the country secured $1.5 billion in funding for oil and food security from the International Islamic Trade Finance Corp.
Similarly, Ukraine’s dollar bonds rallied after Trump signaled interest in striking a deal with Kyiv that would include access to rare-earth minerals, a critical resource for global technology and defense industries.
Source: GUARDIANGLOBE
